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To: KeepItSimple who wrote (17914)3/17/2000 2:05:00 AM
From: Dwight E. Karlsen  Read Replies (1) | Respond to of 42523
 
KIS, you know that there is no direct relation between increase of money supply, where the stock market goes. At least, no provable relationship.

The Fed is not out there buying the QQQ, Diamonds, Spyders, or the Spoos.

However, if member Fed banks need or want money so badly that they are willing to pay more than the discount rate is supposed to be, then the Fed will increase the money supply through repos or coupon passes. It's as simple as that.