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

To: valueminded who wrote (74014)	1/19/2000 11:49:00 AM
From: Freedom Fighter	Respond to of 132070

Chris, I'm not sure that I buy that argument either. I think in general to keep the stock market and the economy going you just have to increase the money supply at a rate that somewhat corresponds to economic growth. (whatever that is) The problem may be that the amount of money required to keep the stock market going while expanding the economy is more than the economy itself needs at this stage. That's because the stock market is out of sync with the real economy. Furthermore, it's possible that as asset prices increased relative to economic activity, the economic activity itself became more and more dependent on the continued increase. This is evident in trading results, capital gains taxes and government revenues, pension funding, borrowing against assets, borrowing to buy stocks etc.... I think it blows eventually unless AG.com is as good as his reputation. If he breaks the money supply enough to match what is required by the economy, stocks stop going up much. If stocks stop going up, the economy gets hit over time by the lack of required capital gains. If he continues to provide enough liquidity to keep stocks and the economy going, it is way too much for the real economy and either the dollar blows or inflation hits. Wayne