Posted on 11/03/2010 11:37:20 AM PDT by TSgt
WASHINGTON — The Federal Reserve launched a controversial new policy on Wednesday, committing to buy $600 billion more in government bonds by the middle of next year in an attempt to breathe new life into a struggling U.S. economy.
(Excerpt) Read more at msnbc.msn.com ...
Well I don’t care who gets credit for ending the FED. It must be done. They are destroying the currency. Outright theft.
That’s what I thought! I expected $500B with $100B increments but $600B?
Beam me up!
Could this mean things are much worse than we know?
Yep, I’d suggest stocking up on food and any necessities before prices go sky high.
Let us say the entire value of the economy is represented by ten dollar bills. You hold them. Then the federal reserve decides to add more dollars. The value of the economy isn’t changing, but the value of the dollars you hold will shrink instead to cover the difference.
The Federal Reserve’s decisions impact us all, yet the Fed has no accountability to anyone. This situation has to end.
Well...we agree..
It means the Fed is run by a bunch of wonky technocrats who think the economy is merely some complex machine that, by turning a knob here and tuning a dial there, they can get to hum at an ideal growth rate. They have no idea what really drives an economy.
“Audit the Fed!” - Rand Paul
I write on this subject, but can’t reveal who I am to lurkers.
Here is the simple version.
The Fed credits its own account with money it has created out of thin air. The Fed then purchases financial assets from banks and other financial institutions in a process referred to as open market operations. The purchases give banks the excess reserves required for them to create new money by the process of deposit multiplication from increased lending in the fractional reserve banking system.
In layman’s terms, they print $600 billion WITHOUT a printing press! Ain’t technology grand?
In theory, all this excess money is used by the banks to lend, allowing for economic growth. BUT banks haven’t been lending. If they continue not to lend, what has this accomplished?
What QE accomplishes is a massive devaluation of the dollar. This makes imports (oil, copper, coffee, etc) more expensive. BUT it makes our exports cheap! If we actually produced anything anymore.
So, the likely outcome is inflation in import costs which will cause goods in the US to rise as well.
“The Fed is now monetizing essentially the entire net issue of Treasury Debt for the next six months.”
Ponzi Ponzi
Soon it will all fall down.
But Jon Stewart said that we all need to just Chill and things will work out...
/sarcasm
I wish I knew the answer to that. I am trying to get a read on this now- reading at fxstreet.com and other sites.
I’m so pessimistic that it’s hard to believe it could be worse than I think- but it’s possible!
Beck backed it for a couple of days then wised up.
Your statement is false.
Till when?
Thank you for the explanation.
I’m not a conspiracy type however could this not eventually lead to a one world currency?
They are essentially “kiting” money.
Here’s how it works. Suppose you have $10 in bank A but you write a check on the account for $500 and deposit it in bank B. Before that deposit can be processed, you go back and tell the teller at bank B that you want to withdraw $400. The teller gives you $400 in cash, and you disappear before the check bounces.
That’s a very simple kite. More often it’s a bit more sophisticated and involves a lot of money. Check kiting requires at least two accounts, and very often involves two or even three banks. The money rotates in a complete circular fashion between accounts.
Hicks says a kite can take down a financial institution.
“A small credit union in northern Illinois took a $4 million kite loss and had to close its doors. Within the last five to seven years we’ve seen kites in excess of $10 million to $20 million.”
Dedicated fraudsters are often responsible for the high dollar check kiting schemes, but regular customers do much of the smaller kiting that goes on.
“Kiting happens on a daily basis at just about every financial institution,” according to Young. “It may be a customer with a longtime relationship or a new customer. Most kiting occurs with individuals that have businesses that don’t have enough income or revenue to keep going.
“They supplement with check kiting. I think they have every intention to make everything good, but if the money doesn’t come in the situation gets worse and worse. Others do it to run up the dollars and get out of Dodge and leave one of the banks holding the bag.”
http://www.bankrate.com/brm/news/chk/20021203b.asp
We are the victim bank in this case.
There is a method to this madness. The international banksters want a world currency and a world “Fed” to control the economies of the world. When things get bad enough they will pop an “emergency” leglislation on Congress to transfer economic sovergnity to the UN.
BUMP
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