tag:blogger.com,1999:blog-3758330678390419129.post3426175800500250543..comments2024-02-13T02:39:22.756-05:00Comments on EconomicPolicyJournal.com: A Note on the Money MultiplierRobert Wenzelhttp://www.blogger.com/profile/14296920597416905488noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3758330678390419129.post-23453952886407861482012-09-16T17:15:45.264-04:002012-09-16T17:15:45.264-04:00I can tell you that it is happening. I see the day...I can tell you that it is happening. I see the day to day banking operations. They're double lending and then parking the rest at the fed (and it appears that others have gotten the hint and may be doing more than double based on daily interchange happening between banks. Right now we're getting about 1% from the Fed (little lower) for excess reserves. A t-bill is still going for more James Hancockhttps://www.blogger.com/profile/00691491559386497208noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-74371379605198863472012-09-15T19:25:23.281-04:002012-09-15T19:25:23.281-04:00This is theoretically what can occur, but is not n...This is theoretically what can occur, but is not now since the interest rate on excess reserves is twice the t bill rate.Robert Wenzelhttps://www.blogger.com/profile/14296920597416905488noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-90278154017489535042012-09-15T17:39:55.044-04:002012-09-15T17:39:55.044-04:00This is because the fed loans the banks money to l...This is because the fed loans the banks money to loan to the government and buy treasuries. They take that money as tier one capital, lend out all but 10% to the government.<br /><br />They then take the 90% that they lent out to the government and because treasury bonds are also tier one capital they loan out 90% of that.<br /><br />The other 20% comes from other fed activities like loaning to James Hancockhttps://www.blogger.com/profile/00691491559386497208noreply@blogger.com