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

To: jj_ who wrote (47393)	12/13/2000 10:16:08 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 436258

<<what do you mean by air drop?>> "Air Drop" is the ClownFreeZone term for Federal Reserve Bank liquidity injections, typically overnight or 3 day repos, but also the dreaded coupon pass (which is essentially a permanent increase in funds injected into circulation vs repos which are short term). The amounts "Air Dropped" during the past 18 months have been nothing short of staggering. It's a mechanism the Fed uses when there are increased demands for funds (despite what you hear on Bubblevision, the money supply has been increased drastically over the past 18 months, despite discout- and Fed Funds rate increases). stls.frb.org Note especially the rapid growth (compared to previous years) in M3 and MZM , which are the broadest aggregates of money measured. This is the beating heart of the bubble (to mix a bunch of metaphors). It is clear that the money supply has continued to grow rapidly due to airdrops and LACK of effective tightening..... Think of the Air Drops as being akin to a military air drop to besieged troops (the best analogy is the besieged Nazi troops, encircled in Stalingrad. Goering promised Hitler they could be supplied by air untill a ground breakout could be achieved. He was wrong.) This particular air drop will meet the same fate, due to extensive liquidity traps developing during the unabated credit excesses built up in the U.S. economy in the 90's.