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Recession Cause, Impact Proactive, Structural Simulation: Optimal Monetary Policy Trilemma Problem Solution:  achieving sustainable economic, capital market growth  and prices stability without asset bubbles  central bank policy workshop
by Proactive Structural Dynamic Optimal monetary , economic, fiscal, trade policy , capital markets integration, Operation Simulation Analysis ( OSA ): Chinese (¤¤¤å)

Optimal US Fed and Global central banks Monetary Policy, achieving sustainable GDP and Capital Market Growth, and Currency,  price stability without  Inflation,  Asset Prices bubble OSA( Operations Simulation Analysis ) Performance Guidance and Control:

30 years global financial , currency, asset bubble burst financial crisis simulation indicating that high GDP, Capital Markets and Housing Markets Growth, free float/peg  currency are not, should and can not  be sustainable and it is  inflationary, will  repeating eventual financial crisis, asset bubbles burst with or without central bank macro-economical control,  even inflation stay below 3 %. Only these integrated proactive structural economic systems n achieve GDP, capital markets growth, currency, price  stability
Comment by Warren Huang - April 3, 2008 Wall Street Journal Real Time Economic Blog at 8:52 pm

Proactive Structural Dynamic Simulation of US Fed/global central banks Optimal Monetary ,Economic, Fiscal Policy Impact on Inflation, unemployment, GDP, Assets (Stocks, Bond, Housing, Commodity) Prices Bubbles Identification, inflation, deflation, burst, recovery, early warning , performance guidance and Control in  achieving optimal growth and price stability  中文 (Chinese)
 The What, Why, How and  timing  in  central banking Optimal Predictive Monetary Policy: Integrated Macro economic Control, imbalance, Systemic Risks, Impact on  20 industrial sectors demand, supply, prices   and Capital markets Asset Prices market forces mechanism and Stress Testing Early Warning System achieve Sustainable Growth and Prices Stability
Dr. Warren Huang, pioneer of proactive monetary policy presented to China Peoples bank governor sponsored Asian central bank governors, US Fed Chicago, Ohio governor, ECB, UK, Taiwan  24 global central bank governors policy and risks management conferences  
Thousand proactive structural proprietary models tracking , forecasts year, month ahead last 20 years Monetary, Economic, Fiscal Policy Impact on US, Asian, European, South American, Russia  macro economics inflation, GDP, consumer spending indicators, financial economic interest rates, currency, capital markets  prices, industrial economic supply, demand, commodities prices mechanisms, trade economics import/export pricing Integration, Interaction for root causes, onset, recovery and early warning and prevention of NPL of global financial, currency , energy, asst price bubble crisis. presented to 20 global central bank governors , financial risks management conferences since 1998.  
by OSA pioneer Dr. Warren Huang who pioneer OSA proactive, structural oil, energy, downstream products prices simulation, patented, published on US Oil& Gas Journal 1983, Hydrocarbon Processing information systems handbook 1991-2005, millions copies circulated to 78 countries
He directed 1000 senior, graduate global strategic management and industrial economic students developed the integrated global economics and capital market systems out of last 20 years IMF monthly statistics and global  economics and capital markets data( Bloomberg, Reuters,SINA, Yahoo Finance, implemented for Taiwan 300, 000 import/exporter members daily 100 countries currency, 5000 energy, commodities, and products import/export strategy, and US, China, Taiwan 15 cites 30 million TV, radio HNW, institutional investors, offered thousands global strategic investment workshops for global energy, banking finance CEO, executives from 78 countries

Integrating macroeconomic control,  inflation, financial economic  interest rates, currency,  20 industrial sectors economics demand, supply, prices markets forces mechanism and WTO global trade economics into  daily global macro, financial, industrial, trade economic activities and its interactions

Optimal Trilemma solution by Proactive Structural Dynamics Global Economic Systems Simulation, Integration OSA
tracking monetary, economic, fiscal, WTO policy impact on

Macroeconomic OSA    Financial Economics OSA   Industrial Economics OSA      Trade Economics OSA
inflation, GDP,            Capital Market prices          industrial sectors demand        commodity ,products
unemployment             Currency, interest rates     supply, commodity, asset        import/export prices
consumer spending                                              prices bubble mechanism        global currency prices
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Global Economic and Monetary Policy Interaction, integration OSA
USA   Asian China  Hong Kong   Taiwan    Thailand   Japan    S. Korea   Singapore  Malaysia  Phillipines  Indonesia   Viet-Nan   India    Mexico   Argentina  Brazil   UK/EURO  Russia/E. Europe 

