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

To: BGR who wrote (79316)	4/11/2000 10:49:00 AM
From: Tommaso	Read Replies (1) \| Respond to of 132070

The Y2K money has not been withdrawn by the Fed. There's a small decline in M1 (which is now considered meaningless anyway, because of bank sweeps of cash from checking accounts to savings), but M2 and M3 have continued to grow, only at a slightly reduced rate. bog.frb.fed.us That is what makes possible the expansion of credit that contributes to the insane bidding up of stock prices.

To: BGR who wrote (79316)	4/11/2000 11:15:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

BGR, >>The article claims that the Y2K Monetary stimulus has been completely withdrawn.<< The Y2K stimulous was mostly in the form of tri-party repurchase agreements instead of permanent reserves. Don't ask me to explain the process or thinking in detail because I can't. Soon after the turn of the year the Fed slowly started unwinding them. It's not clear to me how these agreements affected stocks or the money supply, but I suspect that it had a net positive influence last year because the market exploded as soon as they were put in place (as did the money supply). I would say that unwinding them has been a drag because we've had all time record mutual fund inflows and extreme margin debt growth so far this year and the market is going nowhere fast. Wayne

To: BGR who wrote (79316)	4/11/2000 11:22:00 AM
From: Mike M2	Read Replies (2) \| Respond to of 132070

BGR, you like James Grant ho ho ho he a few books. " Money of the Mind" " Minding Mr. Market" and " The Trouble with Prosperity" . James Grant is a believer in the Austrian school . I don't know where this Y2K removal comes from that is not what I understand but you know what I may be wrong -g- you must also remember that more credit is created outside of the banking system than by banks and the monetary aggregates do not capture this credit creation. Non bank credit does not increase the money supply but it does increase the monetary velocity. The salient point is that all credit regardless of the source of its creation stimulates asset prices. Mike ho ho ho