Posted on 10/24/2010 7:55:17 PM PDT by Lorianne
With just over a week left to the QE2 announcement, discussion over the amount, implications and effectiveness of QE2 are almost as prevalent (and moot) as those over the imminent collapse of the MBS system.
One of the amusing debates on the topic has been how much debt will the Fed print.
A brand new analysis by Jan Hatzius, which performs a top down look at how much monetary stimulus is needed to fill the estimated 300 bps hole between the -7% Taylor Implied Funds Rate (of which, Hatzius believes, various other Federal interventions have already filled roughly 400 bps of differential) and the existing 0.2% FF rate. Using some back of the envelope math, the Goldman strategist concludes that every $1 trillion in new LSAP (large scale asset purchases) is the equivalent of a 75 bps rate cut (much less than comparable estimates by Dudley, 100-150bps, and Rudebusch, 130bps). In other words: the Fed will need to print $4 trillion in new money to close the Taylor gap. And here we were thinking the economy is in shambles. Incidentally, $4 trillion in crisp new dollar bills (stores in bank excess reserve vaults) will create just a tad of buying interest in commodities such as gold and oil...
(Excerpt) Read more at zerohedge.com ...
Dollar bills soon to be available in two-ply rolls.
I hope they maintain the paper quality. Hate it when my finger pokes thru.
May God help us.
Do they think they are playing Monopoly?
Okey-dokey. Oh, and we can change our name to "the Weimar Republic" while we're at it.
In the last two months of the Dem majority they'll clean out the treasury, hock all the silverware and send the proceeds to their liberal buddies. There'll be nothing left for Republican initiatives like extension of the Bush tax cuts (Obama has already said he'll concentrate on "deficit reduction" in 2011). It's nothing more than a political "scorched earth policy".
Get ready for 2011: economy in shambles, the treasury is empty and it's all the Tea Party's fault...
Soon to be followed by gold at $2500/oz and silver at $150/oz.
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The only thing Federal Reserve Chairman Ben Bernanke has to offer is to print more dollars (Monetary easing).
Fire up the presses.
And make sure Ben doesn't run out of ink printing all that money - with nothing backing it up!
Obama bamboozled millions... gave them the old 'okee doke.'
Generations of working Americans will be paying interest on the nation's debt through higher taxes for years to come and eventually will pay more than twice the initial amount in principal and interest payments.
The Rats are shovel-ready for the dust bin of history.
“May God help us.”
He’s only going to do that if we ask him.
sfl
“Do they think they are playing Monopoly?”
They ARE playing Monopoly. That’s what happens when you have a fiat currency monetary system.
When you land on Baltic it is much different than Park Place.
“Okey-dokey. Oh, and we can change our name to “the Weimar Republic” while we’re at it.”
To be blunt, if the Fed prints $4,000,000,000,000, what happened to the Weimar Republic will look like a walk in a (nice) park compared to what we’ll have to suffer.
Most people, even educated people, don’t understand what a fiat (ie, unbacked) currency really is.
Short version: It is a measure of trade whose value is a reflection of people’s faith in the issuing state’s viability.
Internalize that, and then be afraid. Very afraid.
And make sure Ben doesn’t run out of ink printing all that money -
Think of the squids!!!
Have you no mercy ???
That is what I really fear... and everyone who lives on a fixed income, lives off of cash accrued over a lifetime should fear most.
I'll be nearly self sufficient at 'the gulch' but I don't know how I'll be able to keep providing the (currently) several thousands of dollars a month of 24/7 care for my mentally and physically disabled mother.
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