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If an Irrationally Exuberant Moment 
Turns into the Right Moment…


Ross M. Miller
Miller Risk Advisors
April 19, 2004

The following transcript is fictional. Any resemblance to Federal Reserve chairmen, NBC News on-air personalities, or Nickelodeon/Viacom characters, living or dead, is purely coincidental. The author bears no responsibility for losses, financial or physical, that may result from reading this. You have been warned.

[An older man surrounded by binders and reports in a rainbow of colors is sitting in bed next to a beautiful woman several years his junior who is using a laptop computer with a peacock decal on its lid. The man looks up from a report with a beige cover.]

Man: Did you know that 94.3% of the Swedish Fish imported into the United States really come from Canada? And guess how many Cuban cigars were confiscated by customs in Niagara Falls during the first quarter.

Woman: That reminds me. Have you taken your blue pill yet?

Man: Twenty minutes ago. Still, another can't hurt. [He reaches for the nightstand, picks up an oblong blue pill and a glass of water, and swallows the pill.]

Woman: Do you really have to testify before Congress this week? I'm flying out to LA to give a keynote address at the Infotainment Expo. You're the most powerful man in the world, aren't you? Why don't you play hooky and tag along?

Man: Power comes with responsibilities. You know that. Did you also know domestic production of self-propelled lawnmowers increased 5.6% on a year-over-year basis?

Woman: Oh, Greenie, I love it when you talk stats to me. But aren't you worried about inflation? What are you going to say when they ask you about it? Last week's increase in CPI was uncomfortably large, wasn't it?

Man: Andrea dear, you should know better than to let a single month's number concern you. It was all a statistical anomaly related to clothing sales. There's still plenty of slack in the economy. Capacity utilization is well below its historical mean and there's sufficient unemployment to keep wages in check.

Woman: Speaking of wages, you may not think that inflation is a problem yet, but you don't pay the bills. When I Google you, I get all this important-sounding stuff—except for the crackpots who think you're a space alien—but when I Google myself, I get all those tacky speakers bureaus that I signed on with. Let's face it; the plumber makes more money than you do. Those nice men from the drug company that just dumped Mike Ditka called. They wanted to know if you were interested in replacing him. We could use the cash and then I wouldn't have to fly around and give so many speeches.

Man: Forget it. I don't plan to retire and it will take more than a rumor to get rid of me.

Woman: The drug company sent over some free samples in case you change your mind. [She hands the samples to him. He opens them all, stuffs several pills in his mouth, and chases them with another swig of water.] Isn't it about time for you to raise the fed funds rate? With Dubya spending up a storm and rates pegged lower than they've ever been in my lifetime, I would think that that economy is already overheating.

Man: Even if it were, now isn't the time to cause problems. Kerry hasn't been calling and offering you the VP slot again, has he?

Woman: Has he ever. It got so bad that Brian and I swapped cell phones. John figures that because you stalled the recovery to get Clinton into office back in '92, you might do the same for him.

Man: No one's proved that and you know that I only do what's best for the economy. If I hike rates now, what with all the hedge funds and their carry trades, I would probably drain so much liquidity from the system that it would do a lot more than stall the recovery. Things must be done gradually, especially with my chairmanship coming up for renewal in June. Speaking of gradual, where are those pills that are supposed to last for 36 hours? [He rummages through the nightstand drawer, pours several pills from a bottle into his mouth, and gulps them down with the last of the water.]

Woman: But if you don't act now, won't you risk the chance that inflation will get out of hand like it did after Vietnam?

Man: Don't worry. I know what I'm doing. I'll give Congress the usual song and dance without painting myself into a corner, throw the usual bones to the financial markets to keep them from panicking, and then raise rates when the time is ripe. You know how I feel about inflation—I hate it more than anyone on this planet.

Woman: But inflation isn't all that bad, is it? Much of the technology that goes into this little computer is based on scientific discoveries that were made during the last inflationary boom. And don't forget the Internet and disco. Companies facing higher prices for their inputs and consumers who are unwilling to pay more are eager to employ new technology that can cut their costs and improve everyone's standard of living. I think that inflation can be a good thing for the economy.

Man: Andrea, you are such a bad girl! But I'm not in the mood for playing the monetarist-professor-and-his-naughty-Keynesian-grad-student game right now. Let's watch some TiVo.

Woman: Why bother? Based on your viewing habits, pretty much all it records are C-SPAN and SpongeBob.

Man: That's it! SpongeBob! He's just what the doctor ordered.

Woman: Well…okay. Just try not to get overstimulated this time.

Man: Don't worry. If anyone can engineer a soft landing, I can.

Copyright 2004 by Miller Risk Advisors. Permission granted to forward by electronic means and to excerpt or broadcast 250 words or less provided a citation is made to