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To: Glenn D. Rudolph who wrote (40000)2/14/1999 12:25:00 PM
From: IceShark  Read Replies (1) | Respond to of 164684
 
Please bear with me but where does the Fed get the cash to buy? Do they print it? They burn it when they take cash back in?

Glenn, To put it simply - yes. Although it isn't folding money obviously - just electronic entry. And they have been printing money at a furious rate and since there isn't enough productive places to use the new money it is flowing into the equity markets and inflating them. Obviously it is a bit more complicated, but that is the gist of it.

Regards, Ice



To: Glenn D. Rudolph who wrote (40000)2/14/1999 6:05:00 PM
From: Bill Harmond  Respond to of 164684
 
Exactly. They create and destroy credit.