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A comment on The ballooning money supply may be the key to unlocking inflation in the U.S.. Parent comment

Re:The ballooning money supply may be the key to unlocking i... by darawk on Tuesday October 13, 2020 @05:50PM (#24770726)
Sure, there are limits. But fundamentally, holding all else constant, increasing bank reserves decreases the cost of lending, which increases the quantity of lending, which increases the money supply.
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Re:The ballooning money supply may be the key to unlocking i... by neilwilson on Friday October 16, 2020 @09:19AM (#24800520)
"increasing bank reserves decreases the cost of lending"

Only if there is a net margin between what the central bank pays on reserves and what the bank has to pay out on the matching deposits.

Once central bank renumeration gets low, the cost of unsecured deposits matches or exceeds the central bank remuneration because of the draw to cash.

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Re:The ballooning money supply may be the key to unlocking i... by RobertoG on Tuesday October 13, 2020 @06:14PM (#24770932)
Not when the interest rate is 0% From then on, any increase in reserves doesn't make borrowing more attractive.
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Re:The ballooning money supply may be the key to unlocking i... by darawk on Wednesday October 14, 2020 @01:39AM (#24773463)
When it is actually 0%, yes. But it is currently not 0%.
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