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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?


To: Hank Stamper who wrote (6629)7/7/1999 11:35:00 AM
From: Carl R.  Respond to of 15132
 
To finance debt the government has two basic choices: print money or borrow it. When the Fed buys bonds, it substitutes printing money for borrowing money, and thus increases the money supply. The money that was invested in bonds has to reinvested somewhere, and with less bonds available some moves to stocks.

Carl