Is the Fed on a Suicide mission?
Posted on 09/18/2013 11:13:08 AM PDT by Hojczyk
Edited on 09/18/2013 11:17:36 AM PDT by Admin Moderator. [history]
An economy still stumbling toward recovery was not enough to sway the Federal Reserve, which defied market expectations Wednesday and said it will not begin pulling back on its monthly asset-purchasing program. Stocks surged on the news but bond yields were flat.
(Excerpt) Read more at cnbc.com ...
If anything, owing to the broad powers and independence granted to the Fed by the Federal Reserve Act of 1913, the Fed doesn't have to answer to any government agency in any serious way. The Fed Chairman doesn't even have to answer Congress' questions in the oversight committees if it doesn't want to.
The Fed can even refuse to answer to Congress in the oversight committees if it wants to! Any influence Congress has is fairly limited, short of an act of Congress to change the current law.
Soon, when this unwinds, on its own, people will need fortitude not seen in about 70 years.
Counting as inflation, also . . . unless you're one of those who erroneously believes the govt doesn't count it.
The true increase in the amount of money in circulation is shown here as “TMS2”: http://blogs.forbes.com/michaelpollaro/austrian-money-supply/
9%
The printed money are bits stuck in the bank reserves. No idea how and when they get unleashed. No economist knows either, because it’s uncharted territory. But unleash they must.
I guess the cronies will be selling their long gold positions today.
This doesn't make any sense to me, but neither did NASDAQ 5000 or the housing boom.
Diluting the currency worked badly in Zimbabwee and pre-Hitler Germany.
But I am sure the 3rd time will be a wonderful success.
After all, noone is hurt by currency so it takes more of the smaller dollars to buy gas, food, etc.
Right? Right?
Anybody?
Is the Fed on a Suicide mission?
So where does everyone have their $$?!
kg/nancy
The Fed doesn’t want the bubble to burst until after the 2014 elections.
http://www.munknee.com/buy-silver-instead-of-gold-here-are-10-reasons-why/
It doesn't tell banks to buy Treasuries.
The Fed then pays for the bonds buy issuing a line of credit for them.
The Fed credits the account of the Primary Dealers they buy from.
Regardless, all of those US Treasuries all end up on the Feds balance sheet anyway.
At this point, $45 billion per month, not all the Treasuries issued each month.
The dollar does buy 50% more gold than it did 2 years ago.
They have tapered ends.
That's OK then. I was worried for a minute.
Whether Bernake is a fan of Keynes or not is immaterial - the Fed can NOT allow rates to rise until it finds a way to pay down, at least some of, the debt it has accrued OR the economy makes a MAJOR turn. If the rates rise, so does the rate that the Government must pay to service the debt.
We are adding roughly 1 Trillion / year to the debt, half again of what we actually take in - and we can't stop the borrowing without crippling the economy! By continuing to "prime the pump" the Fed hopes to keep the economy a float until it turns around - but it hasn't yet and likely won't for a long time.
Essentially he is trapped. But instead of admitting it, and finally allowing the system to cleanse itself, he keeps telling us bedtime stories with pretty unicorns. All this to hide the the fact that Freddy is awaiting us when we really do fall asleep ...
Sorry, the pony chewed through it's chain and mauled one of the kids at the party. It had to be put down.
It’s a Mad, Mad, Mad World.
Government, business and religion freefalling into the spirit of this world.
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