Breakthrough Innovation in Global Capital Market Equities Market Prices Valuation Models
The only and most reliable structural dynamic deterministic decision simulators tracking, forecasts months ahead last 20 years global economic, financial crisis, asset bubble, and daily capital market asset  ( interest rate, currency, commodity, equities, stocks, bond futures, derivatives ) prices market forces mechanism, avoided trillion dollar market loss and billion dollar supply chain cost due to current probabilistic models based , speculation over daily economic, business news, technical charting market momentum based capital market asset prices and risks models ( CAPM ), presented to  24 US, European, China, Taiwan , Asian central bank governors, financial risks and wealth  management , futures, derivatives prices forecasts conferences and on this website www.osawh.com  tracking daily results , visited by million global government, central banks, banking, finance, corporate executives universities  since 1998.  
 Monetary Policy Impact on Global Macro economic cycle and Financial Markets Dynamics OSA
Development and implementation OSA/Global and OSA/US simulation systems
Global Central Banks Monetary Policy, Oil prices shocks Impact on Macro economics Risks Simulations
Monetary Policy for Sustainable Growth: OSA—Global Asset Price Bubble Burst Simulation
Dynamic tracking simulation of last 1980, 1990, 2001 US, Japan, China, Taiwan, Hong Kong, Korea, ASEAN, Russia, South America, European stocks, properties prices impact on consumer and business spending, macro economics GDP performances , to predict, forecast overpriced asset prices resulted consumers spending imbalance and business profit slump, leading to bubble burst and abrupt change in consumer and business confidence caused stock prices plunges with average error below 1.5 %, correlation constant above 0.95. These deterministic, dynamic simulation of last 20 years global asset prices, and economy boom and bust of the asset bubble vicious cycle of excessive monetary policy, low interest rate induced sustained long term bull markets stocks prices gain caused consumer and business spending in real estate properties pushed soaring housing prices and rent. And deficit spending (negative saving) in stock markets, pushed the stock s even higher, until abrupt reverse of consumer and investor confidence --the bubble burst- plunge of stocks (recent internet and biotech) and properties prices as it happened in US, Japan, Taiwan in 1980, 1987, 1990, energy crisis, EURO 1992 currency crisis, 1994 China runaway inflation, 1995 Mexico crisis, 1997-98 ASEAN, Japan, Korea, Russia, Brazil currency crisis, all caused by overpriced stock prices due to excess monetary policy and high GDP growth
1. Monetary Policy, oil prices impact on inflation, old and new economy corporate earning and global stock prices,:
2. Global stock prices and monetary policy impact on consumer and business spending.
3. Global stock prices, wealth effect , monetary policy impact on housing properties prices and rent
4. Global stock prices, wealth effect ,monetary policy impact on GDP macro-economics performance.
5. Global stock prices, monetary policy impact on procurement manager index
William FRB/US and FRB/Global model provide on Monetary policy impact on US and global macro economy and financial markets However, the following OSA approach rigorous equations have been tracking successfully 100 IMF members countries central banker monetary policy impact on the macro-economy :
Inflation rate = F (Money supply growth rate %, Commodity index, Dollar exchange rate)
GNP = F (Money supply growth rate %, Interest Rate, Export Growth Rate)
Property prices = F (Money supply growth rate %, Interest Rate, stock index)
NAPM = F(Money supply growth rate %, Interest Rate, stock index)
Business, consumer spending = F(Fed fund rate, Nasdaq annual change, Yen exchange rate)

OSA/EURO for Economy and Financial Markets Simulation:: These formulas tracking the EURO 11 member countries monetary policy inter-bank interest rate converged to 3 % and with 4.5 % money supply growth to meet 2 % inflation and 2.5 % GNP in 1999 and Asian recovery, US soaring stocks, housing market wealth effect pushed consumer, business demand for EURO export, weak EURO ,pushed oil price to 37, 6 rate hike resulted slowdown in business, consumer spending , plunging prices, corporate profits, stocks prices to cool off US economy, drag NAPM from 58 to 41.2. GNP from 7.3 % to 0.5 %, EURO money supply growth exceeds 4.5 % to 6 %, inflation 2.8 % and GDP of 3.5 % lead to EURO 7 interest rate hike in 2000 to tightening the money supply growth to 4.5 % and inflation to 2 %, GDP to 2.8 % , falling oil price pushed EURO from 0.83 to 0.95 cut Into EURO export and corporate earning and stock prices retreat 15 %

