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Qaagi - Book of Why

Causes

Effects

a deposit •The money multiplier(passive) caused byexcess reserves

Government spending / fiscal deficits(passive) created byexcess reserves

exactly HOW budget deficitscreateexcess reserves

converting a demand deposit into a savings depositcreatesexcess reserves

a deposit Change in loans throughout banking system(passive) caused byexcess reserves

Deficit spending without security sales from the Treasury or the Fedwould createa reserve excess

fluctuations in operating factors , such as currency needs of the non - bank public , U.S. Treasury deposits at the Fed and Federal Reserve float(passive) caused byexcess reserves

the Fed as part of its radical policy of “ quantitative easing , ” or QE(passive) created byexcess reserves

The banks complained to the Fedcreatedexcess reserves

the Fed as a result of its quantitative easing policy(passive) created byexcess reserves

Once a central bank decidesto createexcess reserves

government deficits(passive) caused byExcess reserves

government expenditure and its credit to the deposit liability side of the commercial banking system(passive) created byexcess reserves

Fed purchases(passive) created byexcess reserves

the Fed since the start of the [ global financial crisis ] source : www.folowthebots.com and zerohedge.com Symbols , Logic & Patterns(passive) created byexcess reserves

QE2 and QE3(passive) created byexcess reserves

The central bankscreatedexcess reserve

QE II through QE III(passive) created byexcess reserves

the People ’s Bank of China on a rolling basis(passive) set byexcess reserve

Instead the banks just park it back with the Fedcreatingexcess reserves

The craziest think the Fed didwas createexcess reserves

The craziest thing the Fed did wascreateexcess reserves

The Fed ... a new wayto influenceexcess reserves

deposits in relation to the FEDcreatedexcess reserve

The Fed has never neededto createexcess reserves

the expansion of the Fed ’s balance sheet(passive) created byexcess reserves

the Fed ’s bond buying program(passive) created byexcess reserves

If the Fed is forced to extend liquidity either domestically or internationallywould createexcess reserves

the Fed 's large scale asset purchase program(passive) created byexcess reserves

if the Fed buys an asset ( e.g. a bond of some kind ) from a bank and credits the bank 's accountthus creating' excess reserves

Distressed investment mutual fund Fidelity Capitol and Income , FAGIX , which approximates the value of investments owned by the Fed , that it acquired under the TARP facilityto createExcess Reserves

the Bernanke Fed Loss of faith in Uncle Sam ( a mass credit downgrade of the U.S. government ) Supply and demand issues vis - à - vis large issuances of new debt(passive) created byexcess reserves

If annual spending exceeds taxes , reserves risecreatingexcess reserves

from slack lending(passive) are createdExcess reserves

bank reserves in the financial system to increasecreating' excess reserves

LTROcreatesexcess reserves

the fact that China exports more than it imports , which is a choice of allocation of rising disposable income underlined by a decision of Chinese households to consume less than they earn(passive) are caused byexcess reserves

This actioncreatesexcess reserves

the that little gimmick of paying interest on excess reserves(passive) created byexcess reserves

The transfer of funds from transactions oriented deposits to time depositswould createexcess reserves

impending inflationcreatingimpending inflation

to lending and inflationwill leadto lending and inflation

inflation down the roadcreatinginflation down the road

to date under QEcreatedto date under QE

through the QE programmescreatedthrough the QE programmes

in the processcreatedin the process

for the purpose of implementing QEcreatedfor the purpose of implementing QE

Inflation Auerbach , Fed , excess , reservesCould SparkInflation Auerbach , Fed , excess , reserves

to inflation , which is not correct and fails to recognize how and why those reserves were createdwill ... leadto inflation , which is not correct and fails to recognize how and why those reserves were created

as a result of the Fed 's Zero Interest Rate Policy ( ZIRP ) and Quantitative Easing ( QE ) programscreatedas a result of the Fed 's Zero Interest Rate Policy ( ZIRP ) and Quantitative Easing ( QE ) programs

to an excess supply of money , which leads to price inflationleadto an excess supply of money , which leads to price inflation

because the Fed , via QE , has purchased other risky assets from youare createdbecause the Fed , via QE , has purchased other risky assets from you

in the USA alonehas createdin the USA alone

to lending explosion and(i ) inflation and ( ii ) another asset bubblecould leadto lending explosion and(i ) inflation and ( ii ) another asset bubble

banks to lend at lower interest ratesleadbanks to lend at lower interest rates

the central bank to have littlecausethe central bank to have little

to inflation , the money multiplier story and its associated fractional - reserve banking systemleadto inflation , the money multiplier story and its associated fractional - reserve banking system

from deficits by chaning asset composition from bank reserves to tsysresultingfrom deficits by chaning asset composition from bank reserves to tsys

by paying interest on the excess reserveshas createdby paying interest on the excess reserves

through central bank balance sheet expansioncreatedthrough central bank balance sheet expansion

a liability on the central bank 's balance sheetcreatinga liability on the central bank 's balance sheet

to more bank credit , when the fact is that banks can not and do not lend out reserves ; and the equally irrational belief that rising bond yields are always a bad sign for an economy , when for developed economies in a slump rising bond yields can actually indicate that economic prospects are improvingleadto more bank credit , when the fact is that banks can not and do not lend out reserves ; and the equally irrational belief that rising bond yields are always a bad sign for an economy , when for developed economies in a slump rising bond yields can actually indicate that economic prospects are improving

those banks from lending hundreds of millions of dollars in reserves to the private economypreventsthose banks from lending hundreds of millions of dollars in reserves to the private economy

velocity Market Realist Apr-01 - 14 ... Is residential construction enough to fuel construction spendingcan createvelocity Market Realist Apr-01 - 14 ... Is residential construction enough to fuel construction spending

them to expend effort to avoid holding these reserves and thereby makes the monetary system less efficientleadsthem to expend effort to avoid holding these reserves and thereby makes the monetary system less efficient

over reserve required to be created falls in category of other reserves - question answered in affirmative and in favour of assessee on basis of precedentcreatedover reserve required to be created falls in category of other reserves - question answered in affirmative and in favour of assessee on basis of precedent

the overnight rate to fall below the CB � s target , inducing it to drain reserves either through an open market sale or by reducing its discountscausethe overnight rate to fall below the CB � s target , inducing it to drain reserves either through an open market sale or by reducing its discounts

to a loss of control by the Fedleadsto a loss of control by the Fed

a change in the money supplycausesa change in the money supply

in the overvaluation of currencymay resultin the overvaluation of currency

over the last decade as a result of the 2008 Financial Crisiswere createdover the last decade as a result of the 2008 Financial Crisis

the banks to make more loanswill causethe banks to make more loans

a challenging operating framework for the Federal Reserve as the Federal Reserve seeks to raise overnight funding ratescreatea challenging operating framework for the Federal Reserve as the Federal Reserve seeks to raise overnight funding rates

instead of being wastedmay contributeinstead of being wasted

a challenging operating framework for the Federal Reserve as it seeks to raise overnight funding ratescreatea challenging operating framework for the Federal Reserve as it seeks to raise overnight funding rates

to the creation of money depositsleadto the creation of money deposits

trough traditional deposit creationcreatedtrough traditional deposit creation

in a crowding out of lendingresultin a crowding out of lending

to negative outcomesleadto negative outcomes

equalhave been createdequal

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Smart Reasoning:

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