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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Lone Ranger who wrote (2490)	5/12/2003 6:13:20 PM
From: 2sigma	Respond to of 10065

Let me see, how does this work?... Stimulative monetary policy creates dollars in circulation and with limited new production of good and services, this creates an inflationary effect Stimulative fiscal policy creates dollars in people's pockets so they can spend it which creates a drawdown on inventory and possibly causes new production. The declining dollar creates increasing foreign demand for USA made products. It also causes domestic manufacturers to raise prices to keep pricing parity with foreign importers whose goods are more expensive because of our relatively weak dollar. Unless of courses domestic manufacturers want to capture market share so they use undercut pricing. Is there more? Haps.