Stockman Scott's Political Debate Porch Message Board

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Politics : Stockman Scott's Political Debate Porch

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To: Sidney Reilly who wrote (3182)	7/24/2002 11:10:07 PM
From: Jim Willie CB	Read Replies (2) of 89467

Fed has a few tools to add to money supply they do just what that guy said they buy Trez securities, adding money into system this also lowers rates if done on large scale it can be refunding of existing bonds or purchase of expiring bonds at maturity other methods can add to money supply they can lower the depository ratio requirements for member regional banks (their main job is to oversee the regionals) this allows those banks to lend more compared to the underlying leveraged reserves they can also simply jawbone the regional banks to lend more for the marginal decisions recently, member regionals have withheld and denied loans they can also add to money supply by serving as an intermediary for foreign central banks as in Japan or Germany or England wishing to strengthen the USdollar by buying TrezBonds thus weakening their own currency, assisting export pricing so the Fed is the agent, and foreign CB's buy TBonds thus our money supply is enhanced it can get complicated when gold lease/sales are introduced the Fed holds gold for foreign CB's in large quantities but you get the idea it is important to realize that the Fed creates money out of nothing suddenly the Fed has $B's out of nowhere, thin air they can then buy bonds heck, they sometimes even buy S&P baskets of stocks I find it remarkable that the Fed actions strongly resemble the Enron accounting so heavily criticized these techniques to enhance money supply are standard tools their abuse makes me want to puke we are slowly destroying America's capitalist system after 2-3 generations, trouble brews from too much debt everywhere the cost of servicing it becomes too big like Enron, the US economy craters from debt it takes a long time, like 40-60 years but time might be nigh / jim

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