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To: RWS who wrote (23521)	8/20/1999 2:20:00 PM
From: pater tenebrarum	Respond to of 99985

of course coupon passes are related to liquidity...it's basically the creation of money out of thin air, as government debt is monetized. i will send a mail to Don Hays, maybe i can get him to discuss the matter with me. i'll post whatever i can find out from him. regards, hb

To: RWS who wrote (23521)	8/20/1999 3:47:00 PM
From: Tom	Read Replies (1) \| Respond to of 99985

RWS: That is correct. The Open Market Desk's purchasing of USG securities and the assertion by Mr. Hays are not directly related. I believe what Mr. Hays alludes to is the money supply currently growing at a 7.5% y-o-y rate; however, at this point we are still nearly $50 billion dollars behind the massive amount churned-out by the Fed activities in 1998. Why, when we are setting a record course for liquidity injections, is it not displayed in the money supply? Quite simply, the path from point of injection to investment will not necessarily register in accounts that would be manifested in the Fed's report on money supply. Too, that "path" is indeed slick. Regards, Tom (aka Mr. Moto)