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

To: ggersh who wrote (17064)	1/31/2009 6:39:23 PM
From: Real Man	Read Replies (1) \| Respond to of 71454

It's a monetary policy screw-up. They were meant to ease. Fed paying interest on reserves had the panic effect of these reserves moving higher like a rocket, inducing effective short-term tightening. This "adjusted monetary base" chart reflects mostly bank reserves with the Fed rocking higher by a trillion or so. This goes a long way to explain the rocking dollar and crashing markets. Here are tools of monetary policy, on tightening ... en.wikipedia.org There are several monetary policy tools available to achieve these ends: increasing interest rates by fiat; reducing the monetary base; and increasing reserve requirements. All have the effect of contracting the money supply; and, if reversed, expand the money supply.