What is liquiity and how did the US government inject it after 9/11.?

Question

Please explain and be through. It would be appeciated. Colin

Answer 1

Liquidity is by definition of the English Encarta Dictionary “assets that can easily be converted into cash“. Whenever this term is applied in an economic context, we are talking about money supply in the monetary market. In such market, when supply and demand met, that results in an equilibrium price (the interest rate) and quantity (of real money balances).

When thinking about the "supply" of money, it is natural to think of the total of banknotes and coins in an economy. That, however, is incomplete. Because (in principle) money is anything that can be used in settlement of a debt, there are varying measures of money supply. The narrowest (i.e., most restrictive) measures count only those forms of money available for immediate transactions, while broader measures include money held as a store of value. The most common measures are named M0 (narrowest), M1, M2, and M3. In the United States they are defined by the Federal Reserve as follows:

- The printed banknotes and minted coins money supply is commonly known as M0.

- The more accurate starting point for the concept of money supply is the total of all electronic credit-based deposit balances in bank (and other financial) accounts plus all the minted coins and printed paper. The M1 money supply is M0, plus the total of (non-paper or coin) deposit balances without any withdrawal restrictions (restricted accounts that you can't write checks on are put in the next level of liquidity, M2).

The relationship between the M0 and M1 money supplies is the money multiplier — basically, the ratio of cash and coin in people's wallets and bank vaults and ATMs to Total balances in their financial accounts. The gap and lag between the two (M0 and M1 - M0) occurs because of the system of fractional reserve banking.

Within almost all modern nations, special institutions (such as the Bank of England, the European Central Bank or the Federal Reserve System) exist, which have the task of executing the monetary policy independently of the executive (for example the US Government). In general, these institutions are called central banks and often have other responsibilities such as supervising the smooth operation of the financial system.

The central bank influences interest rates by expanding or contracting the monetary base, which consists of currency in circulation and banks' reserves on deposit at the central bank. The primary way that the central bank can affect the monetary base is by open market operations or sales and purchases of second hand government debt, or by changing the reserve requirements. If the central bank wishes increase liquidity or money supply it will have to lower interest rates, by purchasing government debt, thereby increasing the amount of cash in circulation or crediting banks' reserve accounts. If the interest rate on such transactions is sufficiently low, commercial banks can borrow from the central bank to meet reserve requirements and use the additional liquidity to expand their balance sheets, increasing the credit available to the economy. Lowering reserve requirements has a similar effect, freeing up funds for banks to increase loans or buy other profitable assets.

The debate rages on about whether monetary policy can smooth business cycles or not. A central conjecture of Keynesian economics is that the central bank can stimulate aggregate demand in the short run, because a significant number of prices in the economy are fixed in the short run and firms will produce as many goods and services as are demanded (in the long run, however, money is neutral, as in the neoclassical model).

As the Fed acts independently of the executive, the US Government couldn’t directly inject liquidity in the economy after 9/11. But it could nominate to high responsibility chairs, people in whom they trust…

Answer 2

Not even the government or the pharmaceutical companies claim vaccines are completely safe. However, the pharmaceutical companies are completely safe from lawsuits. The National Childhood Vaccine Injury Act of 1986 prohibits vaccine injury lawsuits against pharmaceutical companies.

Answer 3

TELEVISION IS THE MEDIA THAT TOOK ON THIS ROLL AND WAS RESPONSIBLE FOR SHOWING TONS AND TONS OF MEGA BLOCKS OF TEN FOOT SQUARE SARAN WRAPPED BLOCKS ridding around on fork left trucks, MOUNTAINS OF CASH SENT TO BACK UP EVER FEDERAL RESERVE BANK(s)~ALL PROPAGANDA BY BIG BROTHER AND ALL WAS A RUSE TO TAKE DOWN THE BORDER AND BRING IN CHEAP LABOR TO OFF SET THE LEGAL RAMIFICATION DUMPING A NATION