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Fed lends approx. $1,000,000,000,000 last week alone.

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Has someone one of these nice updated charts on their balance sheet? Has it just doubled, or what??

 

http://www.reuters.com/article/ousiv/idUSTRE48O9B920080925

Fed keeps banks afloat as money market crisis deepens

 

NEW YORK/LONDON (Reuters) - U.S. banks and money managers borrowed a record amount from the Federal Reserve in the latest week, nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat amid the biggest financial crisis since the Great Depression.

...

"It is stunning how much you see the Fed extending credit all over the place," Feroli said.

 

"Every facility got used to a large degree, the ABCP facility, the AIG loan, the Primary Dealer Credit Facility and the good old discount window," he said.

 

"Everywhere you see huge amounts of reserves being put into the system," Feroli said.

Hyper.

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Has someone one of these nice updated charts on their balance sheet? Has it just doubled, or what??

 

http://www.reuters.com/article/ousiv/idUSTRE48O9B920080925

 

I heard that figure on the media... thought I must have heard wrong and went to wash my ears out. :lol:

 

Here they are haggling about 700 billion with Congress and 188 billion is being dished out EVERY DAY? :blink:

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this is deflationary....right. ;)

 

sshhh, I don't think romans holiday heard me....

 

1] yep, the billions will be swallowed up by the deflationary black hole.

 

2] the accumulated debt will massively devalue the dollar.

 

ergo, MASSIVE inflation in prices [this is where the deflationists will wake up one morning to the economic equivalent of the rapture]

 

The inflationary position will win out in the end. Wouldn't wanna be in cash.

Just my opinion... couldn't resist. :)

 

 

Posted this elsewhere in response to a cogent case made out for deflation and "cash is king".

 

Inflation or Deflation

 

Though I agree with nearly everything written here, I think we will have NEITHER inflation nor deflation as conventionally thought of. The problem is that both inflation and deflation have become separate schools of thought, yet they both offer valid insights.

 

The inflation school focuses on the money supply, yet often neglects to look at both the supply of money and credit. The mess we are in now has arisen from the Greenspan years of cheap money and credit leading to over-inflated house prices. We have already had inflation [in asset prices] in the boom and now we are seeing the deflationary bust. The inflationists are right to be concerned about the huge reservoirs of money both abroad and domestically. However, the deflationists are right to point out that the velocity of money is extremely low and virtually frozen which is keeping inflation in check.

 

Inflationists are now pointing at the Paulson Plan. Paulson has in his sights the frozen credit markets and he believes that if only Congress gives him an even bigger bazooka he will be able to get the money markets up and running again. Even if Congess agrees and gives him his bazooka, it may, in reality, turn out to be a water pistol and have no effect on normalizing these markets.

 

The bigger picture is undoubtedly a deflationary bust as all over-valued paper assets deflate. However, there may be a wild card for the deflation school this time round which is why I distance myself from the deflation camp. Deflationists tend to take the position that “cash is king” but this may be deeply problematic. The wild card is a possible sharp devaluation of the dollar/pound. As the debt imbalances build up in the currency and the creditor nations start to lose confidence in it, there is a very real chance the dollar itself could deflate. If this happened, asset prices such as houses are likely to stop falling and reverse upwards. Those left holding dollars may see a lose of purchasing power and a much nastier form of “inflation” different to the relatively harmless one of the cost-push inflation of the seventies.

 

In sum, in regards to whether we have inflation and deflation, I say we have neither insofar as both of these schools are limited as explanations of past economic events. Today, we see something completely novel. Yet these terms are still extremely helpful in order to attempt an explanation of what we are facing. If I was pressed on whether we had inflation or deflation I would say we had something of a hybrid monster of the two.

 

The irony is that though we have deflation, the inflationists, who tend to hedge against having all their worth in a single currency, may well, due to currency devaluation, be in the winning position.

 

Regards.

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I guess it's old age :unsure:

 

I look back at the days long past when $10 billion a month was a lot of money.

