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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: Wayners who wrote (91131)	2/20/2014 12:47:16 PM
From: DuckTapeSunroof	Read Replies (2) \| Respond to of 103300

"As soon as the Federal Reserve buys something with the electrons it's in the economy." No, not really. For example if they buy MBS at a primary auction (from a Prime Bank) and the bank then turns around and just puts the cash right back to the Fed as a 'risk free' deposit then there is NO CREATION of money in the economy. And that's the kind of thing they are doing, just look at how much they have placed on deposit with the Federal Reserve! (Source: FRB (note that the bulk of "cash" assets are excess reserves held with the Fed) And, here's how you know the cash assets are unusually high... here's what they were ten years ago: Source: FRB (note that derivatives and trading assets were not tracked separately 10 years ago) Also... Loan-to-deposit ratio in the banking system hit a 35-year low recently. As you can clearly see, banks are storing their money 'risk free' by depositing at the Fed instead of making loans out in the real economy: