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To: nihil who wrote (97472)	1/25/2000 8:17:00 AM
From: GVTucker	Respond to of 186894

nihil, RE: Money is created by borrowing, and destroyed by repaying debt. This is the multiplier effect that exacerbates the actions by the Fed. That is why a $67 billion decrease in the money supply results in a much higher decrease in debt, and thus a lower amount of total investment.

To: nihil who wrote (97472)	1/25/2000 9:47:00 AM
From: Robert Douglas	Read Replies (1) \| Respond to of 186894

nihil OT Money is created by borrowing, and destroyed by repaying debt. Tell that to the monetarists! This is a simple concept that they don't seem to grasp. They think that money, and its associated demand for goods and services, can be created by supplying the banking system with reserves. They ignore the fact that someone needs to borrow that money before it is "created" and then it needs to be spent before it increases demand. You would think that monetarism would have been discredited by the events of the last two decades but even today Euroland is burdened by a central banker who worships at the altar of monetarism. <rant off>