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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (21651)	7/15/1998 2:23:00 PM
From: Mike M2	Respond to of 94695

Haim,here is what AG had to say about the Fed's role in the 1920's boom & bust fame.org . Paul Warburg who lobbied for several years on behalf of the bankers for the creation of the federal reserve said in March 1929 "...If orgies of unrestrained speculation are permitted to spread too far,however,the ultimate collapse is certain not only to affect the speculators themselves, but also to bring about a general depression involving the entire country....People who express the fear that increases in the federal Reserve's rediscount rate might hurt business overlook the far greater hurt the economy will have to suffer if their advice to permit the situation 'to work itself out' were followed...." quote comes from "The Commercial and Financial Chronicle" March 9,1929 p.1444 I found it in Robert Patterson's "The Great Boom and Panic" p.245 -an excellent book i might add. Since Paul warburg was perhaps one of the most influential men in the creation of the Fed and his warning was quite prescient I feel we consider his comments carefully in light of today's mania. With respect to inflation i agree with the Austrian economic view that inflation is an unwarranted increase in money and credit beyond the needs of economic activity and the supply of available savings. Price inflation perhaps the least harmful effect of money and credit inflation asset price inflation has more severe consequences as the U.S. mkt of the 20s ;Japan in the 80's and SEA recently. Mike