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Fed maintains strong stimulus as U.S. growth stumbles
Yahoo! News ^ | 10/30/13 | Pedro da Costa and Alister Bull - Reuters

Posted on 10/30/2013 11:37:27 AM PDT by NormsRevenge

WASHINGTON (Reuters) - The Federal Reserve extended its support for a slowing U.S. economy on Wednesday, sounding a bit less optimistic about growth and saying it will keep buying $85 billion in bonds per month for the time being.

In announcing the widely expected decision, Fed officials nodded to weaker economic prospects due in part to a fiscal fight in Washington that shuttered much of the government for 16 days earlier this month.

The Fed indicated the recovery in housing had lost some steam, while noting some reversal in a recent spike in borrowing costs.

"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months," the Fed's policy-setting Federal Open Market Committee said. "Fiscal policy is restraining economic growth."

The labor market has shown "some" further improvement, the Fed said, tempering its description after a recent weakening in the jobs figures. It dropped a reference to a "tightening of financial conditions observed in recent months" from its list of risks to the outlook, but many economists stuck with bets for stimulus to stay into next year.

"Until the economic data strengthens, and strengthens meaningfully, I think expectations for tapering are going to remain subdued," said Rishna Memani, chief investment officer at Oppenheimer Funds in New York. "The likelihood of anything happening in December is modest."

Esther George, president of the Kansas City Federal Reserve Bank, dissented against the decision as she has at every FOMC meeting this year, favoring a modest reduction in the pace of bond purchases.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Front Page News; Government; Politics/Elections
KEYWORDS: bernanke; federalreserve; growth; maintains; stimulus; stumbles

1 posted on 10/30/2013 11:37:27 AM PDT by NormsRevenge
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To: NormsRevenge

‘stimulus’ another word for ‘inflation’


2 posted on 10/30/2013 11:38:18 AM PDT by fortheDeclaration (Pr 14:34 Righteousness exalteth a nation:but sin is a reproach to any people)
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“Fiscal policy is restraining economic growth.”


3 posted on 10/30/2013 11:38:47 AM PDT by NormsRevenge (Semper Fi)
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To: NormsRevenge
The US's "strong" 1.7% growth rate has stumbled?

Who knew?

4 posted on 10/30/2013 11:42:56 AM PDT by skeeter
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To: fortheDeclaration
'Stimulus' is also another word for 'magic'. These people apparently believe that strong economies are built by magic. If this kind of thing actually worked, no one would have to roll up their sleeves and get down to hard work. Why sweat building a business? Why worry about profit and loss? Why worry about innovation, productivity, or efficiency? Just keep pumping fake money into the system. What possibly could go wrong?
5 posted on 10/30/2013 11:43:45 AM PDT by fhayek
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To: NormsRevenge
Man, wait until the prime interest rate rises from the 25 basis points (0.25) to, say, 3 or 4%.

Dem banks are goin' ta make some bones.

6 posted on 10/30/2013 11:45:37 AM PDT by Zuben Elgenubi
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To: NormsRevenge

It should be obvious now to everyone that the Democrat’s so-called “stimulus” expense (almost $1 Billion in 2009 )not only did NOT stimulate the economy — it made things worse.


7 posted on 10/30/2013 11:47:06 AM PDT by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: fortheDeclaration

It will eventually. The Left doesn’t seem to understand that printing more money does NOT — and indeed CAN NOT —make everyone wealthier.


8 posted on 10/30/2013 11:48:12 AM PDT by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: fhayek
'Stimulus' is also another word for 'magic'. These people apparently believe that strong economies are built by magic. If this kind of thing actually worked, no one would have to roll up their sleeves and get down to hard work. Why sweat building a business? Why worry about profit and loss? Why worry about innovation, productivity, or efficiency? Just keep pumping fake money into the system. What possibly could go wrong?

What the Fed is doing is economically perverse.

9 posted on 10/30/2013 11:48:37 AM PDT by DallasBiff (Lautenberg The Forefather of "The Nanny State!")
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To: NormsRevenge

“Fiscal policy is restraining economic growth.”

“Fiscal policy is restraining economic growth.”

“Fiscal policy is restraining economic growth.”

“Fiscal policy is restraining economic growth.”

Worth repeating. The Obama Administration’s anti-commerce politics is killing the recovery.


10 posted on 10/30/2013 11:51:13 AM PDT by 1010RD (First, Do No Harm)
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To: DallasBiff

Without question. Let’s look at history. What great economy was built by this kind of ‘stimulus’? Weimar Germany? Zimbabwe? Argentina?


11 posted on 10/30/2013 11:52:51 AM PDT by fhayek
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To: fhayek
Without question. Let’s look at history. What great economy was built by this kind of ‘stimulus’? Weimar Germany? Zimbabwe? Argentina?

And the worst part is that there are "financial planners" who do not know who Ben Bernanke is, and are on this false economy bandwagon.

It's all gonna crash.

