Thursday, June 29, 2017

Market liquidity?

Market Liquidity after the Financial Crisis

Researchers at the NY Fed looking at liquidity.

Inn the sandbox, liquidity means your secure element can easily drop or pick up some secure digits from the local S&L site. You are illiquid if the site is jammed and fees up.  If you are typically illiquid then you keep a lot of secure digits right there, on your card; but it may not be earning even money.

In this article they talk liquidity in the older style sandbox, but still use the basket brigade theory of economics.  I have a simple theory, government took the available liquidity at the Fed, and Janet is giving some of that back to the member banks.  She raises the IOR and government pays higher interest charges, banks earn high interest charges.  Overall economic interest charges are very high, to high for us to pay. Government is getting a 600 billion interest payment each year, and that is likely to go up.  20% of the federal budget.

No comments: