Tom Harkin: “as the second largest economy, Japan's poor economic situation is going to have a very significant effect on our economy…”

“as the second largest economy, Japan's poor economic situation is going to have a very significant effect on our economy and the economies of most other countries. Again I quote Fred Bergsten, a very respected expert in international economics. He urges that ``the United States and European Union should globalize the strategy of cutting their own interest rates. This would encourage capital reflows to the crisis countries, reduce their debt burdens and improve their competitive position by promoting a stronger yen. It would also ensure continued world growth and help prevent further stock market declines.'' Mr. Bergsten went on to note the fact that the 30-year bond interest rate is below the Fed funds rate and urged a cut in this rate by a full percentage point. Chairman Greenspan recently said that the U.S. can't ``remain an oasis of prosperity'' in ``a world that is experiencing greatly increased stress.'' Again, this statement does appear to be a significant and positive shift in the views of the Chairman of the Fed. However, I am concerned that there are members of the Federal Open Market Committee who both refuse to consider the global economy when determining monetary policy and are still worried that low unemployment will automatically trigger inflation.”