12 posted on 10/30/2013 12:04:48 PM PDT by DallasBiff (Lautenberg The Forefather of "The Nanny State!")
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To: fortheDeclaration

Yes, the Fed is printing money to paper over the deficits, as the annual deficits we are running up now exceeds the world’s capacity, and increasingly the world’s willingness, to finance it. So we have to print money to ourselves. By putting it into the bond/stock markets, the Fed is counting on using those markets as “reservoirs” to hold the money out of circulation, which is the only thing keeping us from Weimar Republic-style turbo-inflation. They are creating the next bubble, in fact, they are counting on creating a bubble. When the bubble bursts and goes “poof” all the value disappears, and it’s as though they never printed the money to begin with.

I think that’s the strategy anyway. Looks good on paper, even if its worthless paper.


13 posted on 10/30/2013 12:04:54 PM PDT by henkster (Communists never negotiate.)
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To: NormsRevenge

You can partially re-inflate a bubble if you blow hard enough.

Problem is, you can only exhale for so long...


14 posted on 10/30/2013 12:05:49 PM PDT by Dead Corpse (I will not comply.)
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To: DallasBiff
I think that you are right. How else can it end? And the sad part is, if you like Ben Bernanke, you are going to love Janet Yellen.
15 posted on 10/30/2013 12:10:58 PM PDT by fhayek
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To: DallasBiff
it's all gonna' crash

This actually started with GWB and it's a death spiral. As soon as those interest rates go up to even 2% people will look for safety of FDIC savings. Now that money has nowhere to go. If local economies improved, municipal and state bonds might be better. But for local economies to improve, there has to be job creation and people with savings have to have interest on their savings, which will to a great degree be spent locally.

The thing people don't realize is how little money they actually have in the stock market. The only real money is the cash part. The rest, you have to sell to get the money. If everybody sells the "money" disappears as the price collapses. It's hard to believe, but most people don't know that.

16 posted on 10/30/2013 12:16:38 PM PDT by grania
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To: henkster

The thing is, the fed isn’t printing money. They’re telling government it’s okay to put some magic numbers into the computer, out of thin air, and it’s “spent” for stuff the government can’t afford. Then, for some reason I can’t comprehend, it’s a debt that has to be paid back. Why don’t they just pay the bills and not “pay it back”? Either way, it’s make believe. Except their way, the rich get richer, forever.


17 posted on 10/30/2013 12:20:57 PM PDT by grania
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To: grania

I refered to that in another post as Ben turning our fiscal policy into a video arcade game.


18 posted on 10/30/2013 12:36:50 PM PDT by henkster (Communists never negotiate.)
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To: grania

My gut feeling is that paying for stuff now would equal inflation now. Converting it to debt kicks the can down the road. For those who are not paying attention, kick the can is the new national pastime, at least inside the beltway. Unfortunately, the can is getting larger, and the road is getting shorter.


19 posted on 10/30/2013 12:49:06 PM PDT by fhayek
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To: NormsRevenge

Here is a summary of Fed policy for the foreseeable future:

They’re gonna print.
Then they’re going to print some more.
Then they’re gonna print.
Then they’re going to print some more.
Then they’re gonna print.
Then they’re going to act like they’re not going to print, but they’ll print.
Then they’ll print some more.
And just when you thought that surely they couldn’t print anymore, they’re gonna print.
They’re going to print until their fingers are worn to nubs.
They’re going to print until their eyes bleed.
They’re going to print to wake the dead and to make the banshee wail.

Because they have nothing else.


20 posted on 10/30/2013 1:17:33 PM PDT by RKBA Democrat ( There is no worst president but owebama, and valerie jarrett is his prophet.)
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To: NormsRevenge

We are in a recovery in the same way the problems with obamacare are just a website glitch. We are in a depression and anyone saying otherwise is a liar.


21 posted on 10/30/2013 1:47:03 PM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: BenLurkin

Wasn’t it 980 Billion?


22 posted on 10/30/2013 1:54:41 PM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: fhayek

The can today weighs 20 times what the foot weighs... this will end up with the foot that kicks the can... breaking bones.


23 posted on 10/30/2013 2:01:28 PM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: LibLieSlayer

Good point == close to $1 Trillion.

Showing my age. Billion used to seem like a lot of money.


24 posted on 10/30/2013 2:30:54 PM PDT by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: BenLurkin

I no longer talk about age... it is just too painful! ;-)


25 posted on 10/30/2013 3:49:35 PM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: BenLurkin

A trillion... which is so much it truly boggles the mind... seems like a small amount these days... you know... pocket change for celebrities.


26 posted on 10/30/2013 3:50:29 PM PDT by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: NormsRevenge

Can we bury Keynesian economics once and for all now?


27 posted on 10/30/2013 3:52:00 PM PDT by Fledermaus (Primary and beat the RINO's.)
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To: fhayek; fr_freak
These people apparently believe that strong economies are built by magic.

