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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Oblomov who wrote (46288)	12/11/2000 6:00:54 PM
From: eddieww	Read Replies (1) \| Respond to of 436258

"it isn't plentiful enough It could be if the Fed wished it so. "If no one is willing to borrow, or no one is willing to lend, then easing interest rates will not cause nominal prices to rise." Right now we have many corporations that would love to borrow if they could to stay in business. It seems a simple supply/demand issue. If no one is willing to borrow, the value of the currency declines. If no one is willing to lend, the currency appreciates. Isn't that right? Last week Greenie seemed to me to encourage lenders to not get too tight, and the money supply has been accelerating for over a month to back that up. He also made the "Greenspan Put" as explicit as a Hustler centerfold or, at least, that was the common interpretation (which I don't share). It seems to me that a flood of liquidity is stimulatory, thereby increasing the likelihood of borrowers, especially corporations, being able to repay. The currency is diluted, which is inflationary. That allows the US to repay foreign creditors in devalued dollars, effectively a lower real interest rate, as well as make our products and services, developed with those borrowed dollars, cheaper and easier to sell to those same foreigners. US consumer credit could continue to expand as well, helping to keep everyone employed and (more or less) creditworthy. -g-