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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?

To: 16yearcycle who wrote (6808)	5/5/2001 11:19:04 PM
From: craig crawford	Read Replies (1) \| Respond to of 57684

Far be it from me to assume that I know what the argument of the "bears" is, but I think it's reasonable to assume that one of the chief arguments from the bears is that Greenspan can print as much money as he wants but he can't force banks to lend money and he can't force consumers/businesses to take on more debt in the face of declining economic conditions. Just because there is lots of money sloshing around doesn't mean people will buy your favorite Nasdaq bubble stock with it. Doesn't mean they will go on a shopping spree to stimulate the economy. They might decide to pay down some debt with it instead, because they are afraid of losing their job. I don't think there is a problem with too little liquidity or lack of stimulation. I think the liquidity is just being shifted away from bubble stocks and into other areas. It's obvious that Greenspan knows how to flood the economy with (excess) liquidity. Look what happened off the bottom in '98 and in '99 leading into Y2K. The major difference then was people had a total obsession with stocks. As long as stocks kept going up they didn't mind accessing that liquidity. After all they were getting richer watching their stocks quadruple. Things were booming so people weren't worried about debt levels and things like that. Kudlow is always ranting about pump more money ino the system. Lower rates 100 basis at a pop. Do whatever it takes to make people go deeper into debt so spending will pick-up and the economy will start rolling. That aint going to solve anything, that will just make it worse.