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: maceng2 who wrote (2757)	6/26/2003 9:11:31 PM
From: maceng2	Read Replies (1) \| Respond to of 4905

OK, I think I see the point being argued.. Message 19065061 So, as an accountant, you can say with a 100% accuracy that Fanny and Freddie do not create money. That is only looking at these government backed institutions by themselves though, without interaction with the rest of the economy. In terms of balance sheets, no they do not create any extra money, not a single cent. I look at finance slightly differently though, as a process, like for example a chemical reaction inside a closed container. Therefore I am considering the interaction of Freddie and Fannie in the wider context. In that process, lots of extra money has been generated by the government and by the fractional banking system, and both Freddie and Fannie use those funds copiously as they are spread throughout the economy. Therefore I would argue that they are indirect agents in creating an increased amount of money in the system. /edit. i.e. Fanny and Freddie are a mechanism where lots of fractional banking created dollars end up being pumped into the property market. Am I making sense here? or deluding myself that I think I understand whats going on -g-