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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (10052)	10/28/2002 9:53:17 PM
From: Bid Buster	Respond to of 57110

Or, who are they bailing out with this money pump?

To: mishedlo who wrote (10052)	10/28/2002 10:13:34 PM
From: Jorj X Mckie	Read Replies (2) \| Respond to of 57110

Tell me where my logic is wrong... -Inflating the money supply causes dollar devaluation -dollar devaluation will tend to cause selling in the stockmarket and buying in bonds -buying in bonds will cause a decrease in bond yields. -lower bond yields = lower interest rates -lower interest rates means increase of money supply (M2) -I know, I know, that money makes its way into the stockmarket and props it up....but eventually that stops working too. Considering that stocks rally on repos, isn't it kinda like getting a cash advance on your credit card to buy stocks and then the stocks lose value, but you still have the debt? So, they debt gets written off and the money goes to money heaven? Is that how this works? It seems like those potato chips that you can eat like crazy and not worry about getting fat because they have that stuff that makes it so you don't process the fat. And that is all well and good until you read the fine print where it says one of the effects is anal leakage. I never realized that Forbes was such an idiot.