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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (15176)	3/20/1998 12:23:00 AM
From: Mitch Blevins	Respond to of 94695

>>M2 Bloat<< Although it has been available for a few years, more and more banks are now taking advantage of Reg D reclassification. Basically, if you have a checking account, they treat this as 2 accounts, one checking and one savings. You can't be considered a savings account unless you have 6 or fewer transactions per month. So, they crunch the numbers and report it such that you have as much money in your 'savings' account as possible without going over 6 transactions/month. The reason, for all of this accounting chicanery is because they don't have to keep money in the Reserve bank for savings, only for transactional accounts. Therefore, they want to maximize the amount of money that is considered non-transactional, and then they can buy Yahoo calls with that. This tends to skew the money mix from M1 to M2. ~Mitch

To: Bonnie Bear who wrote (15176)	3/20/1998 6:06:00 AM
From: Tommaso	Respond to of 94695

Yes, as you know, M3 is still cooking along at better than 10% annual increase. Funny, though, what a psychological thing inflation is. Government price controls can't stop it, but just a general willingness not to raise prices or wages can hold it back for a while.