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Strategies & Market Trends : The coming US dollar crisis

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To: ggersh who wrote (29895)8/27/2010 7:04:41 PM
From: Real Man  Read Replies (3) of 71479
 
Worth a read. Banana Ben today.

federalreserve.gov

Policy Options for Further Easing

"Notwithstanding the fact that the policy rate is near its
zero lower bound, the Federal Reserve retains a number of
tools and strategies for providing additional stimulus. I will
focus here on three that have been part of recent staff
analyses and discussion at FOMC meetings: (1) conducting
additional purchases of longer-term securities, (2) modifying
the Committee's communication, and (3) reducing the interest
paid on excess reserves. I will also comment on a fourth
strategy, proposed by several economists--namely, that the
FOMC increase its inflation goals. "

...........

"In particular, the impact of securities purchases may depend
to some extent on the state of financial markets and the
economy; for example, such purchases seem likely to have their
largest effects during periods of economic and financial
stress, when markets are less liquid and term premiums are
unusually high. The possibility that securities purchases
would be most effective at times when they are most needed can
be viewed as a positive feature of this tool."
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