>Roach calling for an easing of U.S. monetary policy is just talking Morgan
>Stanley's book. Roach says to ease now would repeat what the Fed did in
>the wake of the 87 crash, but there is a big difference between what
>happened in 87 and what is happening now. In Oct. 87, the Fed was
>aggressively raising interest rates. In this case, the Fed hasn't raised
>rates in over a year. This suggests to me that the current situation is
>not a liquidity crisis.
And Mexico's crisis in 1994/5 also broke out after a doubling of the federal funds rate. Asia and Russia have broken with dollar interest rates steady and the U.S. money supply growing.
If it's not a liquidity crisis, does that make it a solvency crisis?
Doug