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WMARKW

WMARKW
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  • Federal Reserve Continues To Supply Foreign-Related Banks... And The World [View article]
    "The big question concerns what happens to these international flows as the Fed stops purchasing securities on a regular basis and the financial world returns to a more "normal" state. One has to take this definition of a "normal state" with a lot of care since cash balances with Federal Reserve banks will probably be around $2.8 trillion at that time. That is, when the Fed stops tapering, there will be close to $2.8 trillion in excess reserves in the banking system!"

    The reversal process for the Fed will simply be to sell its Treasury and MBS assets, or to let them mature and extinguish the money they created out of thin air when they bought them from the holders or Treasury in the first place.

    In the case of the former - the sale of these assets, they will replace them with cash and extinguish the cash (formerly created out of thin air by digital deposit). In the case of the banks, they will then hold debt instruments instead of cash.

    In the case of the latter, the Debt instruments will mature, the GSE or Tresaury will repay the Fed, and the Fed will then make the digital balances disappear, and the Banks will be left holding tons more cash than they formerly had.

    CB reserves also increase when the US government runs deficits. Thus that is another reason for the increase in Excess Reserves at the CB over the last 6 years.

    Interestingly, when foreign holders of UST's opt to reduce their holdings, they are electing conversely to hold USD's otherwise. Of course they can trade them for any currency or other debt instrument they want. If they choose to hold cash, in the form of USD's, then Excess reserves will go down.
    Mar 21 03:58 PM | Likes Like |Link to Comment
  • Bank Money Is Contracting (And Other Hidden Statistics) [View article]
    SWAPS - and the extra benefit, is that the NSA doesn't have or can't make a profile of you as easily. Sweet.
    Mar 21 02:14 PM | 1 Like Like |Link to Comment
  • Interesting Times For All Commodities And Investments!! Chapter 59.....  [View instapost]
    Don't doubt. I've been thinking about that for some time. Unfortunately in Central America, there are not too many places where I feel the security of a stable nation able to defend themselves against the drug cartels. So I am still considering.
    Mar 21 09:26 AM | 1 Like Like |Link to Comment
  • Bank Money Is Contracting (And Other Hidden Statistics) [View article]
    I thought minors (some college students) couldn't enter into contracts. (student loan agreements)?
    Mar 20 03:18 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    JC, I have watched that same HK project with wonder and amazement as these guys just pull this construction right out of the water. Truly amazing what you can do with engineering, effort and $$$.
    Mar 20 09:12 AM | 1 Like Like |Link to Comment
  • Jobless Claims up 5K to 320K [View news story]
    Ho...Hum. Same old same ole.
    Mar 20 09:09 AM | Likes Like |Link to Comment
  • Gold Loses 'Ukraine Premium' [View article]
    Perhaps the idea of gold's rise being the "Ukraine Premium" is totally unreal.
    Mar 19 05:56 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    In JD's world, as I understand, there is infinite supply. Imagine a 3-d printer that can print a new heart. Or one that can print up dinner. If there is no scarcity, then there is no need to worry about population. That being the case, have as many or as few kids as you want. If you enjoy them, the have more. If not, then have none.
    Mar 19 05:48 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    Why.....one man's excess is another man's quiver. The concept of excess is only applicable if there is a companion concept of shortages.
    Mar 19 05:40 PM | 2 Likes Like |Link to Comment
  • A Brief History Of Gold And Why It's Overvalued By A Factor Of 2 [View article]
    ABC - and I suspect that the way the very rich and super rich see gold is dramatically different than the way we see it - even to the degree that to them it may be valued significantly higher than market price.
    Mar 19 05:39 PM | Likes Like |Link to Comment
  • A Brief History Of Gold And Why It's Overvalued By A Factor Of 2 [View article]
    JDJ - congrats on 500+ comments. A good column on "Gold" will always get you 500 comments - especially if Author engages.
    Mar 19 03:35 PM | 2 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    Pretty sure the fundamentals of economics support that changing the minimum wage upward will change the shape of the demand curve for employees - and not in a favorable way.
    Mar 19 03:24 PM | 5 Likes Like |Link to Comment
  • Wall Street Breakfast: Must-Know News [View article]
    You mean.....bare chested on horses with flat blade swords.
    Mar 19 09:19 AM | 12 Likes Like |Link to Comment
  • Bottom In Gold Likely To Be Below $770 [View article]
    Illuminati - here's two papers/articles on Gold during inflation and deflation periods.

    http://bit.ly/yo231o

    http://bit.ly/x3RW4A
    Mar 18 09:15 AM | 1 Like Like |Link to Comment
  • A Brief History Of Gold And Why It's Overvalued By A Factor Of 2 [View article]
    filipo....you nailed that one on the head. Wars are THE most destructive force in the world to both human capital and financial wealth. They take things (like WWII airplanes) that rolled off the end of an assembly line or an ICBM and vaporize them into nothingness. Imagine everything you have worked for your entire life being tied up in a farm, machinery and house that gets bombed into oblivion.

    If you look at the changes to the Gold Standard they were precipitated primarily by England's post-WWI effort to return to Gold Exchange Standard and what I think was the USA's anticipation of WWII in Europe. There is absolutely NO WAY to finance wars. Ummm....perhaps the future is cheap "digital" warfare.
    Mar 17 06:03 PM | 1 Like Like |Link to Comment
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