Saturday, April 9, 2011

It's not really the central banker

"What the central bank does is set the nominal rate of interest, and so when the nominal rate of interest hits zero, it can do no more"? Nick Rowe complaining about the lazy government banker
That banker is the Washington DC, Congressional, New York fed banker, a different sort of central banker. The banker has many restrictions. It is not allowed to participate in the printing of private silver coins, not allowed to hold Bitcoins, must pay attention to its largest customer, cannot allow the SF Fed any powers of money creation, and has to hold the hand of foreign investors who get sucked into Timmy's  banking network.

With those restrictions the banker causes more skew after the magic than before. So here in California, with each new magic, we are relatively worse off.

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