But why not purchase stuff other than T-bills? This can be thought of as changing the composition of the Fed's balance sheet, rather than enlarging it; and Ben Bernanke, in happier days, thought that might be an effective policy in a liquidity trap. ... Nonetheless, I guess the Fed had to try the "Bernanke twist." And it did -- the old Fed balance sheet, in which T-bills were the vast bulk of assets, is no more. But the effects have been disappointing, especially weighed against the risk, which I know is making Fed officials very nervous. ... So Ben Bernanke came into his current position believing that central banks have the power, all on their own, to fight Japan-type problems. It seems that he was wrong.
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Nonetheless, I guess the Fed had to try the "Bernanke twist." And it did -- the old Fed balance sheet, in which T-bills were the vast bulk of assets, is no more. But the effects have been disappointing, especially weighed against the risk, which I know is making Fed officials very nervous.
So Ben Bernanke came into his current position believing that central banks have the power, all on their own, to fight Japan-type problems. It seems that he was wrong.
USA are in much bigger dung. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
