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To: Les H who wrote (35598)	12/21/1999 2:16:00 PM
From: Jorj X Mckie	Read Replies (4) \| Respond to of 99985

I am changing the way that I have viewed the fed. I am trying to look at it as if they are trying to get the greatest net positive result. Would the benefits of the things that you have suggested outweigh negatives associated with the bubble bursting? Again, I am trying to look at this from the perspective that the fed knows that the bubble is going to burst, but that the current policy is expected to divert an even greater disaster. JXM

To: Les H who wrote (35598)	12/21/1999 3:16:00 PM
From: Fun-da-Mental#1	Respond to of 99985

Les, re "long-term strategy to cook the government budget deficits". I think maybe this answers my question from earlier today: why is the fed lending more at higher rates? Maybe it's just because they'll get a bigger payback that way. I don't know if money raised by the Fed can flow into the government budget, but maybe this is the plan. Does that make sense at all? Fun-da-Mental Edit: one thing I'm not clear on: the Fed doesn't just give money away, it lends it, so presumably it makes a profit (unless the loans default). What happens to this profit? Does it just get recycled in the form of new loans, does it get siphoned off into the general government budget, or what?