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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?


To: Ilaine who wrote (127504)7/26/2005 12:33:26 AM
From: Peter Dierks  Read Replies (1) | Respond to of 793745
 
Dumping bonds causes a contraction in money supply. It is the tool of choice used by the Fed. This is why I said that if China were to attack our currency by dumping bonds, it could cause a run on greenbacks. M1 would be in tight supply. Circulating more greenbacks would cause devaluation and inflation.