Newmont Mining(NEM) & Newmont Gold(NGC) Message Board

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Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC)

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To: ahhaha who wrote (275)	7/6/1999 12:58:00 PM
From: ahhaha	Read Replies (2) of 587

FED has posted a 5% rate and is now vigorously defending it since the market has a demand for funds exceeding instantaneous supply which wants to raise that rate. It is funny because they have to vigorously defend 5% just like they did 4 3/4%. So how is it that they have achieved any tightening? They haven't, but they will be supplying an equivalent quantity of money which will be swallowed more rapidly because costs have risen at the margin. This means the demand for loanable funds must rise even ceteris paribus so that in defending the new 5% post, they will be creating more money than can go into final production. The differential goes to pay for the inefficiency embedded. It is only a matter of time before the inefficiency accumulates to a sufficient degree such that compensation will have to rise faster than output. Hell to pay.

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