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To: Gregg Powers who wrote (13166)	7/31/1998 9:55:00 AM
From: Jon Koplik	Read Replies (1) \| Respond to of 152472

Gregg - sorry, but I just do not want to get into this money supply stuff. I don't think anyone understands this stuff. Jon.

To: Gregg Powers who wrote (13166)	7/31/1998 10:13:00 AM
From: Drew Williams	Read Replies (1) \| Respond to of 152472

Gregg, I must admit that my eyes glaze over very quickly when people talk about technical indicators like the various money supply numbers. However, I am certain that the numbers do not mean what they say, because at least some of the underlying assumptions are no longer valid -- if they ever were. The most obvious is the American savings rate. I -- and everybody I know -- do not have any significant money languishing in the bank. It is all invested somewhere. The savings figures do not -- can not -- take that into account. Remember: lies, damn lies, and statistics.

To: Gregg Powers who wrote (13166)	7/31/1998 11:33:00 AM
From: mozek	Read Replies (3) \| Respond to of 152472

Gregg, First, thanks for your well researched, incredibly informative posts on the Q. I think the problem with "potential money supply" is that financial asset inflation doesn't actually increase money supply, even potentially. In fact, the more stock certificates we convert into cash, the less cash there is readily available for continued conversion. At no time are we required to have enough cash available to convert the NAV of the stock market. In fact, small amounts of unbalanced changes in the conversion process can result in large fluctuations in the NAV of the whole market. I believe that an increase or decrease in the money supply creates a a propensity for these unbalanced changes. In a way, it seems that equity prices are a derivative of the money supply. Of course, the function of that derivative includes human factors and responses to economic conditions and indicators. Thanks, Mike