OSA/US for Economy and Financial Markets Simulation
These equations predicted 1998 winter US three interest rate cuts to 4.5 %, provide m2 money supply growth rate expanded to 10.5 %, and dollar plunge 20 % to boost export Dow stock index soared form 7200 to 9600 and provide 4 th quarter 1998 GNP 6 %. to prevent US from danger of deflation caused by Global Financial Crisis related credit crunch, it also predicted 1993 deflation: money supply dropped to ? % even the fund rate cut to 3 %, led to US GNP contracted to 3 %... US, inflation up to 3.5 %, GDP of 7.3 % in winter 1999 due to Y2K excessive money supply lead to Dow soaring to 11400, Nasdaq doubled to 5100, these wealth effect further pushed consumer spending to 8 % and tripled oil prices 2000 , soaring property prices 4 th quarter 2000 GDP slowdown to 1.1 % inflation still at 3.6 % despite Fed 6 interest rate hikes , However, it finally cooled off in 2001 first quarter facing recession threat, forced Fed cut rate by 1.5 %, US consumer, business spending, GNP, Dow Jones simulation chart can be found on chart 1-4, more results can be found on my full workshop tomorow.
US housing prices bubble Simulation /Forecasts:
This equation predicted US 6 year economic expansion since 1995, Dow Jones tripled from 3600 to 11400 , Nasdaq soared 5 times lead to wealth effect pushed nationwide housing price index up 50 % with some major high tech cities like San Francisco, Silicon Valley, Boston, NY, prices even tripled. These bubble burst in 1990 Fed interest rate hike resulted price plunge 50 %
OSA/Japan: Macro economics and financial markets applications:
These equation indicated Japan enjoyed 9.6 % GDP growth at 13.5 % money supply growth and double digit export growth are excessive, inflationary in 1990 lead to Nikkei to 38000. And benefited by soaring export and BOJ stimulus package to boost the domestic demand boost the money supply from 4 % to 10 % and at zero interest rate Nikkei rebound from 15000 to 22500 lead Japan getting out of deflation in 2000. However US, EURO slowdown and rising oil prices lead to Japan trade deficit, export decline, US high tech stock plunge drag Japan money supply growth rate to 2 % ,Nikkei to 11500 , despite Bank of Japan inject money into the financial systems, buy back 368 billion stocks to remove banks nonperformance and boost money supply led to strong Nikkei rebound from 11600 to 13500,will facing resistance around 13000-14000. It can do little to stop global slowdown, Japan declining consumer spending and GDP contraction and 4.9 % high unemployment
Japan Housing prices bubble Simulation /Forecasts:
This equation predicted Japan housing prices soared 10 times during the late 1980’s as money supply growth soared form 5 % to 13 %, Tokyo house prices soared 10 times, ranking top in global prices, as Nikkei soared from 15000 to 38000 . Tokyo house prices plunge 70 % as money supply growth plunge from 13 to 3 %, during 1990- 1998, It rebound 30 % as money supply growth from 2 % to 5 % in Asian crisis recovery in 1999 and government economic stimulus package, Nikkei rebound from 13000 to 18000 in 1999,. However it down 10 % since Nikkei plunge from 22000 to 11500 in 2001, simulation results will be demonstrated in the conference.

OSA/China Financial Markets and Economy Application:
How China avoided 1994 Financial Crisis and made soft-landing and 1998 Asian Financial Crisis Simulation:

This author with Ji and Dai spending half time in China during 1988 - 1998 implementing these relationships tracking Taiwan, Hong Kong and China peoples banks monetary policy impact on inflation and GNP and interest rate, Taiwan and RMB currency and stock markets prices. It accurately tracking and predicted daily China economy and financial markets activities, how the current Prime minister Zhu Rongji successfully managed China's monetary policy led China avoided possible financial crisis by successfully controlled the inflation, to bring it down from 35 % and 100 % currency depreciation to deflation of ?.5 %in 1999 and current 2.5 % by cutting the money supply growth from peak of 35 % in 1994 to 1996 15 % to achieve soft-landing and boost domestic demand to maintaining 15 % money supply growth 7.8 % GNP growth which lead to Shanghai stock index plunge from 1994’s peak of 1550 to 333 and stabilized traded between 600 and 800 during 1994 and 1996 through three stages credit tightening to cut the domestic demand and reduced the import duty by 30 % to reduce the importing inflation and implemented stock markets and financial institution regulation and full transparency, ban short term foreign capital speculation in the housing and stock markets achieved perfect soft-landing in 1996. And also predicted 1996 interest rate cuts leading to bull markets, with Shanghai A index tripled from 520 to 1650 . ( all predicted by the author on lectures to 20 million 15 cities TV, radio programs and national newspapers during 1994- 98 .The state enterprise reform and Asian crisis resulted high unemployment and export slowdown, pulling the money supply down from 1996?s 28 % to 14 % in 1999, drag the GNP form 9.5 % to 7.8 % . But recovered strongly by domestic stimulus package and strong export growth (40 %) this year in soaring global demand, . with GDP 8.3 % and Shanghai index soared to 2100 new high while global stocks under correction due to US interest rate hike
The declining export, 50 billion domestic public construction deficit budget and 150 billion short term debt and falling corporate profit and falling prices as entering WTO this year. China will feel the global slowdown early 2001 , as stock prices just completed under 10 % correction predicted by the author tracking of China macro, financial trade economic impact on 700 listed corporate industries trends, profit margins and stock prices
China Housing prices bubble Simulation /Forecasts:
This equation predicted China housing prices soared 10 times during 1986- 1994 as money supply growth soared form -5 % to 35 %, Beijin, Shanghai house prices soared 10 times, ranking top 5 in global prices, as Shanghai stock index soared from 150 to 1500 . Housing prices plunge 70 % as money supply growth plunge from 35 to 12 %, during 1994- 1998, It rebound 30 % as money supply growth from 12 % to 15 % in Asian crisis recovery in 1999 and government economic stimulus package, Shanghai index rebound from 520 to 2100 since 1999,.
 Contact :  whuang@osawh.com    Whuang3928@aol.com   Fax : 1-510-524-4484(  San Francisco, USA)
                    Copyright2007 osawh.com/ Dr. Warren Huang

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