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To: Mark Adams who wrote (64133)	2/2/2001 8:31:11 AM
From: UnBelievable	Read Replies (2) \| Respond to of 436258

They don't care long, short, adjustable or fixed. As long as the loan fits the profile, can be packaged, insured and sold. But what they can sell it for is based on what it is. The cost of capital is a function of time and risk. Uncertainty concerning the cost of capital, or conversely the lenders real rate of return increases the cost of capital. The higher the cost of capital the less real long term capital formation will actually occur. Real capital formation is one of the primary ways in which an economy can improve its growth and productivity, and ultimately the real wealth of its citizens. And in fact ensuring the long term stability of the currency and thereby helping to minimize the long term cost of capital is the raison de' etre of the central bank. You can be forgiven for not knowing this because it seems that while there might have been a time when the current chairman of the US Federal Reserve was taught this he clearly did not understand it or has forgotten. BTW - It doesn't matter if what I say sounds intelligent to you or not. Nor have you explained the way in which excess liquidity not going to be inflationary in the short or long term because it is going to be absorbed somehow by the debt market.