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Politics : Politics for Pros- moderated

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To: Nadine Carroll who wrote (297449)3/21/2009 10:58:45 AM
From: rich evans  Read Replies (1) of 793955
 
Yes, a lot of that money is sitting in bank reserves against losses, on corporate balance sheets for protection, used by the government to buy preferred stock in all the banks, AIG , auto co, auto suppliers, used by FED to replace privated lending for asset backed securities, commercial paper etc.( Their facilities). So that is why the FED thinks no inflation in foreseeable future. Money is not out there chasing goods. No wage increases. Oil, houses, clothing prices way down etc.

But Lindy thinks inflation is coming and he may be right. Recent commodity prices starting back up. And Fed talks about ability to take money back when private sector steps up. But mostly money supply increase not used for demand stimulus although some is. We shall see.
Rich
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