How The Fed Is 'In A Box' In Terms Of Creating Sound Collateral - Seeking Alpha

How The Fed Is 'In A Box' In Terms Of Creating Sound Collateral - Seeking Alpha

This is my newest article on Seeking Alpha. It is exclusive to Seeking Alpha and it explains the process by which the Fed creates good collateral in exchange for bad collateral. Good collateral is scarce, and bad collateral does very bad things to bank lending, interbank lending, and ultimately the economy. 

But the banks are still loaded with toxic collateral, and their weakness and fear of risk is causing main street to wither. Their profits come from speculation, which further hurts main street.

The Fed has failed, and now we are facing a Great Depression if something does not change. The worst case is a slow growth world, with not enough money on main street. That is a best case scenario. 

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