How on earth do I have a "pat-us-on-the-head" attitude?
You're just infusing your comments with what I think is political (possibly Ron Paul-esque) rhetoric without understanding how monetary policy transmission and Fed lending works even when I am trying to explain the thing and providing verifiable facts.
I have nothing to say about schools of macroeconomic thought because then you are very likely to turn this in to a political issue (given that you consider fractional-reserve banking as "infinitely" leveraged) and HN isn't the right forum. I have my views but I'll keep them to myself.
Edit: Also, the Fed isn't "taking out" trillions out of the economy. Neither did it inject trillions into the economy. It is just swapping one sort of asset with another to ensure that liquidity, as a whole, remains constant. During the crisis, it swapped out non-performing assets (illiquid) with plain cash (liquid).
When the economy fares better and appetite for credit-risk returns, the illiquid assets also become liquid with a much fairer valuation. Hence, now the Fed would swap out cash for these assets.
You're just infusing your comments with what I think is political (possibly Ron Paul-esque) rhetoric without understanding how monetary policy transmission and Fed lending works even when I am trying to explain the thing and providing verifiable facts.
I have nothing to say about schools of macroeconomic thought because then you are very likely to turn this in to a political issue (given that you consider fractional-reserve banking as "infinitely" leveraged) and HN isn't the right forum. I have my views but I'll keep them to myself.
Edit: Also, the Fed isn't "taking out" trillions out of the economy. Neither did it inject trillions into the economy. It is just swapping one sort of asset with another to ensure that liquidity, as a whole, remains constant. During the crisis, it swapped out non-performing assets (illiquid) with plain cash (liquid).
When the economy fares better and appetite for credit-risk returns, the illiquid assets also become liquid with a much fairer valuation. Hence, now the Fed would swap out cash for these assets.