Posted on 09/13/2012 6:49:01 PM PDT by dennisw
This is not what people mean when they talk about “wealth creation.” In fact, it’s very nearly the opposite of that: The inevitable devaluing of the dollar — the prices of gold, silver and several other commodities spiked in the minutes following the Fed’s 12:30 announcement — means our savings will lose value. This is the destruction of future wealth in the hopes of creating some current economic growth. In that respect, it is no different from increasing the budget deficit even further to fund even more Keynesian spending.
The Federal Reserve’s Open Market Committee today said it will keep trying to print money until the economy recovers. In short, the Fed said it will increase its purchases of mortgage-backed securities by $40 billion a month until employment improves. So, indefinitely. Combined with other maneuvers, the Fed said its asset holdings will increase by about $85 billion a month through the end of this year. And the money-printing may not end there; from the Fed’s statement:
The Fed already had said it would keep short-term interest rates at or near zero until 2014. Today, it said that policy was likely to remain in place until mid-2015, which is three years from now and six years after the nominal end of the Great Recession. The new bond-buying comes on top of that.
Folks, this is what pushing the panic button looks like. It’s unclear what, if anything, comes between the panic button and the white flag.
(Excerpt) Read more at blogs.ajc.com ...
At what point will quantitative easing drive up interest rates on loans and bonds?
Labor Department reports big jump in weekly claims for jobless benefits
"Applications increased by 15,000 to a seasonally adjusted 382,000, the Labor Department said Thursday. That’s up from 367,000 the previous week. The four-week average, a less volatile measure, increased for the fourth straight week to 375,000."
Dollar bills soon to be in rolls.
New bubble to unworthy borrowers..., new coming collapse.
Who was it — Einstein? — that wrote, “The definition of Bernanke is doing the same dumb ineffectual thing over and over, hoping for a different result.”
Yeah, I realize I’m paraphrasing, but I think I’m close. :-)
I’ve been saying this for years, the politicians will absolutely continue to monitize the debt. The other two options are to drastically cut entitlements including social security and medicare, or default. There’s no question that having the fed create money, buy up the debt, and “retire” it is the path of least resistance. They just do nothing and let the Fed do it. If Romney/Ryan get elected there may some long term reforms but they won’t stop the Fed from inflating the money and buying debt.
Time to go long wheelbarrows. (for carrying your fiat cash to buy bread)
They’re buying up the entire country. At this rate, they are purchasing 35% of all mortgages each month. Your home will be owned by the Fed.
They’re buying up the entire country. At this rate, they are purchasing 35% of all mortgages ORIGINATED each month (sorry, wasn’t clear in my original post). Your home will be owned by the Fed.
$1.02 trillion in worthless “assets!” Hoowee! That’s a whole lot o’ junk.
Well, we know the debt regime will roll as long as it can. Government won’t willingly shrink itself. One side wants more debt for federal-level folks, and the other wants more local pork from federal debt.
We might have two years or more to prepare for the bond collapse, skyrocketing interest rates and worse. Use the time wisely.
Oops, that would be about $1.02 trillion in a year, but they said only through the end of this year (and more to come, if...heh...employment doesn’t go up). Yeah. It’ll go on and on.
Most homes are already owned by the Fed, in a sense. Most of the payments toward mortgages come directly or indirectly from government debt. Look around. Even retail services depend mostly on customers with government incomes or businesses otherwise dependent on government.
The alternative: those awful “smokestack industries.”
A TRILLION Dollars? I guess a Trillion is not what it used to be. This is all CREDIT not MONEY.
Two years? I’ll go out on a limb and say food riots in the US by next summer.
The FED is doing what the FED can do.
It’s up to Congress to raise the import tariffs so that are people go back to work.
The FED is just putting a bandaid on the problem hoping to keep the patient alive until Congress does something.
Lemme see now, - - - “If the throwing of money hasn’t made the problem go away, then obviously there has not been enough money thrown at it!”
No, No, way to wordy.
Hmmmm - - - - . How about “The beatings will continue until morale improves!”
Just fix a Jolly Roger/Bernanke face under the words and post it here!
When all else fails just quote them: “ - - - the Fed said it will increase its purchases of mortgage-backed securities by $40 billion a month until employment improves.”
Duh, is Bernanke trying to spend his way out of debt?
>> Your home will be owned by the Fed.
Not mine. It’s paid for. Er, I mean, the *school district* owns it unless I pay my property tax. :-(
>> Time to go long wheelbarrows. (for carrying your fiat cash to buy bread)
Nah, I’m going long ammo... I’ll get you on your way back from the store and pry the bread out of your exhausted arms. :-)
Agreed that it’s debt, Orange1998. So is most of our so-called economy. It’s outrageous. Sorry, BTW, I erroneously projected a year on that $85 billion per month instead of only to year’s end. But it’ll go on after that, of course.
Jobs don’t grow on trees, of course. We need to have regulations and fees for all kinds of production and development repealed/abolished/dumped at both local and national levels.
And yes, garbanzo, an economic collapse could come sooner. In one way, we’ve already had one (domestic production of useful items declining very quickly). In another way, we see one ahead (bond collapse, skyrocketing interest rates propagated throughout the system, repudiation, currency adjustment, etc.).
But a debt regime can be dragged out surprisingly hideous lengths, if enough other countries (especially producers and commodities exporters) cooperate on making that happen. I’ve studied some of the others and am trying to analyze this one (reserve currency, diplomatic resources and possible deals, trade situations, demographics of political groups, etc.). There are also possibilities of fluctuations caused by increasing likelihoods of wars and many other possible introductions of changes.
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