Posted on 01/11/2010 7:40:33 PM PST by FromLori
In the current hodge podge of abstract finance, it is easy to get lost in the numbers and lose sight of the forest for the trees. Which is why we provide the ultimate simplification: In calendar (not fiscal) 2009, the US grew its budget deficit by $1.47 trillion. In the same time, the Federal Reserve grew its securities holdings from $500 billion to $1.85 trillion, a $1.34 trillion increase. Keeping it simple: 91% of the budget deficit increase in 2009, under the authority of President Obama, was funded by the... United States.
(Excerpt) Read more at zerohedge.com ...
Please ping the brain trust. My head hurts.
ping
In other words, the Federal Reserve just printed money.
They signed a promisary note for us all.
Absolute rubbish. It’s a lot like saying “Pizza Hut increased its orders of cheese by 10 tons this year, Crappy Dairy increased its cheese production by 8 tons; therefore Crappy Dairy must have supplied 80% of Pizza Hut’s new cheese intake.” Totally false, of course, as Pizza Hut could have purchased its cheese from anyone, and Crappy Dairy could have sold its cheese to anyone. Here, the Fed bought securities — but they didn’t buy treasuries, for the most part. They bought banks, insurers and GM. That’s what the bailout was all about.
In other words they monetized the debt.
And the banks bought the treasuries then?
Which is exactly what they said they wouldn’t do.
Welcomen zu dem Wiemar Republik aus Obama! Verkaufen geld!
The banks “bought” the treasury bond and then immediately sold them to the Federal Reserve.
Unfortunately, we have no idea of the nature of the securities purchased by the Fed, so the graph of the U.S. deficit and the size of the Fed’s security holdings is essentially meaningless.
Indeed, it would be nice to know what securities the Fed holds, if only to know how much of the U.S. deficit the Fed is monetizing.
That’s why Congress needs to pass a bill requiring the Fed to be audited. Now there’s some real finance reform, and you’ll never see it as long as the leftists are in charge.
Worse, they took money from our grandchildren so they wouldn’t have to cut any of their pet projects, lay off any worthless unionized government workers, or get rid of any redundant and worthless government agencies.
Uh, just where are they getting the money; and why are they funding that great a percentage?
Yes, its truly tragic that the Fed doesn't report to us on its public website every month how much it owns in Treasury Debt. Oh ... wait ... sorry ... that IS publicly available on the web.
http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab2
That’s why Congress needs to pass a bill requiring the Fed to be audited.
Yes, its tragic that outside auditors don't look at the Fed's books every year, and the that the Fed does not issue a report every year detailing their audited financial statement. Ooops ... dang it! That's on the web too!
http://www.federalreserve.gov/monetarypolicy/files/BSTFRcombinedfinstmt20072008.pdf
>> They signed a promisary note for us all.
Not so much for you and me as for our kids, grandkids, great-grandkids... don’t know how many generations to include because I don’t know how the trajectory of debt will pan out.
Is the open market activity audited?
Oh no Lori, not another devestating article.
Mea Culpa or something like that sorry CPT Clay I’ve been that way ever since my days at Ft. Benjamin Harrison.
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