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To: Glenn D. Rudolph who wrote (114687)	1/6/2001 10:12:08 PM
From: GST	Read Replies (1) \| Respond to of 164684

Not exactly -- the fed is "creating money" by augmenting or diminishing the capacity of banks to lend to their customers.

To: Glenn D. Rudolph who wrote (114687)	1/6/2001 10:22:05 PM
From: GST	Respond to of 164684

BTW: One of the things that people might not know about Japan is that their low interest rates do not mean it is easy to borrow money. They cannot lend to new customers because the loans on their books are often non-performing. They have been slow to call the loans and mark them to market. In the mean time, companies with new business opportunities are refused credit. Imagine something like that happening in the US -- say the telecoms and utilities went sour at the same time and missed payments. The banks would be in a weaker position to lend to new customers. This can be a reason to increase liquidity.