The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: RJA_ who wrote (27250)	3/2/2010 7:16:12 PM
From: Real Man	Read Replies (2) of 71475

The base is a strange beast, it includes both bank reserves and printing. The buildup of reserves component in the base is actually deflationary, since it corresponds to the money that otherwise would have been lent out and is thus extracted from the economy. This is effective tightening, which the Fed could technically induce by requiring banks to keep more reserves. Overall, a decline of M3 reflects the influence of ongoing deflationary debt defaults as the banking crisis continues. Bank failures generally last up to 5 years after the crisis. As for James Turk's piece, who knows. Yes, the Fed's action has been unprecedented when measured by what they do report. As for what they don't report, oh well... Their balance sheet is sure full of garbage that keeps defaulting. It is difficult or impossible to tell how much they are monetizing under the radar (off record), but I bet it is an ongoing process.

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