With Rates Near Zero, What Will Fed Do Next? (Buying long term treasuries=printing money)

cnbc/reuters ^ | 1/25/09

[Toddsterpatriot]

MY GOD MAN! That's IT? Really?

Yes. How did you think they did it?

I really want to know. Take your time.

[Lurker]

What did the Treasury create when the Fed bought all that commercial paper

Worthless paper. Next question.

How much interest does the Fed owe every year on those FRNs?

None.

What do I win?

[Toddsterpatriot]

What did the Treasury create when the Fed bought all that commercial paper

Effectively Federal Reserve Notes.

Effectively? They didn't buy the commercial paper with stacks of $100s. Sorry.

My point was that the Fed just can't create money--it must do so with the Treasury.

Your point is wrong.

How much interest does the Fed owe every year on those FRNs?

Theoretically nothing

Theoretically? LOL!

until people come into to demand physical currency for their electronic or deposited currency and the Fed can't give them any.

The Fed could, given enough time, so what? The Fed pays 0% on FRNs.

[Lurker]

Yes. How did you think they did it?

It's very simple really. They lie.

And idiots like you buy their lies.

Is that about right, Pookie?

L

[Captain Peter Blood]

Ask yourself this question. How did the Fed expand it's balance sheet from $1 Trillion to over $2 Trillion in Two Months????????????????
The Federal Reserve literally creates Fiat Money, money back by nothing ,out of thin air on a computer. That is the printing press they are using.
Now The Fed wants to start buying Long Term Treasuries to try and control the Price to keep interest rates low.
This cannot and will not work.
The Fed cannot become the end all to prop up that which it can't namely the Banks and Insurance companies that have too much bad debt on their books. Sooner rather than later the whole thing implodes.

[Toddsterpatriot]

It's very simple really. They lie.

What does the Federal Reserve lie about when they create new money?

[Toddsterpatriot]

When you write a check to pay your phone bill, how do you think the money leaves your account and gets into the phone company account?

If a bank in New York wires money to a bank in California, how do you think the money changes hands?

[rb22982]

Effectively? They didn't buy the commercial paper with stacks of $100s. Sorry

The majority of it came from deposits at the FR which have soared in the last year, some was printing (which would still probably be stored at the Fed) and sent eletronically, and yes they could have just made an entry electronically (which is callable for physical currency and dangerous)

The Fed could, given enough time, so what? The Fed pays 0% on FRNs

US government would collapse long before they'd be given time. Even the Fed isn't immune from a bank run. A hell of a lot safer than the member banks but the more bad assets they take on the more they risk. You are obviously long the market still and think the Fed is going to make everything OK despite the fact that nothing they have done has made the situation better. Good luck & good night.

[Toddsterpatriot]

The Federal Reserve literally creates Fiat Money, money back by nothing ,out of thin air on a computer.

He can't handle the truth. Plus, he's not too bright.

[Sam Cree]

#

[Toddsterpatriot]

and yes they could have just made an entry electronically

Quick, tell Lunkhead.

[DuncanWaring]

How do Fed wire transfers work?

You put money in at one end, it comes out the other.

That’s like responding to a question of “Where does food come from?” by asking “Do you understand trucks?”.

Where does the money come from to “put in at one end”?

Considering the nonsensical answers you’re cranking out here, you must have an MBA.

[Lurker]

How did the Fed expand it's balance sheet from $1 Trillion to over $2 Trillion in Two Months????????????????

We let them. That's how.

The Federal Reserve literally creates Fiat Money, money back by nothing ,out of thin air on a computer.

Yep. See our philosophically impaired friend Toddsterpatriot's posts for confirmation.

That is the printing press they are using.

Actually printing money is soo.....old fashioned. Now they do it with an Excel Spreadsheet. Thanks to our friend Toadster.

Now The Fed wants to start buying Long Term Treasuries to try and control the Price to keep interest rates low.

That's the game. Heads they win, tails we lose.

This cannot and will not work. M

Of course it can't Only an idiot (yes, I mean you Todd) would believe it could.

Sooner rather than later the whole thing implodes.

On our side there's us, Von Mises, Friedman, and Hayek. On SpasterPatriots side there's.....well there's him.

Bless his heart...

L

[Toddsterpatriot]

So you don't know either? You must be friends with Lunky.

Considering the nonsensical answers you’re cranking out here,

Why don't you tell Lunkhead how the Fed creates money?

[DuncanWaring]

This guy sounds like the economic equivalent of the late unlamented “Robert Paulsen”.

[Toddsterpatriot]

Glad you recognized I was correct.

That's two clowns I helped today.

[DuncanWaring]

How the fed creates money? They just type numbers into a computer screen and -Poof- there it is.

Not that that’s a good thing.

[Toddsterpatriot]

How the fed creates money? They just type numbers into a computer screen and -Poof- there it is.

Poor Lunky still doesn't understand. Still takes the short bus to school.

[DuncanWaring]

When I write a check to pay my phone bill, the money has to be there in the account to cover it.

I can’t just type “$825,000,000” into Quicken and expect to have checks written on that money honored.

[Toddsterpatriot]

When I write a check to pay my phone bill, the money has to be there in the account to cover it.

I agree. How does the money get to the phone company?