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To: Andy Thomas who wrote (247286)	6/26/2003 1:21:46 PM
From: Perspective	Read Replies (2) \| Respond to of 436258

I think that's basically why interest rates have a zero lower bound - because loan demand would push to infinity if rates go at all below zero due to all the immediate demand for the simple carry trade suggested. Of course, a zero Funds rate doesn't mean zero interest rates; so as long as there are non-zero rates elsewhere to be messed with (bonds, corporates), the Fed will try to figure out a way to interfere with the market there as well. I read yesterday that they are backpedalling a little on their "we'll buy bonds to peg long-term rates if we have to" - the Bernanke put. Maybe wising up just a little? One or two of them have a conscience, or perhaps grandchildren they're worried for? BC