 

Now these young wipper snappers seem to spend it like it grew on trees.

 

 

:lol: :lol:

 

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1] yep, the billions will be swallowed up by the deflationary black hole.

 

2] the accumulated debt will massively devalue the dollar.

 

ergo, MASSIVE inflation in prices [this is where the deflationists will wake up one morning to the economic equivalent of the rapture]

 

The inflationary position will win out in the end. Wouldn't wanna be in cash.

Just my opinion... couldn't resist. :)

 

 

Posted this elsewhere in response to a cogent case made out for deflation and "cash is king".

 

** deflationary snip** ;)

 

The irony is that though we have deflation, the inflationists, who tend to hedge against having all their worth in a single currency, may well, due to currency devaluation, be in the winning position.

 

Regards.

 

bu55er he saw it.......

 

ps - we will always have deflation at some point in the cycle you know. It's inevitable isn't it ? Long term view of course.

 

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*sigh*....we have inflation and deflation at the same time. Just in different asset classes.

 

yes, right now.....it's that BIFLATIONary thingy......

 

but RH is talking about deflation in the very near future (I think ? ) ie; in the short term ?

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yes, right now.....it's that BIFLATIONary thingy......

 

but RH is talking about deflation in the very near future (I think ? ) ie; in the short term ?

Yes there will be deflation but after a massive inflation. I'd rather be hedged for inflation short- to mid-term then switch for the deflation later than sit on cash for the next 5-8 years. Each to their own.

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yes, right now.....it's that BIFLATIONary thingy......

 

but RH is talking about deflation in the very near future (I think ? ) ie; in the short term ?

 

Yep... biflation is so.... yesterday. :rolleyes:

 

Stagflation and biflation are both of the garden variety. This transmogrified beast, coming to a theater near you, is something altogether nastier.

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Yes there will be deflation but after a massive inflation. I'd rather be hedged for inflation short- to mid-term then switch for the deflation later than sit on cash for the next 5-8 years. Each to their own.

Hi C- Have you considered deflation followed sharply by inflation?

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Hi C- Have you considered deflation followed sharply by inflation?

I've considered it. If you mean by deflation, a negative rate of inflation, then you are correct, this could happen. However, none of the evidence points this way. The rate of inflation is decreasing this month but it is not negative.

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I've considered it. If you mean by deflation, a negative rate of inflation, then you are correct, this could happen. However, none of the evidence points this way. The rate of inflation is decreasing this month but it is not negative.

 

 

The credit crisis, and the frozen credit markets it has engendered, is massively deflationary. You need to consider the supply of both money and credit to the economy.

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The credit crisis, and the frozen credit markets it has engendered, is massively deflationary. You need to consider the supply of both money and credit to the economy.

yup, i'm considering it by looking at the charts at the New York Fed :D

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Just seen on another forum:

 

"Not good, our Bank has ceased all USD trading immediately and is to concentrate in clearing its dollar position. This includes FX/MM, L/Ds, securities etc..

 

Where on earth is all this going?

 

(ps i can't name the bank before one asks)"

 

Link: http://forums.overclockers.co.uk/showthread.php?t=17924496

 

A UK bank reducing exposure to USD to nothing?

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I wonder if RB got out of dollars then? ;)

I am sure over at HPC RB is trying to convinve the 1000s of newbies (now that the crash is more than obvious) that they're going to create tons of gold at CERN soon.

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:blink: :blink: :blink:

 

We really could do with a plot of the bailout growth. It must be massive.

 

Any good ?

 

http://jessescrossroadscafe.blogspot.com/

 

Fed Puts Pedal to the Metal - Adjusted Monetary Base Rises at Record Levels

 

It will be interesting to see how the lagged effects of this begin to exhibit in the broader monetary supply measures over time.

 

And the presses go rolling along....

 

 

 

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I think that $188 billion is an average over the week, not per day, though the wording is confusing.

 

I agree, I think the title of this thread is misleading. The amounts on loan change daily, but average $188 billion this week, which is over 3x increase from last week.

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