Hi Eric, I posted the following MDA post here a couple of weeks ago. There are a few before-&-after related postings on the Mda thread that are quite informative.
Message 12189246
Thread/LG et al,
I want to clarify this liquidity stuff everyone is
talking about.
For all the money a person owns, he or she usually has
less than 1% of it in paper. Check your wallets, and
your coin drawer to confirm it. In actuality, for all
the money that people own (in the market
of plastic money, stock money and Byte money), there is
only 2% of it represented by paper money ($$ bills).
With this background, the fed focused on one possible
scenario that they can fix. Consider this: In my neighbor....I foresee two possible outcomes due to this: 1. Larger
number of burgularies(Be careful),
2. shortage of paper money that may lead to panic.
The second outcome is what the fed is working to ensure does not occur by printing more paper. BUT BY PRINTING
MORE PAPER THEY ARE NOT INCREASING MORE MONEY FOR PEOPLE
TO INVEST IN THE MARKET. Therefore, i don't buy this
"market going up due to the fed printing more money
argument (please correct me if you have a different
viewpoint)." Market is going up because, the common
man has become interested in making the same money
their freind is making. Historically, this has been
the sign of getting out of the market. In the mean
time, you have to put up with, "xyz is making
so much money in the market, why don't you also day
trade". This reminds me of the poem by Kipling called
If...... |
