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Fed to buy up to $300B long-term Treasury bonds
AP via Yahoo News ^
| March 18, 2009
| Jeannine Aversa
Posted on 03/18/2009 12:33:21 PM PDT by TenthAmendmentChampion
WASHINGTON (AP) -- The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt.
At the same time, the Fed left a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most -- if not all -- of next year.
Fed purchases should boost Treasury prices and drive down their rates. That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s.
(Excerpt) Read more at finance.yahoo.com ...
TOPICS: Breaking News; Business/Economy; Government; News/Current Events
KEYWORDS: bernanke; china; inflation; thecomingdepression; treasury
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To: TenthAmendmentChampion
61
posted on
03/18/2009 1:37:08 PM PDT
by
org.whodat
(Auto unions bad: Machinists union good=Hypocrisy)
To: kitkat
The Federal Reserve (which is allowed to make money out of thin air, or destroy that same money) decided to create a new $300 billion dollars and use that to buy up debt from the Treasury. It may be related to the recent story about China backing away from buying Treasuries at the same furious pace they had been buying them.
It’s not clear what will happen when the economy turns around and Treasuries aren’t as attractive. It’s likely interest rates will have to go up.
I read a comment at Market Watch that the Chinese are buying short term notes hoping that the next set of bonds will pay higher interest rates and they won’t be on the hook for years. Heaven help us if they redeem their bonds and don’t buy new ones!
62
posted on
03/18/2009 1:37:25 PM PDT
by
TenthAmendmentChampion
(Be prepared for tough times. FReepmail me to learn about our survival thread!)
To: kitkat
"What is meant by: ***WASHINGTON (AP) The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds...***?" It means that the Federal Reserve (a private bank neither 'federal' nor with any 'reserves') makes an accounting entry on it's books to 'create' cash and equity (a big no-no if you or I tried it). The Fed then uses this 'cash' to buy U.S. Treasury Notes (backed by taxes payable by you and me) and collects both interest and principal on money it 'created' out of thin air.
Also see 'debt monetization' on Wiki.
Welcome to the United States of Zimbabwe.
63
posted on
03/18/2009 1:43:33 PM PDT
by
GourmetDan
(Eccl 10:2 - The heart of the wise inclines to the right, but the heart of the fool to the left.)
To: theruleshavechanged
Thats an outrage! Can we talk about this instead of AIG?Can we talk about $180 BILLION AiG instead of beating on 73 employees who happened to get retention bonuses of $165 million as incentive to hang in there while the beatings continue! Heh, but your point is spot on....the 'journalist' who 'keyed' on the 300 instead of the real news was definitely math challenged.
64
posted on
03/18/2009 1:46:43 PM PDT
by
CRBDeuce
(here, while the internet is still free of the Fairness Doctrine)
To: kc8ukw
Yep. it has been said that this thing would be deflation followed by inflation, followed by hyper-inflation. Well, this move begins the “inflation”phase.
65
posted on
03/18/2009 1:48:15 PM PDT
by
RobRoy
To: TenthAmendmentChampion
I’m no economist. Where does this 300B come from?
66
posted on
03/18/2009 1:49:57 PM PDT
by
Mr Rogers
(Obama - Making Jimmy Carter look like a giant!)
To: April Lexington
If you want to be more rattled, go read the comments on marketwatch. I posted the correct link in my #19.
Scary stuff. Stock up on canned goods.
67
posted on
03/18/2009 1:54:39 PM PDT
by
Ghost of Philip Marlowe
(The Stimulus Package: Preamble to the Democrat's new Declaration of In Dependence)
To: Beelzebubba
68
posted on
03/18/2009 1:55:18 PM PDT
by
Publius
(The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
To: DuncanWaring
Oh, I got your joke.
But this printed money is about as ‘valuable’ as that piece of cardboard. But, of course, the Feds can issue a piece of cardboard at 75% interest. That was my addition to the joke :)
69
posted on
03/18/2009 1:55:56 PM PDT
by
Ghost of Philip Marlowe
(The Stimulus Package: Preamble to the Democrat's new Declaration of In Dependence)
To: cgk
To: TenthAmendmentChampion
So....just tell me when they are planning on stealing our 401ks and IRAs to help float the Treasury debt. Oh don't worry, they'll pay us back eventually, interest included. (And if you believe that I have some swampland in Chicago to sell you.)
71
posted on
03/18/2009 2:00:21 PM PDT
by
444Flyer
(Don't beLIEve Obama.............................Never give up, never give in, never give out!)
To: GourmetDan
To: Publius
Is that photoshopped, or a real photograph? I could imagine that maybe right after 9/11 some poor gas shop owner freaked out and did that.
73
posted on
03/18/2009 2:18:36 PM PDT
by
kc8ukw
To: kc8ukw
Photoshop. One of my very favorite photoshopped pictures.
74
posted on
03/18/2009 2:19:28 PM PDT
by
Publius
(The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
To: TenthAmendmentChampion
This move is a dead giveaway. The Chinese have reduced the limit on America’s credit card and the Fed is stepping up to the plate to prevent the roof from caving in. We are at the edge of the abyss.
75
posted on
03/18/2009 2:24:14 PM PDT
by
mojitojoe
( Idiots elected a Marxist ideologue with narcissistic personality disorder & America is dying.)
To: politicket
76
posted on
03/18/2009 2:25:56 PM PDT
by
444Flyer
(Don't beLIEve Obama.............................Never give up, never give in, never give out!)
To: silverleaf
After market report on CNBC rates are headed for “low 4’s”
77
posted on
03/18/2009 2:26:28 PM PDT
by
happydogx2
(Some trust in horses, some trust in men, but my trust is in the Lord Almighty!)
To: 444Flyer
78
posted on
03/18/2009 2:28:15 PM PDT
by
politicket
(1 1/2 million attended Obama's coronation - only 14 missed work!)
To: jarofants
No, it's like shooting dice with your wife and instead of paying her when you lose, you take out a 20-year loan at 75% interest and then make your children pay.
79
posted on
03/18/2009 2:31:15 PM PDT
by
Ghost of Philip Marlowe
(The Stimulus Package: Preamble to the Democrat's new Declaration of In Dependence)
To: politicket
80
posted on
03/18/2009 2:37:52 PM PDT
by
444Flyer
(Don't beLIEve Obama.............................Never give up, never give in, never give out!)
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