``... the simple fact is that the Fed can sustain the current size of its balance sheet, without inflationary pressures, only to the extent that people (and banks) are willing to sit on idle, low or zero-interest money balances... any exogenous pressure on short term interest rates to even 0.25%, would effectively require the Fed to move back to the pre-QE2 monetary base in order to forestall incipient inflation pressures.''

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