Mãe de todas as crises financeiras | Armstrong Economics

Mãe de todas as crises financeiras | Armstrong Economics: QUESTION: The distinction between the Repo Crisis and Quantitative Easing is the duration and purpose as distinguished from 2007-2009? HS ANSWER: Yes. Under QE, the Fed was buying in 30-year bonds in hope of creating a shortage of long-term paper that would in theory lead to consideration of buying long-term mortgage paper. It was trying to reduce the competition of government long-term debt with the private sector. That is when I warned that such a policy would fail because it was INDIRECT and the assumption that the holder of the 30-year bond they were buying-in was American. I warned on Capital Hill that the Chinese were selling their 30-year debt holdings to the Fed and reducing their maturity to 5 years. Hence, the stimulus was being exported and today, the dollar hoarding is massive. Even 70% of physical dollars are outside the USA. Here once again we have people who have no understanding of banking spouting out nonsense that this is QE because the Fed's balance sheet must be expanding. Under QE, they permanently bought-in debt. Here in the Repo Crisis, they are acting as the middle-man providing liquidity on a 24 hours basis BECAUSE banks do not trust banks. These people who

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