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FED PLANS RATE CUT
TO MINUS ONE PERCENT
GuluFuture.com
5th August 2002
 The
Federal Reserve is considering cutting the headline Federal Funds rate
to minus one percent, according to sources close to beleagured Fed Chairman
Alan Greenspan. A presidential task force is considering the bold option
to head off threats to the US economy.
The
move could see Americans lining up at local banks to collect what would,
in effect, be free money.
"It's not as crazy as it sounds," said Iva Narcobuck,
analyst with investment strategy group Kash DeLoot & Runne, in an
exclusive interview with GuluFuture.com.
"It could be the decisive move that changes investor perception at
this critical juncture."
The news comes hot on the heels of a more conservative Goldman Sachs analysis
that Fed officials would ease by 75 basis points to a target federal funds
rate of plus 1.0 percent by year-end.
Narcobuck, who is a key member of the secret strategy committee, denied
his comments were a ploy intended to talk the market up. "It's a
valid option at this point," he said.
MIXED REACTIONS
"This is just the kind of news we have all been waiting for,"
commented Mark Hypemann of online traders Wunborn Evrrie Minnit, who recently
laid off 3,400 of their 3402 employees. Investors fled
US equity mutual funds in July, according to Merill Lynch, with early
estimates forecasting a net outflow of $47bn from the funds - the largest
ever cash terms outflow in stock market history.
The presidential task force is also considering innovative ways of coping
with the expected huge demand for the free funds, including airdrops of
money over US cities to ease inevitable long lines at bank tellers.
But Pentagon planners are reluctant to back the airdrop plans.
"We are already heavily committed with aircraft resources in Operation
Enduring Slavery," Pentagon tactical expert, Major Slawter Hardon
confided to GuluFuture.com.
Both GreenPeace and Friends of the Earth also have condemmed the plan
as a potential environmental disaster. "Absolutely the last thing
we need is rainforests ravaged to print yet more worthless paper,"
said Greenpeace spokesperson Annie Ecskuse.
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