Posted on 03/19/2009 9:49:18 AM PDT by NEWSHOUND
Like a magician who diverts our attention to his right hand while the trick is being performed with his left, the government continues to blow smoke about the AIG bonuses while the Federal Reserve produces money out of thin air.
Yesterday the Fed moved to buy 300 billion dollars worth of longer-term Treasury securities in order to 'drive interest rates for home loans even lower'. This is the first time in 50 years that the Federal Reserve has purchased Treasury securities (although back then it was for different reasons). But since the credit markets still remain essentially frozen, driving down the interest rates for home loans seems a bit superfluous. After all, if you can't get a loan, who cares what the interest rate is?
(Excerpt) Read more at myecon101.blogspot.com ...
just how much money is actually out there? every bill could be considered a share in the US.... and pushing out 1 trillion more shares will dilute the shareholders.
so the question is... how much did i just get diluted?
$300 Billion ain't the half of it...
US Federal Reserve plans $1.15 trillion injection
In a development which mirrors recent actions by the Bank of England, America's central bank will buy $300bn of US government securities in an attempt to pump more funds into the economy by monetising its own debt.The Federal Open Markets Committee (FOMC), chaired by Ben Bernanke, also said that it plans to buy up to $750bn of additional agency mortgage-backed securities, on top of $500bn already committed, and double the agency debt it plans to buy this year from $100bn to $200bn.
Not sure how many total ‘shares’ are out there, but the Fed just utilized their Doomsday option. Their only recourse is to continue to dilute the market as they drive away other prospective buyers. Somehow I don’t relish $50 a gallon gas and $20 a loaf bread, but that’s just me. Hyperinflation here we come. Maybe we should invest in wheelbarrows. We’ll need them to haul around all the money it will take to do the grocery shopping.
Bingo.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.