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If an Irrationally Exuberant Moment Turns into the Right Moment. . .

by Ross M. Miller
Miller Risk Advisors
www.millerrisk.com

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
www.millerrisk.com.