Huh? 1.75 Trillion was not temporary.
Temporary has been closed for almost two years. That means FED has been OUT OF BUSINESS. FED conducts its normal operations through Temporary.
It was created by the Fed out of thin air to buy Treasuries, MBS, and Agencies.
You should look at it this way: Use T accounts. FED buys x and simultaneously credits and debits its T account for the entity. Then, later, the reverse is engaged where the Taccount is simultaneously debited and credited. The net? Zed. Nothing net created and nothing net destroyed. Rather clean, I'd say.
These were all permanent operations, Quantitative Easing,
or, electronic printing in lame language, and were listed at the Fed as
such.
The only Permanent done which you can check in the Permanent record at NY Fed was $300 B in coups. This created reserves which are sloshing around almost at full strength in bank vaults, as it were.
Check the Fed page and minutes. You completely missed it.
Did you know I helped to craft that presentation? I used to be important but now i'm talking to the unwashed.
I suggest August 2009 minutes where the operations are listed.
I also suggest to look up Quantitative Easing on Wikipedia.
Before whomever wrote that article for wiki was born I was already well kown at the Bank. I know the machinery better than Bernanke, AG, and Volcker. If you only knew...
Now-now, they have been TALKING it was temporary, they CLAIMED they will shove the amount back into the printing press, but
so far it has not happened.
Temporary, that is, temporary operations where buys and sells usually with RPs to primary dealers in the bond market is closed and has been closed for almost two years. If you go to the temporary menu on the Ny Fed site you can confirm this for yourself. If you don't want to do that, just check the ff rate. I mean how can FED fix rates at zero? There's nothing to fix. That means no marginal demand for short term money among banks and other depository institutions.
You can keep the faith it will, but I won't share that faith. Until that time the operations are permanent.
Nope. You're making a major mistake here. There are no permanent operations. FED discontinued that months ago, closed its MBS asset purchase a month ago, and now is sitting on its hands hoping to get back in control by opening Temporary. I mean, what's a CB to do if it can't control people? |
