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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 366.09-0.1%Nov 6 4:00 PM EST

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To: Cogito Ergo Sum who wrote (44935)1/7/2009 7:11:58 PM
From: TobagoJack  Read Replies (2) of 217553
 
exciting stuff academyfinance.ch , the re-run of experiments from eons past

“Looking at the bigger picture, America has embarked on one of the great experiments in the history of monetary economics. We are testing the notion that the size of a central bank’s balance sheet matters more to the economy than the overnight interest rate that balance sheet produces in money markets. The hope is that this experiment will stabilize asset prices, reduce credit spreads, and boost the economy.”

The American: Fed’s Big Experiment,
Vincent R. Reinhart, AEI, November 4, 2008

.... Let me put into perspective a Fed balance sheet of $3 trillion by year end, up from $900 billion in August. That is a rise in the Fed’s balance sheet from 6% of GDP to more than 20% of GDP in four months. In Japan, known for its quantitative easing, the central banks’ balance sheet rose progressively from 9% of GDP to 29% of GDP from 1994 to 2004. At the current U.S. pace, the Fed might do in six months what it took 10 years to do in Japan.
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