MOre boring crap on money creation

DANIEL.DAVIES at flemings.com DANIEL.DAVIES at flemings.com
Thu Apr 13 01:14:37 PDT 2000


DANIEL.DAVIES at flemings.com wrote:


>>I think there are cross purposes here. I never read Enrique as saying
that
>>the MMMFs were immune to a Fed tightening; I thought he was saying that
the
>>MMMFs were a secondary, uninsured banking system, and that money and
credit
>>figures which didn't take account of this sector were therefore flawed.

At 6:38 PM -0400 4/8/00, Enrique Diaz-Alvarez wrote:


>>If Noland is right, and his argument does sound more persuasive, the Fed
>>has effectively lost control over the US financial system.


>Doug

Just goes to show how wrong you can be. . . . .

Enrique, this can't be right. The Fed's means of control over the financial system is the interest rate, and they haven't lost control of that. The MMMFs are an *unregulated* banking system, in the sense that there's little or no prudential supervision of them. But that's a different thing.

dd

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