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To: Stock Farmer who wrote (49190)	2/21/2001 2:30:47 PM
From: Tulvio Durand	Read Replies (1) \| Respond to of 77397

.. Beware of false bottoms. Magicians have used them since the dawn of time. LOL. NASD has successfully bounced off 2250 bottom four times since last December and each time has reinforced the notion that it is the real bottom. If penetrated, then it's free fall to who knows where. Tulvio

To: Stock Farmer who wrote (49190)	2/21/2001 8:43:22 PM
From: Steve	Read Replies (3) \| Respond to of 77397

John do you have any idea how the money supply increases? I'll tell you so you won't have to guess. The money supply grows primarily through the actions of commercial banks in loan (or money capital) creation. When interest rates are lowered the demand for loans or money capital increases. The money supply increases by the limits of the money multiplier (credit expansion multiplier) (1 - reserve requirement) associated with loan creation. The expansion of the money supply from loan creation is a well known phenomenon. The Federal Reserve has little direct control over the money supply but it can effect high powered money or the monetary base by buying and selling Treasury securities. This is done primarily to defend the FFR in the marketplace. (I am so pleased that bears reveal their ignorance it makes the defenestration of their notions that much easier.)