I need to reiterate that Federal Reserve Open Market Operations is by far the most interactive tool that the FED has and is the Most powerful Ability of the FED.
The FED could add a Trillion or 3 Trillion dollars of Liquidity to the Global Economy by purchasing Treasuries, Mortgage backed securities, CDO's and other instruments. And I would like for anyone to show me where there is an external audit process for that. I don't mean to hold your feet to the fire, but since you've raised the response.
I would really like a counterpoint on this. I'm curious who on this thread does not feel that on a week to week basis the FED Open Market operations are the most powerful way to adjust the monetary basea and aggregates... and add or drain liquidity. Abd then raising or lowering the Fed Funds rate dovetailes into the ability to increase or decrease the Primary market dealers cost of capital... which then spreads out to the other banks and the economy as a whole.
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looking at the balance sheet that you presented
Memo (off-balance-sheet items):
Marketable securities held in custody for foreign
official and international accounts(2,7) 2,168,498 + 17,282 + 292,643 2,173,695
U.S. Treasury 1,280,342 + 2,645 + 62,914 1,278,331
Federal agency 888,156 + 14,637 + 229,729 895,364
Securities lent to dealers 12,228 + 589 + 10,581 9,890
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the FED's off balance sheet items of 1.278 trillion of US Treasuries plus their assets owned of 895 bilion Federal Agency securities that they own dwarfs the 915 billion that they have on their balance sheet.
If anyone here has a semi-plausible analysis of what differentiates the US treasuries held on the books in an off the balance sheet manner compared to securities held outright of 676.8 Billion, I'd love to hear the analysis. I don't mean to be contentious, but...... I find the further down the road I get with someone regarding central banking ..... and it appears to me that John Bogle is not even considering The Central Banks off balance sheet abilities when he comes up with his magic number of 850 plus billion.
I really wonder about how many people really understand the actual history and development of Central banks and the ownership of the stock in these institutions. I'd advise everyone to go look at the Netherlands in 1609 AD and the development of The Amsterdamsche Wisselbank or Bank of Amsterdam an early commercial bank, vouched for by the city of Amsterdam,
John |
