10
votes
2answers
286 views

What is the “Bernanke Twist” and “Operation Twist”? What exactly does it do?

I was reading the article Bernanke’s Twist Sharpens Year-End Anxiety Over Stimulus and In the article it says The Fed on June 20 extended its Operation Twist program to swap $267 billion in ...
10
votes
2answers
855 views

Who creates money? Central banks or commercial banks?

Which of these is a better description of money creation: Scenario 1: Central bank creates money Customer A deposits $10 at his bank. Customer B wants to borrow $100. The bank is in good standing ...
11
votes
1answer
209 views

WSJ article about CFDs - am I missing something?

In this WSJ article, it comments Traders held a net $22.6 billion in bets that the dollar will appreciate, a gain of 31% in net wagers over the previous week and the largest such position since ...
7
votes
4answers
232 views

Fractional Reserve Banking and Insolvency

When talking about fractional reserve banking, if we take a contrived example. 1,000 people deposit US$1,000. Deposit total are $1m. Then the bank subsequently loans US$ 900,000 via a series of ...
6
votes
2answers
346 views

Do banks keep their reserves at the Fed in cash or can they be kept in US Treasuries?

This chart at the St. Louis Fed has a lot of people worried about future inflation, because it represents idle money that, when lent out, could eventually flood the world with 10 - 12 trillion new ...