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Article Abstract

MONEY FOR NOTHING IMAGE1 In the three months through August, the Swiss National Bank conjured new francs at an annual rate of 187%. The gnomes have apparently dropped the third money-printing shift, however, as the three-month growth rate in franc production in September dwindled to 80%. Still, according to news reports, the Swiss have managed to amass the world's fifth-largest portfolio of foreign exchange reserves. These colorful pieces of paper the Swiss invest in alternative pieces of paper representing, for instance, equity interests in Orell Fuessli Holding AG, itself a money-printing enterprise, and Nokia, along with debt securities denominated in euros, U.S. dollars, yen, sterling, Canadian dollars and "others." Has some insubordinate gnome built a secret position in Argentine pesos in silent protest against the SNB's adventure in radical credit creation? Standard & Poor's says it believes the SNB's forex operations are distorting yields in the euro zone--at the very least, we would add. Not that all central banks are on the same policy page. FEDERAL RESERVE Bank credit is contracting, as presented in the table to the right, though it will presently resume its QE3-empowered growth. Giving effect to yet unsettled mortgage-backed securities purchases, according to Bloomberg (check IPASCBMB Index), the earning assets of the Bank of Bernanke, measured over a span of three months and annualized, were growing by 5.8% on Nov. 7 after having shrunk at a 0.4% rate on Oct. 10. "As for the People's Bank of China," relates colleague Evan Lorenz, "it was expanding its ...

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