I have no clue howmany of you might be interested in this issue, but ... this is a good article for those who ARE intersted!    I have posted only a portion of it.  The entire article may be found HERE

The stock market rose sharply on the final day of February and the first Monday in March. Here's why:

http://www.stls.frb.org/docs/publications/usfd/page2.pdf (Note: charts from the St. Louis Fed are constantly being revised, but their Web addresses remain constant. All charts for this essay are dated before March 5, 2002.)

The Federal Reserve System is now pumping in new money at over 20% per annum. The St. Louis FED tracks the adjusted monetary base (AMB), which is the one monetary component that the FED's Open Market Committee can control. This is the statistic of the actual holdings of monetary reserve assets by the FED. Milton Friedman calls this "high-powered money" because it serves as the base for all of the other market-generated monetary units.

Because this is the one monetary component that the FED can control directly, this figure is the best indicator of what the FED's monetary policy is. The other monetary figures are the results of money-holders' allocation of assets into or out of the banking system.

The St. Louis FED not only graphs the AMB figure, it provides the numerical rate of growth in the box beneath the chart. Since December 26, the increase has been 20.3% on an annual basis. Since late February, 2001, it has been 9.7%. Since July 25 – before 9/11 – it has been 13.3%

There is no doubt that the FED is in full-scale inflationary mode. It is not just in double-digit mode, but 20%. I will be surprised if it stays this high for very long, but it is clear that Greenspan is willing to keep the rate above 10%.

I don't think Greenspan has increased the money growth rate to 20% in order to give a boost to the U.S. stock market. The stock market was not falling sharply, although it was heading down. He is concerned about the overall economy. He gets blamed for recession. We were in a recession last year, contrary to the financial press at the time. He has inflated us out of it. The manufacturing sector of the economy is at last positive, as reported the National Association of Purchasing Managers (now called ISM). But manufacturing employment continued to fall. ...............

Only one area of the economy stayed positive: housing starts/home sales. Here is the heaviest debt load for consumers. Housing is basically a long-term consumer good, heavily funded by mortgages. So, consumers have remained optimistic, long-term, but their employers have grown pessimistic at least with respect to the short term.

Consumers believe that the housing market will always rise. They think, "buy now, pay later." They think, "I can lock in low-interest fixed mortgage money today, and I'll pay it off with depreciated dollars." This strategy has worked ever since 1946.

The credit markets are supplying this money to borrowers. The mortgage market is presumed to be secured by the U.S. government, so Fannie Mae and Freddie Mac keeps making available mortgage money to borrowers. These enterprises are called GSE's or Government Sponsored Enterprises.

If mortgage holders think they can win at the expense of mortgage-issuers, why do people continue to put their money into pools of long-term mortgages? Because they think these pools of capital are government-guaranteed. They are looking for high returns short-term. They figure they can sell off their holdings later if rates climb. They think they can protect themselves against both default (because of a supposed government guarantee) and interest-rate risk (by selling to new buyers if rates go up). They assume that their investment will be liquid forever. .........................

I hope someone finds this helpful ...