storm999

The Federal Reserve and the Velocity of Money

It seems to me regardless of the accounting mechanism, what is going on is that the banks are swapping illiquid securities for treasuries which can be used as collaterol in their derivatives contracts. Part of the credit crisis has been a demand for collaterol while bank assets are becoming illiquid.


There is a lot of name-calling going on, which is unhelpful. The monetarists need to chill a little.