The Comedian's "Economic Holocaust" ping list...
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Posted on 01/18/2011 7:27:01 AM PST by FromLori
If you're wondering what happens if The Fed abandons QE2, the following should put it in stark relief:
Monthly net TIC flows were $39.0 billion. Of this, net foreign private flows were $79.8 billion, and net foreign official flows were negative $40.8 billion.
Yuck.
Here's the problem - this entire ramp job is nothing other than monetization. And while this feels "real good", the question is always sustainability.
Anyone who believes that The Fed will be able to continue to monetize forever, and that prices will thus rise forever, and will not decline back to their actual risk-adjusted return and price once that buying stops, either by choice or force..... well..... you're rather deluded.
Foreign governments have got it figured out, and they're slowly slinking through the door, hoping you don't notice.
Who's the sucker again?
“There are suckers born every day” <<- (some famous economist)..
Here is a little factoid I ran across this morning on how the Fed is monetizing Municipal Bonds.
The US Treasury is buying Municipal Bonds and then the Treasury sells those bonds to the Federal Reserve under QE2.
By doing the transaction in this manner, Bernanke can say that the Fed will not bail out the states.
Here is the story from the Utah Housing Corp press release in November 2010—
“””Utah Housing Corporation announced the closing of a $107 million bond sale that provided 30-year fixed rate mortgage loans for over 700 low- to moderate-income families to purchase their first home. Borrowers applied and were qualified at approximately 250 different Utah branch offices of banks and mortgage companies.
These lenders sold the loans to Utah Housing, exhibiting a successful 33 year long public/private partnership. The $107 million bond sale was Utah Housing’s largest in over two decades. Utah Housing sold $39 million bonds to the US Department of Treasury along with $68 million to the open markets.”””
http://b2b.utahhousingcorp.org/PDF/PR_2010_11_09.pdf
We need either a free-market economy (haven't tried that in over 100 years) or else something completely new. Lately I've had some interest in Distributism. Other than the free market, it appears to be the only economic system that warrants a good look.
Thanks for posting that I hope everyone takes a look at it you should post it as it’s own thread so people see the sneaky ways they go about doing these things. It never ends the more you dig around the more dirt you find that gets little attention from the MSM.
I had to look that up very interesting.
The global marketplace presents serious problems, IMO. It is not at all clear to me how American workers, with their posh suburban lifestyles, can compete against people in third world countries who can do virtually the same work. Or, if we automate everything, I don't see how we can sustain 300 million citizens, almost none of whom have to "work" because the machines do virtually everything.
As the 21st century unfolds, I think Capitalism and Socialism are both on shaky ground. I don't know if Distributism is worth serious thought, but some of its proponents say that it is the most moral economic system, and some say it has the potential to be the strongest economic system.
I'm trying to keep my eyes open.
I thought about posting the Utah Housing Corp Press Release on its own thread, but I recall the FR leadership frowns upon posting stories that are old.
Since you post more than I do, you may know the protocol.
Thats news to me I didn’t know they frowned upon that. I see older story’s a lot of times. I did a title search and it didn’t show up. I guess I don’t know the protocol lol sorry.
I hear on Fox that Americans can now get Chinese Yuan at one American bank.
Depositors can trade up to $4000 in Benjamins for an equivalent quantity of Mao’s per day ($20,000 annual limit)
Non-depositors half as much.
Thanks for the link, but those bonds aren't financing a city or state.
The US Treasury is buying Municipal Bonds and then the Treasury sells those bonds to the Federal Reserve under QE2.
The Fed isn't buying bonds from the Treasury. Also, the only Mortgage Bonds they buy are guaranteed. I didn't see anything about these bonds having a guarantee.
By whom?
Here is a little factoid I ran across this morning on how the Fed is monetizing Municipal Bonds.
Thanks for the link, but those bonds aren’t financing a city or state.
The US Treasury is buying Municipal Bonds and then the Treasury sells those bonds to the Federal Reserve under QE2.
The Fed isn’t buying bonds from the Treasury. Also, the only Mortgage Bonds they buy are guaranteed. I didn’t see anything about these bonds having a guarantee.
In response to your comments:
I believe the Utah Housing Corporation is an entity of the State of Utah. Correct me if I am in error.
If the US Treasury buys bonds issued by the Utah Housing Corporation, then where does the US Treasury get the money to buy these bonds if not from the Federal Reserve?
Please explain.
Fannie Mae, Freddie Mac, and Ginnie Mae.
An entity which finances affordable housing. Correct me if I am in error.
If the US Treasury buys bonds issued by the Utah Housing Corporation, then where does the US Treasury get the money to buy these bonds
The Treasury sells Treasury bonds. Not to the Fed.
Technically correct I suppose. They're buying Treasury Bonds from Goldman Sachs instead of directly from the Treasury. Gotta get that cash into the hands of GS so it can be returned to politicians in the form of campaign donations somehow.
You suppose? Is it incorrect somehow?
They're buying Treasury Bonds from Goldman Sachs instead of directly from the Treasury.
Or from any of the other Primary Dealers.
Gotta get that cash into the hands of GS
Yeah, because Goldman could never sell Treasuries on the open market. LOL!
Oh dear, did someone say abandon ship?
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