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To: ild who wrote (99942)	5/5/2001 7:27:23 PM
From: Giordano Bruno	Respond to of 436258

Money supply figures dash hopes for interest rate cut - In South Africa. Imagine that. bday.co.za

To: ild who wrote (99942)	5/7/2001 1:33:58 PM
From: pater tenebrarum	Respond to of 436258

i think the involuntary contraction in money supply growth will come later in the cycle. since the dude mentions Japan, bank lending continued to grow there for a full six years after the bursting of their asset bubble. at the time of the bubble's demise, Japan's banking system was the envy of the world. i believe what's generally misunderstood is that the visible , apparent health of the banking system when a snapshot is taken at the height of a boom does NOT tell the real story. what looks like adequate capital can quickly become inadequate as defaults mount. Kasriel's conclusion that the surge in M2 guarantees a surge in economic activity is also not necessarily correct. there are numerous signs that the most recent borrowing binge is largely due to increasing consumer and corporate financial distress - emergency credit lines are used, and j6p is borrowing from Peter (Fannie Mae) to pay Paul (whichever credit card arrear is the oldest). and to finance recurring expenditures, which have been subject to enormous inflation rates. so it is not a 'clear signal'. it would be, were this a run-of-the-mill post war business cycle, however, it is not.