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Gold/Mining/Energy : Gold Price Monitor
GDXJ 97.81+0.9%Nov 19 4:00 PM EST
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To: IngotWeTrust who wrote (45832)12/9/1999 3:45:00 PM
From: Alex  Read Replies (2) of 116762
 
New Year's confetti - "In the United States, preparations for the millennium festivities have taken the curious form of massive credit creation. The Federal Reserve has been buying government securities at a rate that used to be called inflationary. Nothing like this extraordinary pace of money printing is in evidence at either the Bank of Japan or the European Central Bank (although growth in the BoJ's balance sheet has recently accelerated). Evidently, Y2K is happening only in America. Terms of discussion of U.S. monetary policy these days center on the rhetoric of stringency rather than the deeds of accommodation. The fact is the Fed continues to make credit easier. It has expanded the list of collateral eligible for discount and created a Special Liquidity Facility (which does not expire until April 7, 2000). In a stroke of ingenuity, it has sold hundreds of billions of dollars of 'liquidity options.' The options confer on a purchasing institution the right to access, during defined five-day periods around the new year, cash from the Fed at a 'strike' price 150 basis points over the federal funds rate. Perhaps most significantly, our central bank has stepped up its purchases of Treasurys. Since the September 1 balance sheet date, it has added more than $30 billion to its temporary securities holdings via an increase in term repurchase agreements. Over the past 12 months, the Bank of Alan Greenspan has expanded its balance sheet by almost 13%." [ Continue ]

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