Excellent post. However, how sure are those swap lines? Will they last until needed, or might be gone when the FED decides?
What if the FED ask for something in return to these additional systemic countries that you adding to the list of FED buddies? Last minor point, Chile is not systemic for the region, should not be on your list of additional countries. Cheers, Eduardo

Ricardo, the main problem with your suggested approach for economic development is the lack of massive data compared to what our brain normally processes prior to send us a new guess. It seems that we will keep failing in our task to move our countries to development.

What is clear then is that QE3 has only been effective in increasing bank profits. This was clearly not the stated objective of the program but to spur credit growth. If banks are choosing to keep the money as excess reserves it seems that the logical step is to start reducing the interest on those excess reserves. A little bit of inflation will do the trick of reducing real rates and therefore increase investment and consumption.

If you calculate the ratio of commercial bank loans to total assets held by those banks we are at a 40 year minimun. Banks are too scared to loan, households are unwilling to ask for more loans as they are still deleveraging.