ent rate is graphically illustrated in appendix 7b. This economics student is not ready to say how long the economy can sustain these r.p.m.'s, but does know that eventually the engine must be cooled or the economic expansion and bull market may come to an abrupt end. At the time of the August 24 meeting the Federal Reserve Board and Dr. Greenspan did not anticipate the need for any further tightening of the reserve markets in the near future. Given the fact that the economy has continued to outperform economists expectations over the inter-meeting period, it will be interesting to see what courses of action and concerns the Fed discusses at the next meeting. (Scheduled sometime near the end of November) What do these rapid and consistent increases mean for the domestic economy. From my perspective, this economy is all I have known. Many of the problems that used to face Americans seem to have been deleted. Leaving us today with the new challenges and fronts to conquer. One of these challenges is keeping this economy heading in a positive and stable direction. A looming threat to the stock markets and domestic economy is inflation. While doing research for this paper I stumbled across the unofficial fan club for Alan Greenspan. I had never heard of a fan club for an economist, but after seeing how stable the growth rates of GDP and inflation have been, my interest and admiration are growing quickly. Earlier this year Fred Vogelstein wrote an article quoting Mr. Greenspan as saying, "Do worry. Be unhappy." This from an economist with his own fan club; sounds like trouble. The article summarized some of Greenspan's remarks in which he speculated about the increasing probability of an "inflation spike" and increased interest rates. He also pointed the possibility of a stock market correction, and the possible onset of a bear market. Given the above remarks from Mr. Vogelstein's article it seems likely that the inflation forecast previously...
