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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Box-By-The-Riviera™ who wrote (43661)	12/5/2000 9:18:09 AM
From: Mike M2	Read Replies (1) of 436258

Benjamin Anderson wrote "To be sure the New York Fed had raised the discount rate from 5% to 6% on Aug 9, 1929. But this was symbolic merely, as it represented a compromise. The other side, and the really important side, of this compromise was that the Federal Reserve buying rate for prime bankers acceptances was reduced on the same day from 5 1/4% to 5 1/8%. As the open market rate for acceptances was 5 1/8% at this time, this pulled down the Federal Reserve rate to the level of the market and opened up the Federal Reserve banks to acceptances at the pleasure of the market. Following this there was an increase in acceptances held by Federal Reserve banks from $72 million on july 31 to $275 million on September 30, which meant a relief to member bank reserves sufficient to ease the money market. The call loan rate dropped from 9.6% on Aug. 10 to 6.2% on Oct. 12. Stock exchange time loans eased from 8.88% on Aug. 10 to 7.75% on Oct. 19 " from Benjamin Anderson's " Economics and the Public Welfare" p. 215 In reality the Fed had eased money market conditions by replenishing bank reserves. Mike ho ho ho

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