It doesnt take the economic smarts of Federal Reserve Board chairman Alan Greenspan to know that the Aug. 18 Open Market Committee decision to leave the influential federal funds rate unchanged is good news for U.S.-based businesses.
The Fed, at least, isnt driving up their borrowing costs. Meanwhile, a couple of things the Fed has been rapidly increasing -- namely, the U.S. money supply and monetary base -- has caught the approving eye of National Assn. of Manufacturers President Jerry Jasinowski.
He believes dollar liquidity flowing abroad, a result of Americas sizable trade deficit, will help boost Asias recovery prospects from its 13-month-old financial crisis and not hurt the U.S. in the process.
While some analysts have feared that the rising money supply will lead to higher [U.S.] inflation, domestic inflationary pressures are being held in check by higher productivity and lower import prices, judges Jasinowski.