Posted on 08/10/2010 11:49:47 AM PDT by John W
Acknowledging that the recovery has slowed, the Federal Reserve announced Tuesday that it would use the proceeds from its huge mortgage-bond portfolio to buy long-term Treasury securities, The New York Times’s Sewell Chan reports from Washington.
By buying government debt, the Fed is taking an unmistakable step to maintain the large amount of money that it pumped into the economy, starting in 2007, to prop up the financial and housing markets.
(Excerpt) Read more at dealbook.blogs.nytimes.com ...
> They already have the printing presses working 24x7x365. How much more money can they print???
Invest in printing presses and green ink.
There are some very basic facts that we keep skirting around because they don’t fit the manufactured ‘facts’ of the left.
1) Inequality is often caused by unequal effort. Of all nations, this one has historically given individuals the best chance of improving their socioeconomic success based on their efforts (at least until recently). Many of those who haven’t taken advantage of what this nation has to offer have themselves to blame most.
2) Redistribution is stealing, and attempts to ‘equalize’ society in this manner will ultimately lead to loss of incentive and an economic malaise.
3) Printing money to pay debt only decreases the value of every dollar that people have earned and saved. Spending taxpayer dollars in attempts at social engineering won’t substantively or sustainably increase the quality of life of those who are satisfied to live off welfare and subsidies, but it will decimate the savings and equity that others have put years of their lives into attaining.
They aren’t really printing, they on monetizing debt.
Most big money is in wire transfers which is worse.
Translation for the uninitiated: US GOVERNMENT TO PRINT MORE CURRENCY.
The Treasury prints Bonds. The Fed prints Federal Reserve Notes. They exchange them so the Treasury gets the FRNs and the Fed gets the Bonds and both pretend these are assets. The Treasury does more than pretend. It spends those FRNs that didn't exist last week.
I like to call the Bonds and the FRNs I-owe-me's. But whatever, it's fraud pure and simple.
ML/NJ
Yup. This is how they monetize the debt.
This is actually the “printing press” you hear spoken of.
What's insane to me is having the Treasury, which has no oversight, owning so much of our debt. Gee, just imagine if we wake up next week and they decide to call it in?
It’s called monetizing the debt.
Only the Fed can “create money”, not the gvt. So the fed creates money (out of thin air), and buys the fed’s bonds.
End result? The gvt has real dollars (for whatever they’re worth) and the Fed has equivalent gvt debt (for whatever that’s worth).
LOL!
We’ll pay off our Mastercard with our Visa. :)
Except the Fed can keep printing money - meaning that this is an endless cycle....
I remember MANY FReepers telling me that the Fed wasn’t and couldn’t do this. It WAS happening (through intermediaries) and now they are just taking off their masks and doing it directly. That whiff in the air is desperation.
The Fed will buy long term US Treasury debt with newly minted Federal Reserve Notes. Actually, that's a metaphor. The Fed doesn't have to literally print the money. Instead it will just increase the balance of the US Treasury account at the Federal Reserve Bank.
The Treasury will instruct the Fed to create a long-term bond obligating the US Treasury to the Fed and the Fed will electronically increase the balance in the Treasury's account. It is literally as simple as that.
Then the US Treasury squanders the new money according to the designs of the President and Congress. What could possibly go wrong?
Then many freepers told you wrong.
Like it or not, this is the way it works.
There was no “recovery”..... =.=
United States of America, a WHolly Owned Subsidiary of The People’s REpublic of China.
the proceeds from its huge mortgage-bond portfolio
Oh great, the fed prints money to buy our debt they created with the help of uh bummer and friends and now devalues the other assets they used to prop that up with, can anyonesay shell game with no prize under any shell, they now own us..
one of the best
http://video.google.com/videoplay?docid=3051024550497129264#
The Fed doesn't issue debt.
And when China says we don't want your worthless paper anymore, we want your gold.
Oh, you don't have any gold in reserves? Ok, we'll take your assets. That means EVERTHING WE OWN.
This would be the coveted swan song of weinemeiner rep
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.