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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: sammaster who wrote (74004)	1/19/2000 11:03:00 AM
From: valueminded	Read Replies (2) \| Respond to of 132070

Sammaster: I have heard that arguement before, but I am not sure I buy it. As long as the market players believe that it can only go up, they will be reluctanct to sell stocks (and certainly wont buy bonds). Thus the underlying psychology doesnt require that the money supply to expand exponentially, it just requires a maintainance or modest expansion. Additionally, many means of credit generation/excesses are out of the FEDs control since the total money outside the system (ie stocks exceeds the m3) Additionally, since the FED has stated that it pretty much wont let the market decline significantly, we will be in for extended period of high inflation and poor returns on bonds. (all this imho)