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To: russwinter who wrote (69049)	5/11/2001 10:12:50 AM
From: goldworldnet	Read Replies (1) \| Respond to of 116912

Bill Bonner - HIGH WIRE ACT Mr. Alan Greenspan gave a speech yesterday to bankers in Chicago. His topic, "The financial safety net," described some of the trouble people had gotten themselves into in the past. "Market discipline," said he, "in one form or another was the major governor of bank risk-taking from the early years of the Republic. Advancing technology - telegraph, railroad, and transatlantic cable - disseminated information, the raw material for market discipline, ever more rapidly. In this environment, banks competed for reputation, and hence deposits, by advertising their high capital ratios. "Equity capital ratios, which were as high as 50% in the 1830s, were still a third in the 1860s and more than 15% at the time the Federal Reserve began operations in 1914. "But if market discipline was such an attractive governor for managing risk, why were the nineteenth and early twentieth centuries punctuated by those periodic banking collapses known to historians as panics? 'Panic' was, in fact, a good description, since participants felt it necessary ... to rush to the bank window to obtain their share of what all understood was the limited stock of liquidity before being beaten in the race by others driven by the same incentive." It was to neutralize this incentive - the rush to claim the cash in a bank before another depositor could get to it first - that the U.S. Congress and the Fed rigged up today's "safety net" provisions: various insurance programs and regulations, as well as implicit and explicit assurances that the federal government will come to the rescue when the need arises. Henceforth, the asset in question - money - would no longer be strictly limited. Instead, liquidity (a.k.a. cash, scratch, moolah, dough, fric, dead presidents, green, etc.) would be made available in whatever quantities necessary. This, then, is the modern period in American financial history: Anno Domini Federalis Reservum, over which the emperor, Alan Greenspan of Brooklyn, now reigns. Yesterday, we discussed the troubles that beset America during the 1930s. Many of today's 'safety net' features were stitched up after that episode. Others have been added in the 6 decades that followed. So vast is the net, with so much spring and such fine weaving, that it is widely believed that a person can fall in almost any direction at almost any time and still not get hurt. This too - like being able to predict the future, or finding a decent tort lawyer - must represent some deep, fundamental affront to natural law. How could it be possible that people would borrow, invest, lend and spend recklessly - and suffer no damage? groups.yahoo.com * * *

To: russwinter who wrote (69049)	5/11/2001 11:48:34 AM
From: ild	Respond to of 116912

Today US$ is up a lot and POG holds very well. I think it's very bullish.