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Is there any limit to the monetary tools the Fed will use to inflate the economy?

*Financial Times, by Aline van Duyn, August 10, 2009

“Unprecedented moves by the US Federal Reserve to help combat the global financial crisis have left it facing an unexpected practical problem: finding space for all the extra people it needs to manage its expanded role.

The issue has been particularly critical at the New York Fed – the arm of the central bank which implements its monetary policy.

Now, however, things are rapidly taking shape.

For example, the ‘Talf 2.0’ team – the Fed staffers seeking to revive the still dysfunctional market for securities backed by commercial mortgages through the $1,000bn term asset-backed loan facility (Talf) – are about to move into one of three extra floors the central bank has leased near its main headquarters on Liberty Street, in New York’s financial district.

In the last year, the size of the Fed’s balance sheet has more than doubled to in excess of $2,000bn.

It has also embraced an unprecedented array of new monetary policy tools – from providing overnight funding to a greater range of financial institutions, to propping up commercial paper markets, to lending money to hedge funds to buy securities backed by credit cards.”

*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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