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Politics : Stockman Scott's Political Debate Porch
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To: pogbull who wrote (9765)11/25/2002 8:47:20 PM
From: BCherry168  Read Replies (1) of 89467
 
Roger Arnold says that Greenspan is buying ten year treasuries on the market. This is not likely to help, or change anything. He would buy them from banks, hoping that would increase bank reserves so they could lend more. But nobody is borrowing, except for the poor consumer.

What Greenspan was referring to instead was the FED's ability to buy treasuries directly from the US Government. This would increase the money supply without the necessity of anyone borrowing. This would be a direct increase of the money supply. This is what the FED did in the early years of WW II, thereby ending the Depression. They can do it again, and Greenspan is saying he will, if necessary. That would, of course, be inflationary. Big time.

"Dr. Greenspan has been repeating his promise to buy long term treasuries if the economy needs it. I addressed this in the past but am going to address again here." - Roger Arnold
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