OK. Heres a question. The Federal reserve prints money. If it prints too much money the money becomes inflated. Thats bad.

The price of stocks in the stock market is governed by what people think a stock is worth. Greater Fool Principle and all that. So, if a wide spread perception of stocks being worth less starts to spread, specifically from watching a correction, then money (in its electronic form I guess) starts to disappear.

Does this mean that the Fed could bail out the stock market indefinitely (if it wanted to) by printing money and buy stocks (perhaps through proxies)? If not, why not?

For this scheme to work, what organizations or people would have to cooperate?

What could be accomplished by doing this? One thing that comes to mind is propping up a president and his administration. Another capability seems to be the ability to transfer large amounts of wealth. Assuming this could be pulled off, are those examples accurate? What else could be accomplished?

Perhaps we can build a perpetual motion machine after all.

I am not saying that this is happening. I just want to know if it is possible, and if so, under what circumstances.

Watch six and keep your...

-- eyes_open (best@wishes.2all), April 25, 2000