QE3.5? ~ The Fed’s New Scheme

The Federal Reserve … $4 trillion balance sheet

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The Money GPS is the book by David Quintieri featuring Bob Chapman, James Turk, and David Morgan.

FREE version @ http://themoneygps.com/free
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Policy makers are testing a new tool intended to improve their control of near-term borrowing costs. The facility would allow banks, broker-dealers, money-market funds and some government-sponsored enterprises to lend the Fed unlimited amounts of cash overnight at a fixed rate in exchange for borrowing Treasuries in so-called reverse repo transactions.

The facility is the latest innovation from a central bank that has participated on an unprecedented scale in U.S. debt markets since the credit crisis began in 2007. It’s designed to help policy makers — buying $85 billion of bonds a month — siphon off excess cash in the banking system when they begin to tighten policy. Three rounds of so-called quantitative easing have enlarged the Fed’s balance sheet to almost $3.8 trillion.

The new tool — called the fixed-rate, full-allotment overnight reverse repo facility — also is aimed at helping Fed officials address distortions in the market caused by their securities purchases.

http://www.morguefile.com/archive/display/49609
http://www.bloomberg.com/news/2013-10-14/fed-gets-bigger-in-markets-as-qe-prompts-new-tools.html
http://www.bloomberg.com/news/2013-10-14/central-banks-begin-gaming-out-u-s-default-as-deadline-nears.html
http://www.shadowstats.com/article/no-500-special-commentary-us-government-gaap-based-2012-financial-data

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The Money GPS is the book by David Quintieri.
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FREE copy @ http://themoneygps.com/free
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