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

To: Boca_PETE who wrote (7755)	8/15/1999 4:58:00 PM
From: Investor2	Respond to of 15132

I guess I should have read your reply before making mine. Sorry for the duplication. Best wishes, I2

To: Boca_PETE who wrote (7755)	8/15/1999 9:02:00 PM
From: JF Quinnelly	Read Replies (1) \| Respond to of 15132

. While I'd say some of this new high powered money would chase those existing goods, I'd think some portion of the new money would find its way into equity and fixed income investments. The effect of these new investments (new money chasing an existing supply of equity securities) would drive stock prices up and would also surely overstimulate the economy (new investments would increase the supply of goods and services). It would also increase prices of fixed income securities and lower interest income on those securities. I agree. The United States did once pay off the national debt, sometime around Andrew Jackson's presidency in the 1830's... and it coincided with a recession. I've seen it argued that there is a direct relationship between those two events, but I can't recall the reasoning just now. The payoff was done via a "sinking fund", which retired some of the debt each year. Thomas Jefferson was a great enemy of having a government debt and a proponent of the sinking fund; but since Alexander Hamilton was the genius who saved America's finances by setting up the funded public debt, I'm not sure that Jefferson was correct. An excellent book on the subject of national debts, and whether they are harmful or beneficial is Michael Veseth's Mountains of Debt. You also will find a good description of "inflection points" which is a phrase BB has been using lately.