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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Shack who wrote (64076)2/1/2001 7:41:55 PM
From: UnBelievable  Read Replies (2) of 436258
 
In The Short Term It May Be That A Significant Portion Of The Inflationary Nature of Excess Currency Production Actually Is Primarily Focused On Financial Assets (Stocks).

Given the extent of foreign investment currently in our market I would imagine that the amount of excess currency which would need to be created to maintain nominally stable or growing stock prices given the inevitable repatriation of foreign investments would be significantly greater than we have seen thus far.

The problem is that the market at this time is acting like a sponge absorbing the excess liquidity. But as soon as the process of attempting to convert the equity assets into real stuff begins (and it has) the result has to be rapid deflation of the stock market or ruinous levels of inflation.
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