Posted on 04/26/2011 11:52:38 PM PDT by Scanian
The Federal Reserve likely will make life more difficult for Congress this week by affirming the June end of its controversial $900 billion bond-buying program that has financed a large part of the government’s record $1.6 trillion budget deficit this year.
The move to force the Treasury to find other buyers for the nation’s burgeoning debt comes even as Fed Chairman Ben S. Bernanke seeks to allay criticism in Congress of the Fed’s secretive ways by holding a first-ever news conference Wednesday to discuss its decisions after a two-day meeting.
The hoopla over the press conference in the run-up to the meeting appeared to overshadow the likely end of the much-criticized program to try to boost the economy by driving down long-term interest rates with Treasury securities purchases.
But analysts say the Fed’s move will trigger a significant reckoning for legislators and an administration that has gone on a debt-financed splurge of spending and tax cuts since 2008.
Euler Hermes economist Daniel C. North said the Fed’s plans are even more foreboding for Congress than the warning legislators got last week from Standard & Poor’s Corp. that the United States could lose its coveted AAA credit rating if it doesn’t move quickly to rein in the budget deficit
(Excerpt) Read more at washingtontimes.com ...
There have been no "tax cuts since 2008."
There has only been the avoidance of a tax increase. That’s a horse of a different color.
Well, they could always get the rich ‘Rats to buy them.
You gotta love how the definition of a “tax cut” is now the absence of a tax increase, rather than an actual reduction in tax rates.
That’s what the ‘rats can’t seem to understand. If every “rich” person in America-—let alone rich lefties-—had their liquid assets confiscated by the government, we couldn’t come close to balancing the budget.
Cutting back spending is the only way to go.
You mean like the legendary “Bush tax cuts” which haven’t really been “cuts” in 10 years?
They just could not get Vampire-Care off and running fast enough. Backfired (temporarily), too many bribes, too many concessions.
Next up: vat, 401Ks, etc.,?
I think his speech will be like Obamas....saying a whole lot about what we already know and nothing at all about what we should know....at best it’s a PR move to say the Fed is engaged with the people.
Argentina snatched their equivalent of the 401K a couple years ago. Just snagged the people’s money-—poof!
About the same time that Hillary met with Cristina Kirschner.
I wouldn’t be surprised to see Obama try something similar, especially if he thinks re-election is hopeless. Then he’ll freak out beyond all control.
Just as he will if he manages to win a second term.
IMHO.
China annonced Sunday they will trim down the Chinese central bank expsoure to Treasuries and Agencies, Japan had made quieter but just as serious overtures as the BoJ tries to stabilize the Japanese economy.
Now the private bankers who control the Federal Reserve plan to stop buying treasuries.
The IRS is actively hounding Cayman Island holding corporations, making it less likely for them to continue to buy Treasuries and Agencies.
The UK Exchequer and banking sector is in a horrible debt trap itself.
That leaves what entity on earth that can afford to finance the US Federal budget?
Looks like some off planet pawn broker is going to show up and offer 50 cents on the starbuck to pick up most of a continent on the planet Earth. He’s going to have to clean it up and it’s going to sit on the shelf for years before he can sell it though.
Obama only knows the welfare state and he admits it treated him well. Therefore, what else can he do but surround himself with like minded and advance his idea of America, this time on steroids.
In truth, they made the pension managers convert all the assets to Argentine bonds. Argentina's inflation rate runs 20-30%. They also made those managers liquidate all overseas holdings, repatriate pesos.
A cutback by the Fed should lead to immediate interest increase?
yitbos
RE> A cutback by the Fed should lead to immediate interest increase?
My first thought also. If true, the question is how much, how fast. Which leads to couldn’t that also mean a short term break in metals as some shed them to buy higher interest bearing bonds(?) providing a metals buying opportunity? I am praying for this scenario in a really big big way, because I can’t stand the thought at buying it at it’s all time highest point.
I wonder what the rating is of those “poofy” bonds?
Suppose the ending of QE really does "derail the economy." But isn't QE driving up the price of oil (and other things) as reckoned in dollars? And the price inflation on oil is likely to derail what little real growth is going on in our economy.
We are long overdue in taking our medicine. And the longer we wait, the worse it will be.
“We are long overdue in taking our medicine”
Yes, and we have a witch doctor giving it to us.
One scenario I envision is that a massive hike in interest rates may actually stabilize the housing market here. A home with a long-term mortgage at 5.5% suddenly looks like a very attractive place to live. The mortgages themselves become valuable assets to the home buyers.
So slowly pulling funds out of our 401Ks and buying silver (and/or ammo) would be prudent, or a gross over-reaction?
SS taxes were cut this year. Compare your paychecks.
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