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RBS Tells Clients To Prepare For "Monster" Money Printing By The Federal Reserve
The Telegraph (UK) ^ | 6-27-2010<b> | Ambrose Evans-Pritchard

Posted on 06/27/2010 8:20:46 PM PDT by blam

RBS Tells Clients To Prepare For "Monster" Money Printing By The Federal Reserve

As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve.

By Ambrose Evans-Pritchard
Published: 5:11PM BST 27 Jun 2010

Entitled "Deflation: Making Sure It Doesn’t Happen Here", it is a warfare manual for defeating economic slumps by use of extreme monetary stimulus once interest rates have dropped to zero, and implicitly once governments have spent themselves to near bankruptcy.

The speech is best known for its irreverent one-liner: "The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost."

Bernanke began putting the script into action after the credit system seized up in 2008, purchasing $1.75 trillion of Treasuries, mortgage securities, and agency bonds to shore up the US credit system. He stopped far short of the $5 trillion balance sheet quietly pencilled in by the Fed Board as the upper limit for quantitative easing (QE).

Investors basking in Wall Street's V-shaped rally had assumed that this bizarre episode was over. So did the Fed, which has been shutting liquidity spigots one by one. But the latest batch of data is disturbing.

[snip]

(Excerpt) Read more at telegraph.co.uk ...


TOPICS: News/Current Events
KEYWORDS: bernanke; deflation; economy; inflation
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1 posted on 06/27/2010 8:20:55 PM PDT by blam
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To: All; blam

Wonder if it will be inflation or deflation?


2 posted on 06/27/2010 8:24:49 PM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: blam
Socialism never has worked...and it is not working now.

And the people of this country get it. Obama is just trying to stall the inevitable until the November elections.

3 posted on 06/27/2010 8:25:44 PM PDT by EagleUSA
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To: All

Really broke and can’t afford gold? Buy silver - it is said to be undervalued.


4 posted on 06/27/2010 8:26:21 PM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: Sun

agreed.


5 posted on 06/27/2010 8:27:19 PM PDT by Jet Jaguar (*)
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To: blam
REMINDER: Even The Government Admits The US Is Completely Bankrupt Over The Long Haul

Seriously? We're THIS screwed?

Given that President Obama just promised to cut the deficit in half (as a percentage of GDP) by 2013, we figured it made sense to go back and review the White House's official deficit projections.

President Obama's promise is consistent with the White House's existing forecasts, which call for the deficit to drop from -10%+ of GDP this year to about -4% of GDP in 2013.

The problem is that the White House's longer-term projections don't show the deficit getting much better than that.

Ever.

6 posted on 06/27/2010 8:28:52 PM PDT by blam
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To: Sun
"Really broke and can’t afford gold? Buy silver - it is said to be undervalued."

Yup. I bought 'junk' silver last year.

7 posted on 06/27/2010 8:30:47 PM PDT by blam
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To: blam

Good idea. Let’s be ready for everything, including supplies like food, etc.. This administration is NUTS.


8 posted on 06/27/2010 8:33:18 PM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: blam

Good idea. Let’s be ready for everything, including supplies like food, etc.. This administration is NUTS.


9 posted on 06/27/2010 8:33:24 PM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: blam

Good idea. Let’s be ready for everything, including supplies like food, etc.. This administration is NUTS.


10 posted on 06/27/2010 8:33:37 PM PDT by Sun (Pray that God sends us good leaders. Please say a prayer now.)
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To: blam
And here are the new bills they are printing:


11 posted on 06/27/2010 8:34:33 PM PDT by dfwgator
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To: blam

“Given that President Obama just promised to cut the deficit in half (as a percentage of GDP) by 2013...”

::::::::::::

Anyone who believes this is nuts. He can destroy the value of the dollar by radical inflation, but it is not going to work. He has no end game of any consequence to Americans who care about our economy, our republic, and the greatness of American fiscal accomplisment through our private sector and free enterprise.


12 posted on 06/27/2010 8:35:07 PM PDT by EagleUSA
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To: Sun

The real policy problem for a central bank is to keep increasing the money supply enough to avoid deflation in a economic slow down, but to taper off quickly enough so as to not start an inflation as the economy bounces back.

As long as Obama keeps attacking the private sector with rising taxes and red tape, the FED will need to keep walking this tightrope.


13 posted on 06/27/2010 8:35:20 PM PDT by JLS (Democrats: People who won't even let you enjoy an unseasonably warm winter day.)
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To: EagleUSA

The producers “get it”.

The parasites simply don’t care since they aren’t paying for it.


14 posted on 06/27/2010 8:40:12 PM PDT by Pox (Good Night. I expect more respect tomorrow.)
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To: blam

The only way he can halve the deficits is to deeply cut the military - he’s certainly not going to cut health care.


15 posted on 06/27/2010 8:43:35 PM PDT by Rennes Templar (Obama: A government to shove the people, deny the people, and ignore the people)
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To: blam

The only way he can halve the deficits is to deeply cut the military - he’s certainly not going to cut health care.


16 posted on 06/27/2010 8:43:39 PM PDT by Rennes Templar (Obama: A government to shove the people, deny the people, and ignore the people)
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To: EagleUSA

“Socialism never has worked...and it is not working now.

And the people of this country get it. Obama is just trying to stall the inevitable until the November elections. “

I don’t think many libs get it.


17 posted on 06/27/2010 8:44:26 PM PDT by DonaldC (A nation cannot stand in the absence of religious principle.)
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To: blam
I have thought since the summer of 2008 (with $150 barrel oil and $1000 gold) that deflation was the real potential problem not inflation. My view is unchanged.

Today interest on 30 year treasuries is about 3%, the price of oil with no new drilling allowed in the gulf is about $75 a barrel.

The only thing that explains is underlying deflation in the economy..

18 posted on 06/27/2010 8:46:04 PM PDT by montanajoe
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To: blam

Most people see money-printing and think “inflation,” but the reality is that:

#1: debt is deflationary. More debt means less inflation in Japan, Europe, and the U.S.

#2: the money supply is all cash plus all credit. Credit has been destroyed and lots of cash is going overseas to pay Chinese manufacturers and Saudi oil producers.

You can run the printing presses night and day, yet still fail to prevent deflation if you don’t address #1&2 above.


19 posted on 06/27/2010 8:46:10 PM PDT by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
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To: blam
Jeez...now we've achieved "Zimbabwe."
20 posted on 06/27/2010 8:47:20 PM PDT by Grizzled Bear (Does not play well with others)
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