[ExI] M0 singularity... you're soaking in it

[samantha]

Gordon Swobe wrote:
>> So, Gordon, help me better understand this "M1 Multiplier".  
> 
> The M1 Multiplier has plummeted to < 1 because banks have decided to keep reserves far in excess of that required by regulations, i.e., instead of lending money, they're hoarding it. That hoarded money might help keep banks solvent, but it does little to stimulate the general economy. 
> 

They are actually being paid interest by the Fed to keep these reserves. 
  Now why is that if it is simply *hoarding*?  Of course the Fed is at 
heart a private consortium of bankers.


> The main point I want to make is that this is a sick economy in which monetary policy has become somewhat impotent. As I mentioned, much the same thing happened in Japan some years ago. The Japanese central bank could not cut its short term interest rate below zero, nor could it force banks to lend the proceeds of its open market purchases of government securities. 
> 

A sick economy is one the government witch doctors have practiced on for 
  far too long.  The witch doctors are now in an utter frenzy that might 
be fascinating from far enough away but is almost certainly fatal for 
the poor patient.


> Japan's quantitative easing may have averted a full-blown depression in Japan, and it no doubt helped to keep a few Japanese banks in business, but it did not cause much growth or price inflation. 
> 

One thing Japan had is what we most lack.  The people had massive savings.


> Then again, who knows what may happen here? We live in precarious times. This is uncharted territory for the United States, and for the world in general.
>

I know that I would rather not have this particular flavor of 
"interesting" times be part of my "middle years".  But here we are.

- samantha