On Sunday, November 16, 2008 at 11:40:22 (-0000) McDonough, Terrence writes: >[Bill Lear wrote] >>I'm curious what people here think about the claim that the >treasury department, by printing gobs of money, is responsible >in part for the current crisis. The claim is M-3 has gone >up 14% and 17% in each of the last two years, leading to p-e >ratios of 26-1 and a stock market inflated by almost 100%. >This seems like a rather shallow claim, but I'm not sure what >M-3 has to do with all of this. Anyone here care to refute >this? > >Also, what about the notion that Alan Greenspan pushed hard for an >interest rate reduction in order to get people to buy more houses that >led to the housing bubble? I find this dubious, and contrary to >what I've read. Any truth in this?< > >Its unlikely the Greenspan deliberately promoted a housing bubble >(bubbles are impossible in Greenspan's ideology anyway). But he did >massively lower interest rates to promote recovery from the 2001 >recession. Did he have any other option? This did subsequently >promote the housing bubble. The question this raises is whether the >current monetary loosening (also unavoidable) will make things worse >in the absence of really stringent financial regulation.
I understand that lowering interest rates is clearly not the same as increasing the money supply. What though, do you mean by "monetary loosening"? Do you mean only lowering of interest rates? Bill _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
