Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: Oblomov who wrote (15443)	3/8/2000 10:19:00 AM
From: pater tenebrarum	Respond to of 42523

Andrew, remind me later...i'll have to look into this. hb

To: Oblomov who wrote (15443)	3/8/2000 9:05:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

Andrew, i don't know how they measure the 'multiplier', but i don't think it means what you imply it means... to wit: the non-bank financial institutions like Fannie Mae, Ginnie Mae and Freddie Mac have been expanding their balance sheets in recent years at a breathtaking pace. when they do that, no new credit is created, as only banks in conjunction with the Fed can do that, so their activities will not have an effect on the money supply. but the velocity of money has been increased through their activities, and that has helped fuel the bubble. considering that at the same time the Fed has indeed helped increase the money supply vastly in recent years, i can not imagine that a decrease in the multiplication effect has taken place. i would rather expect the opposite to have happened. look at it another way: neither households nor corporations have shown an unwillingness to take on fresh debt. in both cases debt is growing faster than income, and has done so for years. 'pushing on a string' only happens when there is an unwillingness by borrowers to borrow and lending intermediaries to lend. neither is the case. so the question remains: how do they arrive at this 'multiplier'?