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To: Machaon who wrote (65857)	3/15/2001 10:25:56 PM
From: teevee	Respond to of 116993

Robert, Here are a few more random and rambling thoughts on << The economic slow down is because the money supply can't keep up with growth/demand. >> As the economy and population grows, more money is required in the system. The money supply has to at least match and often slightly exceed growth. When growth outpaces the money supply(ie. there isn't enough money in the system), there has to be a slow down. Similar effects happen when a disproportionate amount of available money goes into one sector of the economy and then leaves. Thats what the tech bubble was all about. Unfortunately, other important sectors of the economy that also require capital were neglected and for a long period of time. For example, I believe rates will come down, not to save the markets, but rather to make investment where it is needed the most also appear to offer relatively attractive returns. Examples of where there is a need for capital is in infrastructure like maybe more power plants and projects like the Alaska gas pipeline. In addition to supplying new money (the money supply), the "economic" climate has to be managed through interest rates to facilitate shifting or re-allocating existing capital to where it is needed the most at any particular time. In an ideal system, where capital is needed the most should also be where the best opportunities and returns are(ie. high prices due to shortages whether it is a commodity like natural gas or electricity or the "invisible hand" or supply and demand etc), but that is not always the case in reality. ......as for the preposterous notions on this thread about re-introducing the gold standard or gold backed currencies-it would throw the world economies into a perpetual depression full of nothing but hardship, starvation and misery.