How often does the Fed normally conduct coupon passes, and for what amount? In theory, money supply should grow roughly in line with the economy, and every dollar of printed money adds 14 in reserved, right?
>From the sound of Greenspan's
> Chicago speech, he's preparing the market for a tightening, but it's
> probably not going to happen tomorrow.
>
> >2) What are the fundamental limits to the amount of Treasuries the Fed
> >can buy/money it can print? Have these limits ever been tested?
>
> The Fed would probably buy whatever it had to to stop a serious panic.
> Under law they're free to buy anything they want to - not just government
> paper, but even Amazon.com stock. Not that they would, of course.
>
OK, there are no legal limits. But say there was a panic. Could the Fed keep interest rates from rising indefinitely, simply buying more and more T-bills? Could it buy 10, 100, 1000, 10,000 billion dollars worth? What would be the immediate physical limits to the money printing?
> Doug
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