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To: Bob Tate who wrote (8903)	3/27/1998 2:26:00 AM
From: PaulM	Respond to of 116764

Probably. It also may be Wall Street has joined banking as a sheltered industry. Lately I've been thinking about "money supply," and it occured to me that stocks are practically as liquid today as M-1. A punch of a few keys on the net, and I have instant cash in a linked checking acccount. A few more keys, and I've made a purchase (or, if I like, written a check). From this perspective, our "money supply" has grown in ways not reflected in stats, and the Fed will assert its jurisiction accordingly. A high stock market is an excellent way of convincing people they have more than they do. This is more subtle than when money flows into goods, because folks already know the consumer inflation scam. Both types of inflation initially cause people to act in ways they otherwise would not during the "boom": to borrow more, spend more, hire more, retire early, and maybe take greater risk. Distortions in the real economy result. When consumer prices rise, or when less money than was expected is available to pay back the loan, or when the market tanks because the 401(k) ers are retiring and using it for living, people realize their misperception of reality. Their prior actions have now clearly been silly, and they must go bankrupt, fire their workers, and come out of retirement. "Bust"