Roger Farmer — The Next Great Depression

What can we do? What should we do?

First: Give the Fed the power to buy a value weighted Exchange Traded Fund that contains every publicly traded stock. Commit to support the ETF by buying stocks. Pay for the shares by borrowing, or by trading Social Security Trust Fund.

Second: Raise the money interest rate to bring us back to normality and restore normal functioning of monetary policy.

When? Now!

If we do not act, and act soon, we are headed for another Great Depression.

Roger Farmer's Economic Window

The Next Great Depression

Roger Farmer | Distinguished Professor of Economics at UCLA

Dirk Ehnts — How much financial assets can the Fed buy per year?

The Fed can create central bank money (reserves) by keystroke and in this manner acquire financial assets, thus reducing their supply and likely increasing the price of the remaining financial assets. Whether it was a good idea to do this will be the subject of some discussion in the future, I think. (Note that the Fed is not allowed to spend those reserves into the real economy directly by buying goods and services. That would be Treasury’s job, with its democratic oversight.)

I understand that the Bank of Japan is now buying equities as part of its QE program, too. It's been rumored that the Fed had a "plunge protection team" as part of the "Greenspan put."

econoblog 101
How much financial assets can the Fed buy per year?
Dirk Ehnts | Berlin School for Economics and Law