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To: Curlton Latts who wrote (40144)2/15/1999 2:34:00 AM
From: Bill Harmond  Respond to of 164684
 
>>Or perhaps you disagree about how money supply is increased.

Dusting off my memory, the Fed increases credit (thereby increasing the money supply) by lowering bank reserve requirements, lowering the discount rate (those two encourage lending but that takes time), or (most directly) by buying-in domestic treasury securities in the open market.

The Japanese are using steps 1 & 2 right now, but the US is all over them to use step 3.