Posted on 10/30/2013 11:37:27 AM PDT by NormsRevenge
WASHINGTON (Reuters) - The Federal Reserve extended its support for a slowing U.S. economy on Wednesday, sounding a bit less optimistic about growth and saying it will keep buying $85 billion in bonds per month for the time being.
In announcing the widely expected decision, Fed officials nodded to weaker economic prospects due in part to a fiscal fight in Washington that shuttered much of the government for 16 days earlier this month.
The Fed indicated the recovery in housing had lost some steam, while noting some reversal in a recent spike in borrowing costs.
"Available data suggest that household spending and business fixed investment advanced, while the recovery in the housing sector slowed somewhat in recent months," the Fed's policy-setting Federal Open Market Committee said. "Fiscal policy is restraining economic growth."
The labor market has shown "some" further improvement, the Fed said, tempering its description after a recent weakening in the jobs figures. It dropped a reference to a "tightening of financial conditions observed in recent months" from its list of risks to the outlook, but many economists stuck with bets for stimulus to stay into next year.
"Until the economic data strengthens, and strengthens meaningfully, I think expectations for tapering are going to remain subdued," said Rishna Memani, chief investment officer at Oppenheimer Funds in New York. "The likelihood of anything happening in December is modest."
Esther George, president of the Kansas City Federal Reserve Bank, dissented against the decision as she has at every FOMC meeting this year, favoring a modest reduction in the pace of bond purchases.
(Excerpt) Read more at finance.yahoo.com ...
‘stimulus’ another word for ‘inflation’
“Fiscal policy is restraining economic growth.”
Who knew?
Dem banks are goin' ta make some bones.
It should be obvious now to everyone that the Democrat’s so-called “stimulus” expense (almost $1 Billion in 2009 )not only did NOT stimulate the economy — it made things worse.
It will eventually. The Left doesn’t seem to understand that printing more money does NOT — and indeed CAN NOT —make everyone wealthier.
What the Fed is doing is economically perverse.
“Fiscal policy is restraining economic growth.”
“Fiscal policy is restraining economic growth.”
“Fiscal policy is restraining economic growth.”
“Fiscal policy is restraining economic growth.”
Worth repeating. The Obama Administration’s anti-commerce politics is killing the recovery.
Without question. Let’s look at history. What great economy was built by this kind of ‘stimulus’? Weimar Germany? Zimbabwe? Argentina?
And the worst part is that there are "financial planners" who do not know who Ben Bernanke is, and are on this false economy bandwagon.
It's all gonna crash.
Yes, the Fed is printing money to paper over the deficits, as the annual deficits we are running up now exceeds the world’s capacity, and increasingly the world’s willingness, to finance it. So we have to print money to ourselves. By putting it into the bond/stock markets, the Fed is counting on using those markets as “reservoirs” to hold the money out of circulation, which is the only thing keeping us from Weimar Republic-style turbo-inflation. They are creating the next bubble, in fact, they are counting on creating a bubble. When the bubble bursts and goes “poof” all the value disappears, and it’s as though they never printed the money to begin with.
I think that’s the strategy anyway. Looks good on paper, even if its worthless paper.
You can partially re-inflate a bubble if you blow hard enough.
Problem is, you can only exhale for so long...
This actually started with GWB and it's a death spiral. As soon as those interest rates go up to even 2% people will look for safety of FDIC savings. Now that money has nowhere to go. If local economies improved, municipal and state bonds might be better. But for local economies to improve, there has to be job creation and people with savings have to have interest on their savings, which will to a great degree be spent locally.
The thing people don't realize is how little money they actually have in the stock market. The only real money is the cash part. The rest, you have to sell to get the money. If everybody sells the "money" disappears as the price collapses. It's hard to believe, but most people don't know that.
The thing is, the fed isn’t printing money. They’re telling government it’s okay to put some magic numbers into the computer, out of thin air, and it’s “spent” for stuff the government can’t afford. Then, for some reason I can’t comprehend, it’s a debt that has to be paid back. Why don’t they just pay the bills and not “pay it back”? Either way, it’s make believe. Except their way, the rich get richer, forever.
I refered to that in another post as Ben turning our fiscal policy into a video arcade game.
My gut feeling is that paying for stuff now would equal inflation now. Converting it to debt kicks the can down the road. For those who are not paying attention, kick the can is the new national pastime, at least inside the beltway. Unfortunately, the can is getting larger, and the road is getting shorter.
Here is a summary of Fed policy for the foreseeable future:
They’re gonna print.
Then they’re going to print some more.
Then they’re gonna print.
Then they’re going to print some more.
Then they’re gonna print.
Then they’re going to act like they’re not going to print, but they’ll print.
Then they’ll print some more.
And just when you thought that surely they couldn’t print anymore, they’re gonna print.
They’re going to print until their fingers are worn to nubs.
They’re going to print until their eyes bleed.
They’re going to print to wake the dead and to make the banshee wail.
Because they have nothing else.
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