The continuing foreclosure crisis worsened in October 2008. The Federal Reserve (Fed) continued the aggressive expansion of new private credit that it began in mid-September and it created three new credit facilities to add to the plethora of other facilities created since the financial crisis component of the foreclosure crisis began in August 2007. These new facilities are aimed at stabilizing the commercial paper (CP) market, most recently adversely affected by the failure of Lehman Brothers and the failures of several money market mutual funds (MMMF). From mid-September to the end of October, the Fed more than doubled its total assets, largely by expanding its private sector lending. Perhaps the most significant question to emerge over the past two months is whether the Fed has an exit strategy to pull all of this new financial asset creation out after it succeeds in stemming deflation and before it kick starts the economy into a major inflation problem.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
11803.
Length: Date of creation: 31 Oct 2008 Date of revision: Publication status: Published in Research Buzz 8.4(2008): pp. 1-6 Handle: RePEc:pra:mprapa:11803
Find related papers by JEL classification: E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
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Dr. Peter Kenning & Hilke Plassmann, 2004.
"NeuroEconomics,"
Experimental
0412005, EconWPA.
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