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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (17059)	11/11/1998 9:22:00 AM
From: Zeev Hed	Respond to of 18056

Skeeter, in a deflationary environment liquidity dries up (and so often does the growth of the money supply), because investor run for safety into sovereign debt (and thus declining interest rates), failing businesses are unable service their debt or even default, causing banks to shut their own lending gates, unemployment increases causing consumer default (an economic "drive" we were not accustomed to in prior deflationary cycles, but quite sizeable today) all this dries sources of liquidity. Since the market requires a little "excess" liquidity to keep going up, the drying up of such sources could cause it to fall. Zeev