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Gold/Mining/Energy : At a bottom now for gold? -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (1286)	6/26/1998 12:24:00 AM
From: ahhaha	Read Replies (1) \| Respond to of 1911

ANALYSIS-BOJ seen sticking to policy ahead government steps By Risa Maeda REUTERS ... Some analysts have also said that a proposal to reduce banks' reserve requirements at the central bank in order to ease their fund-raising needs misses the mark. Sumitomo Capital's Sano said such a move would contradict the purpose of the reserve, which is to guard against a run on a bank or other financial troubles. Lowering short-term interest rates would cause a steepening in the yield curve, said ABN AMRO Bank's Nagai, noting that long-end bond yields were currently in an upward bias due to expectations of extra government bond issuance to finance the bridge bank. ''The only thing they can do to hold the rally (in the dollar) is for the U.S. to cut interest rates and the Japanese to raise interest rates,'' said Avinash Persaud, head of currency research at J.P. Morgan in London. Thursday June 25, 12:10 pm Eastern Time INTERVIEW--US stocks worry Fed--Nobelist Samuelson By Isabelle Clary Samuelson added he has advised the Fed to tighten credit since U.S. growth began accelerating in 1996. The Fed has raised the federal funds rate just once over the past 2-1/2 years, which have been marked by robust growth, low unemployment and surprisingly modest inflation. ''Part of keeping the quasi-bubble going is that people are now convinced bond prices will go up forever, that the 5.50- percent (30-year Treasury) bond yield will go. This is creating a sense of false confidence that needs a little bit of puncturing,'' said Samuelson. ''Most experts think that 2.50 to 2.75 percent is a more sustainable (GDP growth) level. But the Fed is thinking 'I don't have to act' because Asian markets will act for us, restricting the threat of accelerating inflation,'' said Samuelson who noted the U.S. economy already displayed signs of inflationary pressures ''on Wall Street and in rises in nominal and real wages.'' PREEMPTIVE FED POLICY The Nobelist criticized ''steady-as-you-go'' monetary policy, saying the Fed should fire ''a warning shot across the bow'' against inflation. It could always reverse course if the economy were to react too negatively to a tightening, he said. Samuelson attributed the current modest rate of inflation to a docile American workforce that has long settled for small wage increases. But he saw signs this may have run its course, citing the strike at General Motors. ''The good (U.S. economic) condition is fragile,'' Samuelson said. ''We should seek good employment opportunities for the American people, not over the next 18 months, but over the next 10 years. We are in danger of losing the valuable flexibility in the labor force.'' Samuelson said the Fed at times deliberately causes recessions, similar to the purposeful triggering of avalanches on snow-heavy mountains to avoid larger, more dangerous deluges. Thursday June 25, 8:27 pm Eastern Time Japan risks a "Great Depression" --MIT's Dornbusch Dornbusch told conference participants that, whenever financial crises arise, the cause is ''bad lending.'' The MIT professor identified ''mismatched maturities -- short-term borrowing to finance long-term investments,'' and ''mismatched denominations -- assuming that foreign exchange rates are fixed which is not a reasonable assumption,'' as the main reasons for the lending crisis in Asia. Dornbusch blamed global investors for poor ''value-at-risk'' analysis when they lent aggressively to emerging Asian economies with inadequate government regulations. He also cited untenable government guarantees of massive private-sector borrowing as a cause for the Asian crisis. Maurice Obstfeld, economics professor at University of California-Berkeley, commented that attempts to fix foreign exchange rates worsened the problem in an environment of fast-moving global capital flows. ''When market sentiment turns against the exchange rate peg, the government is effectively forced to assume the short foreign-currency positions in some way -- or to allow a cascade of domestic bankruptcies,'' Obstfeld said. ''Since the government has used its foreign exchange reserves and cannot borrow in world credit markets, the national default becomes imminent.'' NEW YORK, June 25 (Reuters) - The U.S. economy is in its best condition in decades, with solid growth, stable prices and few signs the good times will end any time soon, Federal Reserve Bank of New York President William McDonough said on Thursday. McDonough said the Fed has achieved its goal of price stability, which is a key element in promoting sustained economic growth -- the Fed's other legal mandate. Citing Fed Chairman Alan Greenspan's definition of price stability -- a condition in which businesses and households make economic decisions without concern about inflation -- I am presenting these items to those of you who can understand my intent. There are very few left in the world who have retained the lessons of the past. The Japanese are a collection of uninformed little kiddies. Sano ought to be shot. Nagai needs to go back to Finance I. Persaud should be deported. Samuelson has changed spots. Dornbush and McDonough are drunk or deluded. The world is going to make fools out of all these guys except Samuelson(I'll have to get off his case for the mixed up economy). While our troops may once have had some insight, they've gotten confused because they couldn't hold to principle. That's why I included Greenspan's definition of price stability. This is the most serious issue facing the US now and I assure you it is where the big trouble will come. There is nothing worse than making a concession to inflation and that is exactly what the disciplinarian Greenspan has done.