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Okay. I agree that what the Fed is doing is not making it happen, inflation. But where is all of this additional money going ?

We do see it in the housing bubble but I would caution to quess that this one market is not going to suck up all of the newly available money.

So what is ?

New cars, new or better computers are not. It's not TV's or DVD's. It's not more vacations. And in fact all of this is the sign that the Fed's inflation plan is grossly not working.

"Okay. I agree that what the Fed is doing is not making it happen, inflation. But where is all of this additional money going ? We do see it in the housing bubble but I would caution to quess that this one market is not going to suck up all of the newly available money. So what is ?"

Direct answer is very simple--bank reserves; maybe to a lesser degree bonds, bond funds, and money markets--which is why (in the case of bonds and funds) long bond interest rates are going down--people are buying them.

There really isn't much additional money.

Further, my own view of the data is that personal use real estate financings are not going up a lot either. Purchase and sale financing is off because sales are also off; refi's are down because that market got saturated--everybody who was going to refi did it. If rates went down further, you might see more refi's but the cash out equity people have by and large stopped.

The retail season will end in the tank; the stocks are headed for the tank; just about everything is going to roll over in Q1 of 2003.

New cars, new or better computers are not. It's not TV's or DVD's. It's not more vacations.

I agree. I think 911 still has a lot to do with it. I know that I personally think it is more important than ever to pay down my debt and get financially secure, to the extent that that's possible. And I HAVE a new car, my old computer still surfs the net just fine, and I moved to a less expensive (and smaller) apartment to help pay down debt. I could care less about cable TV, broadband internet access, making long distance calls. I will probably cancel my cell phone soon because I don't really need it. I take short vacations by car since I don't wish to be strip-searched at the airport, and I visit and stay with family.

I am becoming a cloth-coat republican and I'd venture a guess that there are a lot of us on this site. I voted a straight republican ticket for the first time this time and helped the Republicans make their unprecedented gains.

I sense that in many ways I am everyman.