Well, Bless Poole's Beautiful Hide!

By: Adrian Ash | Thu, Aug 16, 2007
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ONLY A "CALAMITY" would justify an interest-rate cut now, says St. Louis Federal Reserve chief William Poole.

In which case, he either liquidated his personal stock investments before June...or the guy's got some real hide.

Fed Funds Target vs. Effective Fed Funds

"The daily effective federal funds rate is a volume-weighted average of rates on trades arranged by major brokers," says the New York Fed. And as you can, it's slipped sharply below target...closer to the current yield on 10-year Treasuries, in fact.

So why does the US central bank insist in lending fresh cash to the money markets through its open-market operations? The Fed's put in $76 billion over the last week, ostensibly to keep the Fed funds rate on target by making money more readily available.

Some $24 billion of that liquidity is still outstanding right now (as of 10:45 EST, Thurs 16 Aug.), with the latest $5 billion being auctioned for a repurchase agreement just ahead of today's open.

Does that make it a calamity yet?

 


 

Adrian Ash

Author: Adrian Ash

Adrian Ash
BullionVault.com

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the head of research at BullionVault, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

About BullionVault

BullionVault is the secure, low-cost gold and silver exchange for private investors. It enables you to buy and sell professional-grade bullion at live prices online, storing your physical property in market-accredited, non-bank vaults in London, New York and Zurich.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/