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

To: Terry Maloney who wrote (78880)	4/1/2000 9:42:00 AM
From: Tommaso	Read Replies (2) \| Respond to of 132070

If the "core rate" of inflation is not soon up to 6%, then monetarism is meaningless. It's already beyond that when energy prices are included. I wonder if the rising US interest rates might be pulling in huge amounts of dollar deposits that our out-of-whack trade balances have created overseas. The repatriation of dollars would certainly affect the US money supply. The stock market bubble of the 1920s was financed in part by money pulled in by high margin interest rates that people were willing to pay to hold stocks. I doubt that there is anyone who undertsands all the financial mechanisms at work right now. Indeed, the 1920s have never been sorted out to everyone's satisfaction. One thing that does seem clear is that, even with the bulge in the money supply, there is no way that more than a small fraction of the "wealth" held by people in stocks can ever be converted into spendable dollars. The money simply is not there. And the effort to liquidate even a small fraction of this "wealth" will result in its evaporation.

To: Terry Maloney who wrote (78880)	4/1/2000 11:32:00 AM
From: Knighty Tin	Read Replies (3) \| Respond to of 132070

Terry, Kinda makes you not want to make a short term bet against Goldman in the bond and currency markets. <g>

To: Terry Maloney who wrote (78880)	4/2/2000 12:16:00 PM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Terry, Let me see if I have this straight. Goldman advises the Fed to not pay attention to the money supply. Goldman makes a fortune on deals, commissions, underwriting, etc... Goldman comes public at over twice the long term average price for investment banks. Whenever Wall St. is in trouble the Fed responds with another round of monetary inflation and reflates the bubble. Gee the world suddenly makes a lot more sense. I guess I haven't been paranoid these last few years. (g) There's one part of story not yet told. When it does finally blow up, the taxpayer will be called upon to bail out the system. You know, the taxpayer that will be left holding the stock market bag (bubble) that the street helped encourage and promote. Wayne