To: PuddleGlum who wrote (48791 ) 11/11/2003 1:04:09 PM From: zonder Read Replies (1) | Respond to You are probably thinking of the chart of Fed credit growth. It increases fairly steadily up until the last few months of 1999, whereupon it SKYROCKETS - increases by about USD 100 bn to almost USD 650 bn, whereupon it falls right back in a couple of months. iht.com What worries Ms. Ghosh about the United States is a whopping increase in outstanding credit, notably money borrowed against the value of stock portfolios . The Federal Reserve Board, she said, ''has created an unstable credit boom. '' with Y2K out of the way, she expected the Fed to swiftly remove the liquidity from the financial system that it had allowed to build up out of Y2K-related fears. Little of the money that was added to the system last year has shown up in the most basic measure of money supply, M1, representing cash and instruments that can be easily concerted into cash, she noted. If you want to know where that money ended up, just look at the Nasdaq. M1 is stable, so the money that is being borrowed is going somewhere else, like the stock market ,'' she said. ''The link is pretty clear.''
