Iraq agrees to destroy missiles

[Ned]

Originally posted by Frogger
Ned, whether they will or not doesn't make a difference; at best it does little to tighten the credit supply. At worst it dries it up completely. Isn't this exactly the opposite of what you intended?

I so long as they only keep 10% reserves and the reserves are growing, the total money supply is growing. This cannot tighten credit.

[DuncanK]

The money supply would shrink if the banks increased their reserves. The multiplier effect would more than offset the increase from the Fed.

[KrazyHorse]

Ned, you make no sense. You assume that the reserves will grow because you stimulate them to grow (this is true) but also somehow that taking cash money from the banks and putting it in the Fed will increase their capacity to lend?

Holy ****...

[Comrade Tribune]

Originally posted by DAVOUT
No problem, to morrow if you like. We will be interested in watching the Young Europe competing with the Old one.

May Austria join you in the out-EU? I´d rather belong to Old Europe.

[Ned]

Originally posted by Frogger
Ned, you make no sense. You assume that the reserves will grow because you stimulate them to grow (this is true) but also somehow that taking cash money from the banks and putting it in the Fed will increase their capacity to lend?

Holy ****...

For every dollar of reserve interest paid, the banks can lend 90 cents and only ten cents is added to reserves.

[Velociryx]

oliverfa , one would think so, yes!

However, the peacenik crowd is pointing out how "cooperative" Saddam is being for graciously offering the destruction of the missiles he obviously knew nothing about in his country.....

It's amusing....put your hand on a hot stove, and it burns, so you take it away.

A few minutes later....you put your hand back on the stove, and much to your amazement....IT BURNS AGAIN!

Take your hand away....wait a few more minutes....put your hand back on the stove. Yep....still burns.

Eventually, one would think that the message would begin to seep through even the most lovable, thick-headed people around.

If the stove is hot, and you put your hand there....it WILL burn.

But no....apparently this is some deeply mysterious message as it relates to Saddam Hussein, and rather than seeing the missiles for what they are (a blatant defiance of 1441, and by themselves--never mind the anthrax we know he bought, and all the other stuff he has yet to provide destruction orders for--PROVE non-compliance.....no....instead, we should focus on his willingness to destroy the missiles (but only after being caught red-handed) as proof of what a nice, cooperative man he is....

Yeah.

-=Vel=-

[DuncanK]

Originally posted by Ned
For every dollar of reserve interest paid, the banks can lend 90 cents and only ten cents is added to reserves.

Ned,

You are neglecting the possibility that banks will see dollars as a safer investment than loans and stockpile excess reserves. If you pay banks to keeps reserves that will make dollars a better investment and increase the possibility of banks hoarding dollars. That's a dangerous thing to do when the economy is in such danger.

[Velociryx]

He's not neglecting it....it's simply that it'd never be the case.

-=Vel=-

[KrazyHorse]

Originally posted by Ned


For every dollar of reserve interest paid, the banks can lend 90 cents and only ten cents is added to reserves.

The Federal government would do better offering loans of its own. Which it already does.

Holy sh*t, man.

[PLATO]

Originally posted by Spiffor
Plato :
I thought the upcoming "2nd resolution" on the Iraq issue is precisely intended to bring the word "force" in a UN resolution ?
I admit my sources on the topic are biased (French left-wing news). Do you know where I can find the official speeches countries held at the time 1441 was passed ? You seem to know much more about the UN than I do. Thx

Spiffor, I have been unable to locate specific transcripts of security council presentations. I have attached two links to help clarify the background.

Security counsel press release concerning 1441:

Included are the resolution itself and the statements of the council members and the Secretary General

http://www.un.org/News/Press/docs/2002/SC7564.doc.htm

Wrt the French position on use of force I am attaching a BBC article from 06 Feb 2003

http://news.bbc.co.uk/2/hi/middle_east/2732939.stm

I will continue to look for transcripts for you.

[DuncanK]

Originally posted by Velociryx
He's not neglecting it....it's simply that it'd never be the case.

-=Vel=-

It is the case. Banks are very rational. Loans are much more risky than cash. At some point they would rather keep the cash than make more loans. That point comes sooner if they are paid a return for holding cash.

[DuncanK]

Interest rates are already zero in Japan. The Bank of Japan is buying government debt to stimulate the economy. I don't agree with it though. It's tough for Japan because their economy isn't as big as that of the US, but I still say huge budget deficits are the only thing that will help them. Big deficits in the US would certainly help them even more.

[PLATO]

Originally posted by Ned


For every dollar of reserve interest paid, the banks can lend 90 cents and only ten cents is added to reserves.

Ned's analysis is correct to a point.

The Fed should only pay interest on the required reserves.

Further, this would increase the money supply with a multiplier effect of 2 times for government lending and 3 times for consumer and business lending. Therefore you could assume that the net effect on M1 would be .01 X (.1 X reserve requirement) X 2 for government lending and .01 X (.1 X reserve requirement) X 3 for consumer or business lending.

[lord of the mark]

Originally posted by Ozz


GA resolution isn't binding? Sounds like a bit of lawyer
snakeoil here. More like 'yer too strong or important to
attack' or 'your not worth the expense to attack'.

Hardly, rather it was one of the elements in the writing of the charter. thats why the big powers insisted on vetos in the UNSC only. Its a huge difference, one all the UN is familiar with.

[PLATO]

Originally posted by lord of the mark


Hardly, rather it was one of the elements in the writing of the charter. thats why the big powers insisted on vetos in the UNSC only. Its a huge difference, one all the UN is familiar with.

Exactly.