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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (58076)	4/29/1999 10:58:00 AM
From: Tommaso	Read Replies (1) \| Respond to of 132070

But down at the bottom it's the Fed's control of fundamental liquidity that makes possible the credit bubble that feeds into the equity bubble (and of course real estate as well). Credit growth is the next outward stage from money supply increase, so of course one can look at credit and see that as causing the stock bubble--and it is certainly doing that. I guess one could get even more fundamental and consider the psychology of government. Nowadays money is valuable purely for psychological reasons, not being linked to any tangible substance. It has artificial scarcity value. The government has the power to make pieces of paper hard to get or easy to get, and if there's a will towards scarcity, that can prevail. More often, governments simply inflate--it's so easy.