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To: GVTucker who wrote (134130)	5/4/2001 11:38:33 AM
From: dale_laroy	Respond to of 186894

>And that's why I'd just as soon get rid of the Fed's influence on rates and replace it with a computer.< Excellent idea. I have been advocating for decades that the rates be directly tied to the rate of inflation.

To: GVTucker who wrote (134130)	5/4/2001 1:27:57 PM
From: The Duke of URL©	Read Replies (2) \| Respond to of 186894

[Semi OT] The purpose of the Federal Reserve System is to counteract the Government's natural tendency to create easy money. This would reek havoc on the Banking System unless kept in check. The recent spate of over-exuberance in the Stock market was caused by the internet's confusing a large number of new investors that "information" constitutes "knowlege" and a simultaneous weakening of the legal system to correct frauds on a private ongoing basis. The recent "correction" was initiated (if you discount reality for a moment) by the realization that the Telecommunications Deregulation Act was a fraud and the Graham Rudman Bliley Act which repealed the Glass Stegal Act of 1934 caused a substantial reduction of lending to smaller business for a couple of reasons (which was why Glass stegal was enacted after the last Depression) which speeded up the credit crunch. And caused the mini collapse in the market. So, you are correct, reducing the discount rate in this scenario will not create liquidity.