The world’s debtor countries are finally coming to realize that many government debts can’t be paid – except by throwing their economies into depression and austerity. Obviously there needs to be an alternative.
So, who is responsible for this fiasco? Or for the last one? Or the next?  Any reasonable person can see that the present system is untenable.
It is up to academics and informed lay-people alike to alter the understanding of banking in the public consciousness.
It may surprise you to know that the banking sector is one of the most regulated industries in the United States.
The US financial system is extremely complicated and this series sheds light only on some corners of that system by focusing on the banking sector.
While details in operating procedures have changed through time, the federal funds rate has progressively gained in importance as a relevant operating tool since the 1920s.
Now that we have an understanding of how the balance sheet of the Fed works, it is possible to go into the details of how the Fed operates in the economy in terms of monetary policy.
Part 1 reviewed basic balance-sheet mechanics. This post begins to apply them to the Federal Reserve System (Fed).
If you cannot put your reasoning in terms of a balance sheet, there is a problem in your logic.