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To: Robert Douglas who wrote (97486)	1/25/2000 12:33:00 PM
From: Gerald Walls	Respond to of 186894

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. This is the proverbial "you can lead a horse to water but you can't make him drink," or, as was popular a few years ago, "pushing on a string." Japan has experienced this first hand where they lowered rates so far that in real terms money was free but still no one wanted to borrow.