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Exactly what are the central banks doing to help speculators, concretely? And what should they cease doing?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid (arvid.hallen at gmail.com) on Mon Jan 30th, 2012 at 09:25:25 AM EST
[ Parent ]
They should start offering to lend money against security in banks' assets. On the other hand, they should stop defending the interbank interest rate. That way you can allow banks to fund different activities at different interest rates and with different margin requirements.

Once you've done that, you can do a variety of things - my favourites being to deny rediscount facilities to loans made against security in foreign or financial assets, but begin selling currency swaps into your own currency and acting as market maker for currency swaps out of your own currency between private firms and foreign central banks.

- Jake

If you only spend 20 minutes of the rest of your life on economics, go spend them here.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Jan 30th, 2012 at 09:40:24 AM EST
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