"Until market forces, assisted by a vigilant Federal Reserve, effect the necessary alignment of the growth of aggregate demand with the growth of potential aggregate supply, the full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability." Translation: We fu_ked up and created too much paper money and if we do not reduce demand, inflation will soon be out of control so therefore I must increase interest rates to prevent inflation.

"Implicit in the very forces of change that bring us a panoply of goods and services considered unimaginable only a generation ago are potential financial imbalances." Translation: The dollar is strong, we buy cheap imports overseas, borrow money overseas and allow citizens of other countries to finance our profligate lifestyle. Our balance of trade is out of control and if it is not reduced substantially, it will cause a disaster and a recession or depression in the United States when the overseas investors panic and realize that they can never get their money back.

"These safety valves that have been supplying goods and services to meet the recent increments to purchasing power largely generated by capital gains cannot be expected to absorb indefinitely an excess of demand over supply." Translation: Eventually the foreign investors that have been financing our economy will be scared of the huge deficits and start returning the money invested in the United States to their own countries. When that happens, the dollar will fall, foreign goods will be more expensive, interest rates will rise in the Unites States, inflation will become a big problem, profits will decline and the stock market will fall big time. Investors and financial entities have put so much money into the market that it has soared well beyond irrational exuberance to the biggest financial mania of all time. This will result in a crash that makes the 1929 crash look like a minor recession.

In retrospect, it was a major mistake to increase the money supply so dramatically during the last 12 months and as a result I feel that I am attempting to juggle 6 bowling balls in the air at a time fearing that if I drop one, the others will come crashing down around me. There is so much spin in the market by so many people, I do not know who to believe and I wonder which part of it was generated by people in my own organization who are attempting to ecourage various activities to further improve the economy. The market shares my confusion. This situation also forces me to make vague statements that even I do not understand so that investors can interpret these statements and take actions that will benefit the overall economy. This is getting to be a really tough job.

-- Moe (Moe@3stooges.gom), March 06, 2000

Answers

PermaCulTure]that-s my *commen"t on the _ecomon-y.

-- (Al@doggieszia.net), March 06, 2000.

Return of the AL-D imposters?

-- dinosaur (dinosaur@williams-net.com), March 06, 2000.

LOL! There is only one BIG AL, so this does seem like the appropriate thread for his comment on the economy...for old times sake.

Gawd! Al-d nostalgia...maybe I really am warped!

-- (Time Warp@2000.daze), March 06, 2000.

Moe,
Great analysis. The Bond yield curve is still inverted, nobody is even talking about the implications.(sigh)
Greenspan has about as good of a chance of success as a grandma thrown out of an airplane at 10,000 feet with a ball of yarn and knitting needles and told to "hurry and knit herself a parachute".

-- Possible Impact (posim@hotmail.com), March 06, 2000.