Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (1363)	5/15/2003 7:13:34 PM
From: pater tenebrarum	2 Recommendations Respond to of 4905

this demonstrates a point i made earlier: the Fed already proves powerless against liquidity preference. it can stuff the banking system with free reserves to the hilt (as Greenspan has done like no other Fed governor before him), but like the BoJ, it can't force anyone to buy stuff they don't need with money they don't have. it is this chart, inter alia, that has prompted the grudging 'admission' by the FOMC that what we have here smells like incipient deflation. note that the deflation wouldn't be 'bad' (we all know probably of the tortured definitions designating some types of deflation as 'bad' and other types as 'good'). a true deflation of the money supply, if and when it should occur, simply means that money previously created out of thin air is going back whence it came....and the activities that sprang up on the back of it, go there as well, since they are by definition uneconomic. the result of exchanging something for nothing.