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To: Jeff Jordan who wrote (266104)	11/6/2003 10:08:59 AM
From: zonder	Respond to of 436258

I don't share your pessimism about the incomprehensibility/irrationality of the money supply. (I THINK that's what it was :-) Look here: research.stlouisfed.org My understanding is that the only reason why the market reached such valuations was that the liquidity kept increasing, that money had to go somewhere, and most of it obviously wouldn't go to negative real interest rates. So it came to the stock market. Now liquidity is not increasing but decreasing. If this trend is to continue, it could very well spell doom for the equity markets. The money in the system is enough given it goes to the people who will invest in hard assets not financial paper speculation I don't know what you mean here by "enough". By cutting off the gushing money supply, I think Fed is trying to steer the country away from a (very real) possibility of future inflation. "Enough" or "not enough" are not really concepts that apply, imho.