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To: Sergio H who wrote (8809)	5/20/2001 5:29:27 PM
From: Jibacoa	Respond to of 13094

<<Question for you and Jim; any opinion on this stat?>> Sergio: Look at some previous comments, back in March.<g>: The thing to watch is how uncle Al handles the monetary base. Message 15545532 I guess uncle Al better turns the spigot of the monetary base wide open.<g> siliconinvestor.com If the 3 months T-bill would get significantly higher than the discount rate, the banks could borrow all they could for a guaranteed profit. That is the reason the FED can not let the two rates get too much out of line, and why the FED just follows the 3 months T-bill. It is the rate of growth of the monetary base what ultimately influences or determines interest rates,inflation, the price of gold, exchange rates,etc. Message 15551321 RAGL Bernard

To: Sergio H who wrote (8809)	5/21/2001 1:37:02 PM
From: James Strauss	Read Replies (2) \| Respond to of 13094

Sergio: I updated the M2 chart for only 2000 and 2001... economagic.com Note the steep rise in M2 while the market was tanking... This flies in the face of the theory that huge liquidity is good for markets... What do I get from this? We had an overpriced market and an end to an economic cycle... No amount of liquidity was going to get companies to buy more equipment when they didn't need anymore... This can be related to the current rate cut cycle... Will lower rates sell more of your products if your customers are up to their necks in inventory? That remains to be seen... In the meantime, the market is looking out 6 months or more and sees supply and demand coming into balance... siliconinvestor.com Jim