The Rise and Fall of Hope and Change

The Rise and Fall of Hope and Change



Alexis de Toqueville

The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money.
Alexis de Tocqueville

The United States Capitol Building

The United States Capitol Building

The Constitutional Convention

The Constitutional Convention

The Continental Congress

The Continental Congress

George Washington at Valley Forge

George Washington at Valley Forge


Sunday, December 25, 2011

Elastic Currency, With a Vengeance

From The Heritage Foundation:






Monetary Policy/Financial Regulation





Elastic Currency, With a Vengeance



by Alex J. Pollock



American Enterprise Institute



November 29, 2011







The Federal Reserve has become a huge holder of mortgage-related securities. This has tightened the relationship of the American central bank and the rest of the government by creating a remarkable triangle. This government triangle is composed of: 1) The Federal Reserve; 2) The government mortgage companies Fannie Mae and Freddie Mac; and 3) The U.S. Treasury Department. What are we to make of this triangle? It’s certainly providing elastic currency with a vengeance, intertwined with real estate prices, and adding a new element—government mortgage companies—to Treasury and Federal Reserve interdependence. It does not appear that we have the ability to know how this will all turn out.





URL: www.american.com/archive/2011/november/elastic-currency-with-a-vengeance

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