Since the commencement of IOR, NGDP growth has become totally disconnected from the monetary growth.
FORBES: The Stunning Admission Of One Of Stimulus' Chief Architects
Without IOR, QE3, and its covert preemptive bailout of the banking system, would not be feasible.
FORBES: Bernanke's Blind QE Worship Amounts To Faith-Based Economics
Last year he tried to make the IOR rescue a renowned but debt-stricken hospital.
It can buy and sell assets at will, and adjust the IOR rate at will.
FORBES: Scott Sumner's NGDP Targeting Is Not The Answer To Our Monetary Woes
However, IOR is essential if the Fed is to have unlimited freedom to expand its balance sheet.
FORBES: Bernanke's Blind QE Worship Amounts To Faith-Based Economics
If the Fed wants a robust recovery in output and employment, it must eliminate IOR and stabilize the dollar.
During testimony before the House Financial Services Committee last summer, Bernanke argued that IOR was simultaneously insignificant and essential.
FORBES: Bernanke's Blind QE Worship Amounts To Faith-Based Economics
Unfortunately, since the day that IOR was put in place, the Treasury yield curve has been inverted at the short end.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
The only thing that has kept the general price level from catching up with the rise in gold prices is IOR.
OK, but if the Fed were to zero out IOR, how would it know the right amount of assets to sell?
Since the Fed started paying IOR, the IOR interest rate has continuously been higher than the market interest rate on 90-day T-bills.
FORBES: This Economic Recovery Is Surely Different: It's FUBAR*
On October 6, 2008, the Fed blew up its own monetary control system by starting to pay interest on bank reserves (IOR).
FORBES: The Stunning Admission Of One Of Stimulus' Chief Architects
So, when the interest rate on 90-day T-bills is below the IOR rate, for practical purposes we have an inverted yield curve.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
"The Holy See wants to express the maximum confidence in the president and in the chief executive of the IOR, " it said.
On October 6, 2008, the Federal Reserve started paying interest on bank reserves (IOR) for the first time in its (then) 95-year history.
FORBES: This Economic Recovery Is Surely Different: It's FUBAR*
He put one in charge of the Vatican's treasury and appointed another to run its central bank (not the same as the IOR).
The result is that QE3 raises the cost of living for ordinary people, even while IOR holds down NGDP, and therefore employment and wages.
FORBES: When the Fed Makes Headlines, You Know We're In Trouble
Since the Fed first started paying IOR in early October 2008, the interest rate paid on reserves has consistently been above the Treasury yield curve.
Outside the U.S., "very few countries use checks, " says Denise Ryan, director of global destination services at IOR Global Services, a corporate-services firm in Northbrook, Ill.
The mechanisms by which QE and IOR work are different, and they impact different goods and services differently, depending upon how the prices of those things are determined.
The most violent contraction in RGDP occurred during 4Q2008, when the average spread between the 90-day T-bill rate and the IOR rate was the greatest, at -0.83 percentage points.
FORBES: This Economic Recovery Is Surely Different: It's FUBAR*
The Vatican Bank, known officially as the Institute for Religious Works (IOR), was created during World War II to administer accounts held by religious orders, cardinals, bishops and priests.
While the IOR rate has been constant at 0.25% since December 2008, the 90-day T-bill has fallen from an average of 0.14% in November 2010 (when QE2 commenced) to zero today.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
Pope Benedict has promised greater transparency in Vatican finances and the operations of its bank, the Institute for Works of Religion (IOR), which has in the past been implicated in major money-laundering scandals.
With the IOR rate far above the 90-day T-bill rate, banks had no incentive to do anything with the huge volume of newly created reserves other than to sit on them, and sit on them they did.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
The privately-held Vatican bank, Institute for Works of Religion (IOR), located inside Vatican City, has been at the centre of several financial scandals in recent years, and has been under investigation since 2010 for allegedly omitting data in wire transfers from an Italian account.
FORBES: We Need QE3 Like We Need A (Jackson) Hole In The Head
应用推荐