Originally posted by rogue06
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"I am not angered that the Moral Majority boys campaign against abortion. I am angry when the same men who say, "Save OUR children" bellow "Build more and bigger bombers." That's right! Blast the children in other nations into eternity, or limbless misery as they lay crippled from "OUR" bombers! This does not jell." - Leonard Ravenhill
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Reserve requirement ratios are now zero. Banks can now print at will.Remember that you are dust and to dust you shall return.
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Originally posted by demi-conservative View PostReserve requirement ratios are now zero. Banks can now print at will.
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For the unaware:
Going back in all of history, banks have been required to hold reserves against their assets - which are loans and securities. It’s simple – banks set aside a percentage of their assets as reserve and kept it in gold (for most of recorded history) or as cash at the Federal Reserve. This is a fundamental pillar of fractional reserve banking. Conceptually, the reserve gives depositors confidence that when they show up to take their money back, there will be cash to give them. It hasn’t always been nearly enough and if depositors get wary, they “run” to the bank to withdraw their money. Please re-watch “It’s a wonderful Life’ to see what happens during a bank run. It’s not pretty. It hasn’t just happened in black and white either. There were runs in 2007 and 2008 as depositors feared for their funds at several banks.
During the over 100+ years of Fed history, they have mandated the bank reserve ratio. Manipulation of the reserve requirement ratio has been one of their most powerful tools. That ratio was north of 20% through most of the first fifty years of the Fed (including the great depression). It had made its way down to 10% - that was before today. Until further clarification or notice, banks need not hold any reserve against their assets. This means that banks could theoretically continue making loans to infinity.Remember that you are dust and to dust you shall return.
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Federal Reserve holdings.
US treasuries (federal bonds): About $650 billion increase since the first of this year.
Total assets (federal bonds, state bonds, corporate bonds -- i.e. derivatives): About 1$ trillion increase since the first of this year.
Don't confuse the latter with a trillion a day loans they're using to keep the repo market liquid. The chart represents regular QE (to infinity). My guess is they will easily hit $10 TRILLION total assets by the years end, and the graph will look like a reverse L.
To put perspective on that, their balance sheet of total assets was less than ONE MILLION in 2008.
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Originally posted by seanD View PostFederal Reserve holdings.
US treasuries (federal bonds): About $650 billion increase since the first of this year.
Total assets (federal bonds, state bonds, corporate bonds -- i.e. derivatives): About 1$ trillion increase since the first of this year.
Don't confuse the latter with a trillion a day loans they're using to keep the repo market liquid. The chart represents regular QE (to infinity). My guess is they will easily hit $10 TRILLION total assets by the years end, and the graph will look like a reverse L.
To put perspective on that, their balance sheet of total assets was less than ONE MILLION in 2008.
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