Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (88783)	3/18/2001 6:52:02 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 95453

Tommaso, what I'm trying to get across is that money supply must grow when there is an unwillingness in the market to hold other value instruments such as stocks, but also an unwillingness to exchange those dollars for other currency, or gold. And if the Fed is stepping in to increase money supply by re-purchasing treasuries in the market, thus putting cash in the pockets of the treasury sellers to be utilized elsewhere, they are increasing the amount of cash available, reducing the interest rates that are justifiable, and increasing the incentive for cash holders to re-invest in assets other than cash... (phhhewww!!!).. Thus, MZM growth is determined by both Fed actions in the repo markets, AND the growth of money market accounts from people selling equities and raising cash. And since this money is staying in the US and not fleeing overseas (where would it go), that causes MZM to increase. Thus, the Fed only has control over the repo market component of the MZM. The rest is determined by the market's preference for the ultimate safety of cash and money markets. And remember, the technology sector, while large, is not the end-all, be-all of the US economy. It certainly makes up a large part of the California economy though, and high energy prices again this summer could create additional pressures on the sector. And this increase in energy dependence in CA, and the likelihood that Japan is going to move in the right direction (although not as far as I think necessary), should shore them up through another year. And btw, I personally don't care what needs to be done to make the economy continue to chug along. The gold standard is just as problem-riddled as any Fiat system. And in fact, I would say that a floating exchange rate system that reflects the economic potential of a society, and not the quantity of gold they have, is the best manner in which to govern monetary policy. The problem is that all of these systems are dependent upon a rule of law and respect for the debts and obligations of each participant. Any nation that gets to the point of saying "screw you Central Bankers.... we're not paying off our national debts" is a far greater risk to the financial system than what we saw in Russian, Mexico, Brazil, and no maybe, in Japan. Fortunately, the Japanese owe most of their debt to their own people. And we know governments will always screw their own people over if they can get away with it. <vbg> Regards, Ron