Required reserves were estimated to be 60 billion. Gross required reserves for the two weeks
ended 1/9/2013 were 114 billion from which we can subtract eligible vault cash
of 54 billion. See 1/10/2013 Fed Report
H.3 (502). Note -- Total institutions' deposits were 21 billion in 1951 and 19 billion in
2006.
Excess reserves were 447,451 M equal to 507,541 M in total reserves less 60,000 M in estimated required reserves.
Right or wrong the source for the 507,541 M:
http://federalreserve.gov/econresdata/releases/combanksal/combanksal120130331.htm
Money creation account balance was 1,712,327 M equal to total securities of 2,838,988 M less Federal Reserve notes in circulation of 1,126,661 M.
Money elimination account balance was -728,823 M equal to the combination of 447,451 M offsetting excess reserves plus 281,282 offsetting funds primarily from sources outside of institutions' deposits.
I do not believe the Fed would subject itself to the interest rate risk involved with funding trillions in long term assets with trillions in short term funds -- ergo the need for the money elimination account. If, as I believe, LT assets are not funded by reserve deposits, whatever happens to the future level of reserves is irrelevant. The Fed is still subject to interest rate risk in that LT securities will depreciate as LT interest rates rise. The Fed has stated it will not sell its mortgage backed securities, if so, their depreciation will be irrelevant. The Fed will still have more than enough interest earnings to fund its operations and continue to refund unspent interest earnings to the Treasury.
One way or another, these accounts are manipulated. If the public and Congress understood the magic used to create money the Fed uses to purchase LT securities, they would lose whatever faith they may still have in the Fed.
Predictions: Our next, wholly avoidable crises will arrive in late spring/early summer. Look for significant events on or around 5/22/2014.
Fed QE 3/4 tapering is set to begin in January with a mere 10 B reduction in securities purchases. The longer they extend tapering, the larger will be the financial collapse.
- Fed Taper Day, December 18th, was the beginning of the end. The bond, stock, and then home market bubbles will begin to collapse into the Great Recessions II.
The troop level in
- Karzai
or the new President will sign a status of forces agreement with the
US . - Force
levels will stay around 30,000 as they were during the Bush years for
possible use in
Iran and to protect illegal drug profits. The UN Office on Drugs and Crime 2008 report showed the potential metric tonnage of Afghan opium production rose from 185 metric tons during its ban in 2001 to 8,200 metric tons in 2007. UNODC 2013 report showed potential metric tonnage at 5,500. 80% of drug profits are made in the country of consumption i.e.America . The loss of these profits would hurt our plutocrats and deepen our recession. (i)
The end of April will be the end of nine months of peace
negotiations between
- Negotiations
will end without a final agreement.
The collaboration will
continue between greater
Palestine terrorists and greater Israel Zionists. Terror and occupation will continue to rationalize each other. - Israel/Palestine
will explode in violence. The UN
will recognize
Palestine without borders as a full member state by the end of 2015. - Terror
threats against the
US will skyrocket with a concomitant negative effect on markets.
The end of May will be the end of the initial six months delineated
in the interim, nuclear agreement with
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