SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Semi Equipment Analysis
SOXX 313.69+4.2%Jan 2 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: michael97123 who wrote (17750)8/7/2004 10:46:43 AM
From: Sarmad Y. Hermiz  Read Replies (2) of 95663
 
>> I dont ever quite get how rates can be so low while at the same time monetary policy is deemed tight.

Money supply expands when the fed allows banks to borrow money, which banks deposit into their vaults, and then lend out 8x what they got from the Fed - by writing checks to borrowers.

Traditionally, most lending goes to businesses and mortgages.

However, mortgages are now sold to China and Japan, so US bank loans are quickly repaid. Or bypassed completely.

Corporations have plenty of cash. They don't need to borrow from banks. And when they do want to borrow, they sell bonds to the public. The public is buying bonds, in lieu of buying stock. To our great pain and chagrin.

Therefor, banks are not making the maximum amount of loans which they are able to. Consequently, they have no need to write those checks that inflate the money supply.

Therefor the money supply does not grow much.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News