Posted on 08/11/2010 9:18:40 AM PDT by sickoflibs
WASHINGTON (AP) -- As recently as two months ago, the Federal Reserve sounded optimistic about the economic recovery. Now the central bank is clearly more worried, and economists say there's not much more it can do to help.
The Fed said Tuesday that it would spend a relatively small amount of money -- about $10 billion a month, economists estimate -- buying government debt. The move is designed to drive interest rates on mortgages and corporate borrowing at least a little lower and help the economy grow faster.
In a statement after a one-day meeting, the Fed said the pace of the recovery "has slowed in recent months." After its last meeting in late June, the Fed was rosier, saying that the recovery was "proceeding" and the job market actually improving.
The decision to buy government debt, using proceeds from Fed investments in mortgage bonds, was a shift from earlier this year, when the Fed was laying out plans to roll back some of the measures it took during the financial crisis.
clip
"I don't think they are going to raise interest rates until it is very clear that unemployment is moving definitively lower and that doesn't look likely until late 2011," said Mark Zandi, chief economist at Moody's Analytics.
Economists pointed out that buying $10 billion of government debt in a $14 trillion economy is a relatively small move, and they said they did not expect it to have a dramatic impact.
(Excerpt) Read more at finance.yahoo.com ...
July 21,2010
The “messiah” ,
“There will be no more tax-funded bailouts — period,”
Money grows on trees ping!
This is Bernake bailing out the federal government, inronically.
And this helps. How?
The friggin FED and bankers are extremely jittery knowing that the jig is up!
We’ve been under foot of both these oppressive entities for far too long!
The American people are getting robbed and don’t even know it!
This is insanity.
They’ve stood there and fired all their bullets, to no effect. And the elephant keeps bearing down hard on them. Now, they can only swing the empty rifle like a club as it takes the last few steps to impact.
Bizarro World is upon us. Up is down. Bad is good. Deficit is profit. thanks DIMs, RINOs and LIBs. Thanks.
lol
This is Bernake bailing out the federal government, inronically....
More like Goldman Sax taking more possesion of the Government.
China no longer interested in our debt?
Gee, I wonder why...
RE :”And this helps. How?”
Short term it lowers interest rates, or keeps them at record lows. This is a temporary stimulus. In the short term it increases GDP, in the longer term it causes problems. We saw that in 2002-2005 (Greenspan) resulting in 2007-2008 blowup although public debt was lower and so the fed didnt have to directly buy treasuries. The future looks really bad.
Like using your Mastercard to pay off your Visa.
“Bizarro World is upon us. Up is down. Bad is good. Deficit is profit. thanks DIMs, RINOs and LIBs. Thanks.”
This is not going to be a easy fix.
Pushing on a string won’t do a damn thing. Everything and everyone is in suspended animation. November 2 may be a breakout rally though.
Monetizing our debt will not end well for us, our children or grandchildren.
You are watching the death spiral of our government. It begins with our government raiding the treasury and ends in a very bad place.
“There will be no more tax-funded bailouts — period,”
I wish I could be confident of that. I was reminded again just yesterday that we managed to squash the TARP bailout initially, only to have it rise like Lazarus a few days later with some media panic and some shady backroom deals.
With what, his good looks?? Maybe Bernanke hasn't heard but, we're broke!!!
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.