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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (6527)	4/23/2008 8:28:23 PM
From: Real Man	Respond to of 71475

It's not a drain - 75 billion goes from one pocket (Balance sheet) to another (Term lending facility). If they did not do the drain, while they increased term lending facility, then currency in circulation would have to jump by 75 billion (the money comes off the printing press) Alternatively, if they drain 75 billion and don't put it elsewhere, currency in circulation would have to decrease by 75 billion. The latter would be a real drain -g- So, when the Fed's balance sheet fills up with crap, they will have no choice but to increase currency in circulation in order to keep doing what they are doing, i.e., prevent an overfill of the trash can. -g- Start the presses -g- They will probably sell securities held in custody for foreign central banks first to continue lending, but I'm not sure what their reaction would be -ggg-