Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (3523)	2/18/1999 10:37:00 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 81972

Lucretius, Come on now. The reason the Fed has been printing money is for at least two reasons. The first is to inject liquidity into the economy so that money center banks retain the motivation to continue extending credit and to avoid a credit crunch. The second is that with such a strong dollar, the Fed must dilute its strength to avoid exacerbating the trade deficit issue even further (since our economic "partners" can't seem to manage to create growth in their own economy and try to continue overvaluing their own currencies relative to their economic strength). Should they fail on either account, the next step will be trade protectionism that will effectively destroy any oppotunity of salvaging the global economy and will lead to mass unemployment worldwide and accompanying debt default. Maybe it would be useful to remember that the US was the only major country left standing at the end of WWII. Through our willingness to accept imported goods from these devastated economies, we led the way to their reconstitution. I think we are still quite a ways from seeing major inflationary impacts on the US economy. We can grow money exactly because the dollar is so strong. And I think we all have a sneaking suspicion that any recovery in the Asian and Latin economies is not nearly as close as we would like. Inflation is too many dollars chasing too few goods. We certainly aren't seeing a shortage of goods being produced and commodity prices don't indicate a shortage of raw materials, but rather an overabundance. The dollar is fast becoming the global currency of choice because of the political, military, and economic will of its financial leaders. And finally, as most of us realize, the US is the country apparently best prepared for the advent of Y2K. Foreign money will continue to seek a safe haven here in the US until then, IMO. Regards, Ron