venetianphoenix

How has the advent of LARP and Cosplay impact your research for your book or did you try to veer away from that and stick strictly to the original and its immediate variants?

Hello Professor,

Can you explain in laymen's terms how the Federal Reserve intends to off load its balance sheet of bonds & securities, and handle the excess reserves without causing inflation to rise substantially? I hear this complaint a lot from seemingly well-educated individuals, but I can't seem to figure out how the Fed (with such a diverse portfolio) is under pressure to offload its assets in a manner that would cause inflation.

Thank you for your time!

We agree that inflation is low and that QE has been a good thing in the face of non-existent fiscal policy, but in the mid-to-long term, the argument I am hearing from the more finance minded, is that when the Fed stops QE3, and begins to raise rates, there's some problem with both the Fed's policy of paying interest on excess reserves and their offloading of the assets they've been buying because they will A. have to do so at a loss and B. will somehow cause inflation. I guess where I'm uncertain and looking for some guidance (seeing as how I'm not yet an economist) is on a couple of points: Is the Federal Reserve under any pressure to offload its assets as interest rates slowly rise? Will the Fed suffer any serious losses that taxpayers would have to recoup when they do deleverage themselves? If there is pressure on the Fed to get rid of the securities and bonds, what impact could that have on inflation?