Snort. These people believe no such thing. LOL. What they DO believe is that monetization serves as a very effective mechanism for their continued looting operations. And they couldn't be more right; after all, the proof is in the pudding.

They couldn't possibly begin to give a sh!t about maximum economic output, aggregate productive utility, or any other host of cover stories foisted on clueless sheep to rationalize their actions.

One of the best things about Obamacare, is that it's in many ways a mirror image of the war-on-drugs: an incredible, wealth destroying mechanism that transfers savings & capital to chosen cronies who reap immense profits from bid rigging & insider trading while providing associated "services" and "equipment".

I'm not sure when we transitioned to this universal con game, but we're so far gone at this point that I cheer on all efforts at keeping the game alive. There are so many ways to make money in these kinds of corrupt markets, it almost boggles the mind.

28 posted on 10/30/2013 4:02:00 PM PDT by semantic
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To: All

the only real question is, after the crash, how many months of food and supplies have they stashed in the bunkers to hide the politicians from the proletariats with pitchforks?


29 posted on 10/30/2013 8:01:45 PM PDT by willywill
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To: fhayek; NormsRevenge
Flight. Into. Real. Goods.
30 posted on 10/30/2013 9:17:53 PM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
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To: Fledermaus; fhayek

31 posted on 10/30/2013 9:18:43 PM PDT by 4Liberty (Some on our "Roads & Bridges" head to the beach. Others head to their offices, farms, libraries....)
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To: Zuben Elgenubi

“Dem banks are goin’ ta make some bones.”
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

Dey ain’t gonna make no bones when ain’t nobody got no bones to givem.


32 posted on 10/31/2013 5:27:07 AM PDT by RipSawyer (The TREE currently falling on you actually IS worse than a Bush.)
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To: RipSawyer

Dey gonna bone us, fer sure, Rip.


33 posted on 10/31/2013 10:23:30 AM PDT by Zuben Elgenubi
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To: Zuben Elgenubi

https://www.youtube.com/watch?v=pYb8Wm6-QfA


34 posted on 10/31/2013 5:03:22 PM PDT by RipSawyer (The TREE currently falling on you actually IS worse than a Bush.)
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To: grania

“It’s hard to believe, but most people don’t know that.”
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////

A few years ago when we kept hearing about Bill Gates eighty billion dollar fortune I tried to explain to someone that it was not real because most of it was in Microsoft stock and if Gates had started to sell more than a very small percentage at one time the price would have crashed. I couldn’t get the point across. Many people really cannot differentiate between real wealth and money in an age when American money is essentially a number and nothing more.


35 posted on 11/01/2013 5:17:53 AM PDT by RipSawyer (The TREE currently falling on you actually IS worse than a Bush.)
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To: RKBA Democrat

And the way they do it you can’t even get rich by selling all that ink and hundred percent rag for all that money that, in the words of Gerald Celente, “Is not worth the paper it’s NOT printed on.”


36 posted on 11/01/2013 5:21:25 AM PDT by RipSawyer (The TREE currently falling on you actually IS worse than a Bush.)
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To: henkster
When the bubble bursts and goes "poof" all the value disappears, and it's as though they never printed the money to begin with.

That's the good news. The bad news is Federal interest payments will rise from 2% now to 10% or more. That means we will pay a trillion instead of 200B for interest which suck down 1/2 or more of tax revenue since that revenue will plummet.

A second bit of bad news is most major banks struggle or croak since their carry trade income goes away along with the mortgage machine money. But that's good in the long run.

37 posted on 11/01/2013 5:29:44 AM PDT by palmer (Obama = Carter + affirmative action)
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To: grania
Then, for some reason I can't comprehend, it's a debt that has to be paid back

Not really, it's bits in a spreadsheet at the Fed. If they sold that debt the market would tank and interest rates would skyrocket. So they are not going to do that. The end game is default. Americans will get to start over.

38 posted on 11/01/2013 5:33:00 AM PDT by palmer (Obama = Carter + affirmative action)
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To: palmer
it's bits in a spreadsheat at the Fed.

That's my point. It's just a computer invention. Why sell it to anyone? Why not just press the "delete" button? The Fed is a private enterprise owned by mysterious zillionaires. They'd still be zillionaires, and we wouldn't have the debt.

39 posted on 11/01/2013 6:02:25 AM PDT by grania
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To: RipSawyer

I have a hypothetical question. Let’s say there ever is a banking crisis and the government got creative with savings. Would a certain amount of money be safe as the cash part of a stock account?


40 posted on 11/01/2013 6:06:41 AM PDT by grania
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To: grania

I think they are trying to maintain the illusion of competence.


41 posted on 11/01/2013 7:04:59 AM PDT by palmer (Obama = Carter + affirmative action)
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To: grania

I have no idea what the answer to that might be.


42 posted on 11/01/2013 12:35:45 PM PDT by RipSawyer (The TREE currently falling on you actually IS worse than a Bush.)
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