Eric Tymoigne — Money and Banking – Part 6

This post concludes our study of central banking matters (there would be a lot more to cover…maybe another time). The post studies how the Fed is involved in fiscal operations and how the U.S. Treasury is involved in monetary-policy operations. The extensive interaction between these two branches of the U.S. government is necessary for fiscal and monetary policies to work properly.…

I am taking a 3-week break to take care of other things with upcoming deadlines. Next is private banks, followed by financial crises, inflation and growth, and finally issues surrounding the nature and history of money. There is probably another six/seven posts worth of material.

New Economic Perspectives
Money and Banking – Part 6
Eric Tymoigne | Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College

Eric Tymoigne — Money and Banking – Part 5

Next up in the series.

Previous posts studied the balance sheet of the fed, definitions and relation to the balance sheet of the fed, and monetary-policy implementation. In this post, I will answer some FAQs about monetary policy and central banking. Each of them can be read independently.

New Economic Perspectives
Money and Banking – Part 5
Eric Tymoigne | Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College

Carola Binder — Potential Costs of Asset Purchases

How insiders think.

Quantative Ease
Potential Costs of Asset Purchases
Carola Binder | graduate student at UCAL Berkeley

Limits on Fed purchases

Marris asked in the comments about limits on Fed purchases. Nick Rowe recently up up a guest post by JP Koning at Worthwhile Canadian Initiative on this. Interesting comments on the post there, too.

I thought it important enough for the purview of this blog to call attention to it here.

Read it at Worthwhile Canadian Initiative
The legal scope of Fed purchases
by J P Koning

The ECB is now bigger than the Fed!

In terms of assets, the ECB is now bigger than the Fed.

We often hear people attack the Fed for "printing money." They're saying the Fed is "debasing" the currency. (Whatever that means because the currency has no "base.") Yet when it comes to the ECB these comments are nowhwere to be found.

That's odd, because these days the ECB takes the prize when it comes to "money printing." (Real term is accumulating assets and/or "total factors affecting reserve balances.")

The chart belows shows the balance sheet (total assets) of the Fed and the ECB in dollars. The ECB's balance sheet is now far above the Fed's, by about $400 bln and nearly $200 bln of that came in just the last six weeks. Where are the folks talking about the debasing of the euro?

There is clearly an anti-Fed, anti-dollar bias in the world.