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To: Sam who wrote (1490)	9/12/1998 3:53:00 PM
From: Carl R.	Respond to of 3069

Greenspan didn't say he was going to lower rates in this last speech, either. People always "interpret" what he has to say. Whether they "hear" his actual message or not, we can only guess. As for deflation, I don't know. We have some very mixed things happening. Commodities are clearly deflating, which is why the farm economy is in bad shape. Semiconductors are also "deflating." On the other hands, wages are increasing rapidly, and the money supply has also grown rapidly for the last year, which usually leads to inflationary pressure with a delay time of a year or so. On the one hand, if we enter a recession then wages could fall which could kick us to deflation. Or conversely the rapid increases in the money supply over the last year could help us avoid this and actually push us into inflation. We will just have to wait and see. I will say that I am glad that the money supply has risen so fast over the last year as it will help to moderate any recession that we do have. Carl