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Goldman: The Fed Needs To Print $4 Trillion In New Money
Zero Hedge ^ | 24 October 2010 | Tyler Durdan

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 ...


TOPICS: Business/Economy; Crime/Corruption; Government
KEYWORDS: money; printmoney
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To: Lorianne

Looks like a good time to buy gold. Again.

But make sure you get it in cold hard currency, in your hand, and not just paper documents.


21 posted on 10/24/2010 10:14:00 PM PDT by airborne (Why is it we won't allow the Bible in school, but we will in prison? Think about it.)
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To: Lorianne

I guess when Democrats give trillions of dollars away to a bunch of uber rich wall street banker types in hopes that it will eventually reach people down on main street it isn’t that bad old “trickle down economics”, it’s just good old QE.


22 posted on 10/24/2010 10:31:18 PM PDT by RC one (WHAT!!!!)
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To: Lorianne
Anybody checked out GS' gold reserves?

They're massive.

23 posted on 10/24/2010 11:13:36 PM PDT by Carry_Okie (The environment is too complex and too important to manage by central planning.)
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To: Lorianne

24 posted on 10/25/2010 12:12:26 AM PDT by Semper Mark (0bama - "The only people who don't want to disclose the truth are people with something to hide.")
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To: Lorianne

The tea party really needs to get back to these issues. They should be planning on putting a stop to the fed’s destructive policies that are solely designed to bail out there banker buddies.


25 posted on 10/25/2010 1:58:35 AM PDT by Revel
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To: DesScorp

Actually, He will carry out His plan regardless of what mankind does or doesn’t do. However, you are right to say that His followers are commanded to pray and stand. And, I take great solace in knowing that He will “help us” - according to His will.


26 posted on 10/25/2010 6:34:35 AM PDT by anniegetyourgun
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To: Lorianne

How will this affect you?

Here We Go Again..... Dollar Debasement

Goldman came out with a report basically demanding (you know how these guys are) $4 trillion in money printing - so says the FX chatter and Zerohedge.

The result? The dollar took an instant header, down more than a 1/2% this evening alone.

How about the price of some of the things sensitive to threats of monetary debasement? These are all price changes since the futures started trading this evening - that is, they’re six hour changes in price. These are all things you need to buy, either directly or indirectly.

Oil, up 1%.

Wheat, up 1.49%.

Corn, up 2.05%. (Oh yeah, and ethanol on your gas will soon be mandated to be 15%, not 10%.)

Soy, up 1.5%.

Rough Rice, up 1.51%.

Oats, up a stunning 4.27% (!)

Cotton is lock-limit up 500 ticks. To be fair there’s a crop disruption related to Cotton, which is adding to the problem. Dollar debasement, of course, isn’t helping.

Remember, these are all soft commodities we produce right here at home. These aren’t import prices, they’re home-grown products (excepting oil, of course.)

And they’re moving - at anywhere from double to eight times the devaluation in the dollar.

Continue

http://market-ticker.org/akcs-www?post=170185


27 posted on 10/25/2010 8:26:37 AM PDT by FromLori (FromLori)
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To: Lorianne

More crony capitalism on display. The TBTF Wall St. banks and firms get first mover advantage when the FED doles out the zero percent funny money to them. They get to spend those newly-created-out-of-thin air ones and zeros on real things like stocks, commodities, real estate, etc. This gives them tremendous advantage in maximizing their profits as everyone else gets to follow the TBTF leaders on spending this new money.

GS whining for more dough must mean they can’t keep the ponzi scheme economic system propped up with their current funding. If the entire FED system was actually audited it would shock the public on how they run this scam while burdening future taxpayers down to cover their bad bets.


28 posted on 10/25/2010 9:43:40 AM PDT by Gen-X-Dad
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To: Lorianne
Dear Goldman Sachs,




29 posted on 10/25/2010 11:34:46 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Lorianne
Goldman Sachs...?
 
Goldman Sachs Is The Gay-Friendliest Bank On Wall Street 
http://www.freerepublic.com/focus/f-news/2608131/posts
 
"What it basically means is: to change the perception of reality of every American that despite of the abundance of information no one is able to come to sensible conclusions in the interest of defending themselves, their families, their community, and their country.
 
It's a great brainwashing process which goes very slow and is divided into four basic stages.
 
The first stage being "demoralization"..."
---KGB Defector Yuri Bezmenov
http://www.freerepublic.com/focus/f-news/2095202/posts
 
THAT, Goldman Sachs?

30 posted on 10/25/2010 11:52:29 AM PDT by LomanBill (Animals! The DemocRats blew up the windmill with an Acorn!)
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To: Lorianne

And the stock market roars its approval... reminding me once again that the market can stay irrational longer than investors can stay solvent.


31 posted on 10/25/2010 11:56:31 AM PDT by andy58-in-nh (America does not need to be organized: it needs to be liberated.)
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