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The Austrian school economists would respond that
providing liquidity *is* intervention, and that any
intervention in the markets contributes to boom and bust
cycles. Intervention is the problem, not the solution ;)
----- Original Message -----
From: "Terry B. Rhodes" <trhodes3@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Tuesday, November 18, 2003 6:16 PM
Subject: [RT] Re: Fed supporting market
As others have pointed out, providing liquidity is not the
same as intervening directly to support the market. I have
confirmed as fact that the FED is legally capable of
intervening directly, but know of no confirmed incident
where this has happened. This is the question i am asking
Providing liquidity is the standard FED response to any
financial crisis, real or imagined. 1987, Y2K and 9/11 are
a few examples of this.
regards,
tbr
> The fact is it did happen in 1987. The fed told the banks to
> give unlimited credit.
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