THANK YOU GOD - IMF to REBUKE Alan Greenscum...

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

LONDON (CNNfn) - The International Monetary Fund will launch a damning attack on the U.S. Federal Reserve chairman Alan Greenspan later this week for his slow response to the dangers of economic overheating, according to a newspaper report.

At the same time, the fund's economists will urge central banks to follow the British example of paying more attention to asset prices in reaching decisions on setting interest rates, according to the U.K. newspaper The Daily Telegraph.

The IMF will deliver its damning verdict on Greenspan's management of the U.S. economy in its biannual World Economic Outlook, due to be published Wednesday.

The fund's analysts are apparently frustrated at the Fed's failure to match Greenspan's words with action. Greenspan has cautioned against overvaluations of stocks on Wall Street but the Fed's Open Market Committee has only raised interest rates by half a percentage point in recent months.

The report will call for further, early U.S. rate rises to help cool the economy down and prevent a hard landing, according to The Telegraph.

In contrast, the IMF will strongly endorse the Bank of England's unexpected decision to raise rates earlier this month. The U.K.'s interest rate setting committee increased the key lending rate by a quarter of one percentage points to 5.25 percent, citing house price increases as one of the main drivers.

The IMF will hold up the basis of the British decision as a model for other central bankers to follow, the newspaper reported. The fund's economists will argue that it is no longer tenable to rely solely on consumer price indexes to measure inflationary pressures in an economy, and wider issues should be taken into account.

When contacted by CNNfn.com, IMF officials could not confirm the contents of the report.

link at:-

http://www.cnnfn.com/1999/09/20/worldbiz/imf_fed/

-- Andy (2000EOD@prodigy.net), September 20, 1999

Answers

IMF applauds Bank rate move

THE International Monetary Fund will give its enthusiastic backing later this week to the Bank of England's controversial decision to raise interest rates by 0.25 point to 5.25pc. The fund's biannual World Economic Outlook (WEO), due out on Wednesday, will also deliver a stinging rebuke to the US Federal Reserve Board for its slow response to the dangers of overheating.

The fund's economists are deeply frustrated at Fed chairman Alan Greenspan's failure to match words with deeds. Despite drawing attention to the "irrational exuberance" of the American stock market, the Fed has only raised interest rates by 0.5 point in recent months.

The WEO will argue for further, early rises in American rates to dampen down the economy and prevent a hard landing. It will also criticise the European Union for failing to make progress on structural issues.

The monetary policy committee of the Bank will receive high praise for taking house price developments into consideration in reaching its decision to raise interest rates and for its willingness to act "pre-emptively". In a statement accompanying the rate rise, the MPC said it believed that an early rate rise would prevent it having to raise rates more steeply later in the cycle.

The IMF will urge other central banks to follow the British example by paying more attention to asset prices in reaching decisions on interest rates. It believes central banks can no longer rely entirely on consumer price indices to measure inflationary pressure in their economies and need to look at wider issues.

Minutes of the meeting at which the monetary policy committee took the decision to raise interest rates will be published on Wednesday. They are expected to reveal that Bank deputy governor Mervyn King took the lead in arguing for a rate rise.

Chancellor Gordon Brown and Bank Governor Eddie George will be travelling to Washington at the end of the week for a series of meetings to discuss the world economy. Reform of the world financial system to avoid future crises and action to relieve the debt burden of the world's poorest countries will also be discussed.

-- Andy (2000EOD@prodigy.net), September 20, 1999.


Coincidentally this comes just before the UK bank of England Gold sell off...

-- Andy (2000EOD@prodigy.net), September 20, 1999.

Andy, But what is the relationship with the gold selloff and are they still moving toward the sale?

-- Mara Wayne (MaraWayne@aol.com), September 20, 1999.

Andy,

I really don't understand what the IMF is saying here. They applaud UK for raising rates up to 5.25% but condemn the FED for not raising rates enough when our prime is now 8.25%. If 5.25% is good enough for the UK, what does the IMF think our prime should be? If they do issue this report, I hope they or will explain their thinking.

Do you have any idea what could be on the mind of the IMF?

-- mike (maples@voy.net), September 20, 1999.


What's on the mind of the IMF? How to make the rich richer and the poor poorer. Hopefully, the IMF is not y2k compliant and will go down the tubes next year. the IMF helps banks to steal their interest payments from the rice bowls of the poorest of the poor worldwide. It is a friend to tyrants everywhere, and the blood of many (including most recently, the East Timorese) is on the hands of Michael Camdessus, its president.

-- robert waldrop (rmwj@soonernet.com), September 20, 1999.


I thought the UK already had their big gold sell-off. I'll look for a link...

-- semper paratus (always@ready.now), September 20, 1999.

Mike -- I think you may be confusing the discount rate (the overnight rate that banks charge each other) with the prime rate (the rate that banks charge their most credit worthy customers). Are you comparing the UK discount rate with US prime?

-- Dave (dwood@southwind.net), September 20, 1999.

Mara,

Sometimes I get the feeling that to Andy, everything is somehow related to gold trading. :-)

Semper,

The BOE gold sales are to occur in several batches, the first of which has already occurred, but the rest have not. I do not know if they have altered their plans since the first batch.

Jerry

-- Jerry B (skeptic76@erols.com), September 20, 1999.


Ya'll got me folks. The article mentions concern that the Fed has only raised rates by .5%. They have raised Fed funds by that but have raised the discount rate by only .25% (or, at least, that is my recollection). It is my understanding that hardly any US banks borrow from the Fed at the discount rate, so why would it be important to the IMF? I'm still confused. Help!

-- mike (maples@voy.net), September 20, 1999.

If the IMF are going to burn Greenspan he must be doing something right.

-- old world order believer (IMFmustdie@barterboys.com), September 20, 1999.


I suspect that none of this will matter much in a little over 100 days!

-- Mad Monk (madmonk@hawaiian.net), September 20, 1999.

Could this IMF condemnation be the trigger for the crash after Yom Kippur into the full moon ??

-- BJ Rose (cruzroze@together.net), September 20, 1999.

BJ Rose,

Could be- we'll have to see. There's an old adage on Wall Street: "Buy Rosh Hashana & sell Yom Kippur." Apparently lots of traders have been using this approach to scalp profits for years.

-- mike (maples@voy.net), September 20, 1999.


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