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What is the Fed to do? Japan tried to 'slowly' burst their stock and real
estate bubble back in the early 1990's. As you know, you can't slowly burst a
bubble.
If the Fed raises rates too high and slows the money supply the market will
eventually fall. They have taken the chicken way out by raising interest
rates and increasing the money supply. The higher borrowing costs of
interest rate increases have been offset by easier money. I believe once Y2K
passes, assuming no major disruptions, the Fed will turn off the money spigot
and then the market is living on borrowed time. This may mean that Norman's
projected top of the end of February will work as the market pushes higher in
January and February for one last burst.
Fed Model now shows stocks 58% overvalued!!!!!!
Just one scenario,
Howard Bernstein
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