Monday, May 15, 2017

No model for seigniorage

“Tightening is Easing”Since U.S. monetary policy began tightening in December 2015, the Fed has added liquidity to the financial system through interest payments to banks on excess reserves and has reduced its surplus to m is that the senators do the Treasury adding to the fiscal deficit.  Thus the financial system has had an effective injection of central bank liquidity and a fiscal expansion during a period of monetary tighenting.
The senators keep 2.4T on loan, with barely any savings.  Ben used the 'make shit up' theory from MIT to justify the senators behavior.  But, the senators can never get back to a normal savings to loan ratio, they are too far gone done the road to default.   The central banker needs to hit the senators with a sudden interest charge, wake them up to the nightmare that they are.

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