Thoughts from the Frontline

A Considerable Predicament

By John Mauldin

September 19, 2003

A Considerable Predicament
Where is that Crystal Ball When You Need It?
Is Greenspan Secretly Tightening?
My Personal Business Guru
New Orleans, Chicago, New York

This week we re-visit Federal Reserve policy, and how their current policy may be setting up a very real problem with interest rates. Is the dollar getting ready to make its next move down? We do live in interesting times.

Yesterday I had long telephone conversations with both Jim Bianco and Greg Weldon, talking about Federal Reserve policy, interest rates and the dollar. There was an apparent disagreement on some concepts between them. Last night I did some meditating on those discussions, and decided a summary of them would give us an excellent starting point for this week's letter. Because they may both be right, and that may not be a good thing

Jim Bianco is one of the smarter independent researchers in the business. I always enjoy readings his thoughts. He recently took me to task on my analysis of Greenspan's recent speech. I took the opportunity to call him and discuss that and a few other topics. He did make one point in the conversation, which I have missed, that I think is very important, and is one of the main points of today's letter.…

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