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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: MrGreenJeans who wrote (5085)	5/21/1998 6:42:00 PM
From: wooden ships	Read Replies (1) \| Respond to of 42834

Mr. GreenJeans: Thank you for that excellent citation. During a first reading, I was at once struck by how baffled these august economic authorities are in the consideration of a singularly powerful and robust American economy and nigh full employ- ment coincident with the absence of profound inflationary pres- sures (though some might argue that inflation rages through the equity markets). Swimming against the current, Mr. Jordan was the lone dissenter to an unchanged federal reserve interest rate policy. To wit, "Mr. Jordan dissented because growth rates of various measures of money and credit in the second half of 1997 and the first quarter of this year were not consistent in his view with continued progress in reducing inflation. Recent price statistics understated the trend rates of inflation. The one-time effects of falling oil prices, lower food prices, and recent appreciation of the dollar on foreign-exchange markets provided only a temporary reduction of inflation. While some re-acceleration of reported rates of inflation was probably unavoidable, sustained rapid money growth would risk even higher inflation in future years. The durability of the economic expansion would be jeopardized by price and wage decisions reflecting expectations that the purchasing power of the dollar would decline at faster rates in the future. Once such expectations became imbedded in the economy, even stronger policy actions would be required in order to re-establish a downward trend of inflation."