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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 374.22

-0.2%

Nov 21 4:00 PM EST

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Maurice Winn

To: Maurice Winn who wrote (114728)	12/13/2015 1:10:06 PM
From: Elroy Jetson	1 Recommendation of 217917

Those two "different actions", setting a rate and "QE", are exactly the same thing. The Fed Open Market Committee sets a "target Fed Funds Rate" then proceeds to buy or sell debt assets in order to make that rate happen. What people have referred to as "Quantitative Easing" was merely the unusual lengths to which central banks had to go to in order to achieve extremely low rates. If a central bank set a interest rate without buying or selling debt securities, it would have all the effect of King Canute commanding the tide to recede. There's a separate, and little used, facility called the Fed Discount Window which lends to banks in short-term trouble which people often confuse for the primary function of the Fed. Some have even been taught at schools that the Fed Funds Rate is set by what the interest rates the Fed sets at the Discount Window, which is merely an indication that the textbook writers and professors at those schools have never been acquainted with the real central bank.

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