The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: bart13 who wrote (74170)	11/16/2006 1:22:40 AM
From: bond_bubble	Read Replies (2) of 110194

The Fed is in the game of helping out the banks and credit games is the simplest answer - not sure what you're driving at... Most of the money multiplication takes place inside the banking system, depending on how you define money. Bart, you are completely wrong. Most of the credit supply is completely outside the Fed banking system. The GSEs, Financial institutions (wall street) are all outside of Fed Reserve and they are the supplier of credit today. They do not have any reserve requirement!! And Fed can NOT set the reserves they need to hold!! Ofcourse, Fed has lot control of credit supply a long time ago. You are wrongly thinking that Fed is controlling and hence helping the credit growth. It is not. Reserves dont matter any more.

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