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The Mortgage Market and Incentives

No, the exchange value of the dollar is largely determined by domestic inflation, the euro-dollar market and the trade deficit in that order.

The FED's role is as you laid out. But domestic inflation is the FEDs primary responsibility.

This countries problem stems from the Keynesian macro-economic persuasion that maintains a commercial bank is a financial intermediary. Banks create new money in the lending process & non-banks lend existing money. The volume of bank credit is determined by monetary policy not by the bankers. However the thrifts are dependent upon an inflow of savings.

The only correct response to the current situation is to get the commercial banks out of the savings business. This solution was partially applied to end the 66 housing crisis. Banks should store their liquidity, not buy their liquidity. It's simply accounting.