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To: Ilaine who wrote (106124)	6/2/2001 2:48:41 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 436258

Exactly right, Cobie...the Fed has had little to do with the credit creation we've seen over the last 5 years. It's mainly outside the reserve system altogether. And despite the massive extension of debt and credit that's occurred, the Nasdaq crashed, the economy has slowed, unemployment has increased and the current accounts deficit swelled. The Fed COULD have raised concerns about the bubble (not the stock market bubble, but the credit market bubble), but they neglected their responisibility to do so. Note that one of the key drivers of the 1929 market bubble was a similar mechanism...increased credit creation by corporations and pools in the form of margin lending outside the reserve system.

To: Ilaine who wrote (106124)	6/2/2001 3:04:48 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 436258

CB - Do you perceive that increases in the money supply, credit creation, wealth effect, etc., release their toxins by any other path than reducing the purchasing power of money, or equivalently, inducing people to exchange more dollars for less goods? TIA, Don