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

To: Skeeter Bug who wrote (87309)	12/20/2000 1:09:05 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 132070

lower refinanced equity and double digit y2k money are not sustainable phenomenon. Well, I think we can agree on that... But since we no longer have double digit Y2K money growth, but almost the opposite, with money supply currently running 1% growth, I think AG is "overcompensating". Again, he hit the monetary accelerator because of the fears of psychological panic by the public. Remember, all it would have taken to crash the financial system is for 100 million people to each take $5000 in cash reserves out of the bank. There just wasn't enough paper currency in circulation to handle such a run and the Fed actually stopped burning worn out notes and let them continue circulating through Y2K. There were ALL KINDS OF NASTY events that COULD have transpired last winter had things NOT gone as well as they did. The dirtyoldbastard says so succinctly, the markets are psychologically driven. This current recession talk is psychologically driven as well since AG is keeping rates much higher than the yields on the 30 year bond. That is inducing a disarticulation in the financial markets and sending a signal that the Fed is being overly aggressive. Regards, Ron