Thread: The Fed......
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Old August 04, 2019, 16:23   #3
bubbagump
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Quote:
Originally Posted by Exit308 View Post
has supposedly been shrinking its balance sheet in what they have called Quantitative Tightening.

We know that the fractional reserve system is basically a 'Ponzi' scheme that requires an ever expanding base to cover the principal and interest.

We also know that the numbers in the debt market are becoming exponential in a world of finite resources and productivity.

Do they really expect us to believe that they are allowing their balance sheet to shrink?

And since I don't believe this, where are they hiding the FRNs(digits)?

Please discuss.
Quantitative tightening is simply the flip side of quantitative easing, which is a wooly way of saying low interest rates. It's no secret that the Fed has been raising rates, now they've conceded that they probably raised them too much/too early and want to add more money into the system. It's what central banks do, they are supposed to adjust the money supply. It's one of the tools they have, possibly the most important one to adjust for the ups and downs of the economy.

Whether they're right or wrong in this is hard to say, I've seen good arguments on both sides of this question.

Fractional reserve lending is a key component of the FedRes model certainly. Not sure if there's a question here.

As to whether their balance sheet is shrinking, well almost certainly not. But higher interest rates would presumably result in it not growing at a rate that lower interest rates would support. In any case, impossible to say as there are no audits of their books.

As to the FRNs and where are they hiding 'em? Why, all around you. Or did I misunderstand the question? Are you asking where the digital money is?

Quote:
Originally Posted by Bawana jim View Post
I am not smart enough to give you the answer you seek but I will voice an opinion. Numbers and accountability for numbers just don't seem to matter anymore. Congress never makes out a real budget and puts us trillions in debt. The Fed established the cost to borrow money printed up from nothing and the world runs on that money because there is nowhere else to go.
Well there ARE plenty of other places to go. The thing is you don't really believe they are all that and a bag of chips either. Very likely because they aren't, regardless of what the hucksters would have you believe.
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