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

To: ggersh who wrote (17058)	1/31/2009 4:33:52 PM
From: Real Man	Read Replies (1) \| Respond to of 71454

We've been seeing failure of real credit - Americans not paying debt cause they can't, and that's what sagging everyone. Insurers of that credit sink first, of course. The losses in real markets are huge, 10-s of Trillions. FWIW, the interesting part of that adjusted monetary base - it reflects that the Fed actually tightened A LOT in September, by screwing up. en.wikipedia.org "The credit crisis was exacerbated by Section 128 of the Emergency Economic Stabilization Act of 2008 which allowed the Federal Reserve System to pay interest on excess reserve requirement balances held on deposit from banks, removing the longstanding incentive for banks to extend credit instead of hoard cash on deposit with the Fed." One way to tighten is to raise rates, the other is to raise reserve requirements. By paying interest on reserves, banks piled up their cash at the Fed, actually tightening credit drastically. So, we saw immediate deflation and a surge of USD.