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To: DaveMG who wrote (16191)	10/8/1998 1:07:00 PM
From: dougjn	Read Replies (1) \| Respond to of 152472

Greenspan was pumping out lots of bucks during the past four or five years. Monatarists say try to keep the money supply constant, or rather, growing at a constant rate. The trouble is that doesn't work. Money is influenced by its velocity as well as by its quantity. Further, foreigners have shown a ravenous appetite for U.S. money in a variety of forms. There are now actually a great many more $100 bills circulating outside the U.S. than there are inside it. (Including in places like Russia, Indonesia, etc.) U.S. treasuries are the predominate store of value in most foreign central banks, and in many company treasuries, and individual rainy day funds -- in foreign countries. If they were sucking all this money out of the country and the Fed wasn't supplying more, we would have long ago had a huge deflation in this country. So what Greenspan guides himself by is the inflation rate. More Demo Fed governors primarily guide themselves by avoiding recessions or even pronounced slowdowns. This is the pain time in the conervative approach. Rising inflation (probably a worse pain, overall) is the cost of the liberal approach, that we had from the late sixties until Greenspan. Doug