tag:blogger.com,1999:blog-3758330678390419129.post8546969506517215122..comments2024-02-13T02:39:22.756-05:00Comments on EconomicPolicyJournal.com: Part 2 - The Bernanke Bluff: On the Trillion Dollars of Excess ReservesRobert Wenzelhttp://www.blogger.com/profile/14296920597416905488noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-3758330678390419129.post-13566510278223615742009-12-19T12:39:43.835-05:002009-12-19T12:39:43.835-05:00One thing to keep in mind with the excess reserves...One thing to keep in mind with the excess reserves is that, before the Fed started paying interest on those reserves, banks were putting their excess reserves in the overnight Fed Funds market, Federal Home Loan Banks, and other similar areas, not at the Federal Reserve.<br /><br />This raises a question: How much of this Trillion is actual emergency money from Fed programs and what is just Mike in Alaskanoreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-34101249578519958152009-12-19T09:56:47.150-05:002009-12-19T09:56:47.150-05:00@Anonymous
The Fed would have to pay an infinite ...@Anonymous<br /><br />The Fed would have to pay an infinite interest rate?<br /><br /><em> Most outstanding paper was fixed term and rate. These banks could not have wound down the majority of their loans, whether or not the fed had boosted their reserves. </em><br /><br />They sure can if the are keeping the funds they receive as excess reserves.<br /><br /><em>One way or another, these reservesRobert Wenzelhttps://www.blogger.com/profile/12653378186315529211noreply@blogger.comtag:blogger.com,1999:blog-3758330678390419129.post-69289242474272093842009-12-19T09:52:18.467-05:002009-12-19T09:52:18.467-05:00The Current Issues report is nonsensical; the idea...The Current Issues report is nonsensical; the idea that the fed reserves had an effect on the economy because they induced banks not to wind down existing loans is unfortunately irrelevant. Most outstanding paper was fixed term and rate. These banks could not have wound down the majority of their loans, whether or not the fed had boosted their reserves. <br /><br /><br />I also point out that theAnonymousnoreply@blogger.com