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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (36314)	7/19/2005 1:45:34 PM
From: philv	Respond to of 110194

Not to beat this thing to death, but I suppose other things could affect the POG such as new supply and population growth, hoarding, etc.

To: Tommaso who wrote (36314)	7/19/2005 2:15:52 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

"I don't understand the money supply figures for the last two years. They seem quite disciplined, yet the expansion of credit via mortgages and refinancing mortgages has been huge." That is part of the conundrum especially when you add in what is now a flat yield curve and yet even more money is awash out there looking for someplace to land be it long term treasuries, mortgage backed securities or speculating in bubble market housing.

To: Tommaso who wrote (36314)	7/19/2005 4:05:24 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

You have observed a counting error. The expansion of the "Money Supply" has been growing far faster than the economy, and far faster than is reflected in the "Money Supply" figures. I don't understand the money supply figures for the last two years. They seem quite disciplined, yet the expansion of credit via mortgages and refinancing mortgages has been huge. New money creation for large mortgages is reflected in the "money supply" until it is spent outside the U.S. economy. An example would be a Home Equity Loan which is spent at Wal-Mart for goods purchased from China. M3 includes some offshore U.S. Dollars in a category called "Euro Dollars", but many offshore U.S. Dollars are not included. .