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To: mishedlo who wrote (66513)	2/11/2001 11:37:47 PM
From: Shack	Respond to of 436258

Although heinz could explain it better, its essentially how the treasury creates monetary stimulus through the manipulation of the M3 money supply. If they increase M3 through the addition of reserves, borrowing against these reserves is allowed to increase fuelling asset inflation. In this case, they are actually reducing the M3 money supply which means there is less liquidity to finance asset (which is often stock prices) inflation. The trend is more important than one transaction. I only posted this because they have been adding reserves at a rapid rate recently and this was the first reduction I'd seen in a while. This liquidity has the potential to support the market and is the biggest threat to the bears.