Fed to Buy $1 Trillion in Securities to Aid Economy (Printing Presses Go Overtime....)

New York Times ^

[wk4bush2004]

WASHINGTON — Saying that the recession continues to deepen, the Federal Reserve announced Wednesday that it would pump an extra $1 trillion into the mortgage market and longer-term Treasury securities in order to revive the economy.

[wk4bush2004]

These people are totally insane! Say hello to hyperinflation!

[BGHater]

Insane?

Hardly. “They” are very competent and the “plan” is working to perfect.

[Need4Truth]

Just what the Chinese were worried about and Obama told them not to worry.

[Danae]

We are so screwed.

We are going to look back at 1979 as a GOOD time in History.

Democrats have proven once again, they ONLY know how to run things into the ground.

[kesg]

I couldn’t agree more. Bernacke is nuts. We are in a credit crunch, and his “solution” is essentially to print even more money to chase an ever-declining amount of goods and services. All so that the government can continue spending way beyond its means, and make it easier for the some of the rest of us to continue borrowing and spending beyond their means as well. Brilliant!

[mainestategop]

Of course the reccession is deepening, we put a left wing terrorist in the oval office and promoted more of this socialist crap. Liberals don’t get it. They think the solution to communism is more communism.

[Errant]

More like 1929!

[atomicweeder]

It only becomes hyperinflation when no one buys treasuries and the US Treasury actually has to print money to cover its debts.

The Federal Reserve can't print money. Presumably it is buying US debt with actual reserve dollars.

I'm not worried, though. I still have Mediterranean and Baltic.

[NVDave]

Yep, they are.

HOWEVER.... this might very well cut mortgage rates, because the Fed has also been buying agency paper. By artificially compressing the long end of the curve and agency rates, this might well be the lowest mortgage rates we’ll see for QUITE some time to come in the future.

So if folks are looking to re-fi or buy a house... within the next several months there will be perhaps the lowest rates we’re going to see for a long time to come.

And at some point in the future, rates are going to go up, and there won’t be much the Fed will be able to do about it.

[pappyone]

I’m on do not pass go. sigh

[antonia]

From Montana to South Carolina, lawmakers in mostly red states have pushed ahead with measures calling for state sovereignty under the Tenth Amendment, saying the federal government has overstepped its bounds with the stimulus package. The states are calling for the right to ignore laws they deem unconstitutional.

Oklahoma state Sen. Randy Brogdon, a Republican and the first to introduce this type of legislation last year, originally pursued it because he thought then-President Bush and Congress exceeded their authority with the Real ID Act, which required states to include certain information on driver's licenses.
 

[edcoil]

I have broadway and park place with hotels — how cool is that.

[Boanarges]

Look at what has happened to the US Dollar in the last hour folks. Inflation is coming!!

[stylin_geek]

Yeah, but the real question is: Why is the Fed buying debt? Are we reaching or have we reached the point where we can no longer sell our debt to anyone else?

[Grampa Dave]

The link below may point out big this financial meltdown really is and how long ago it started.

http://www.villagevoice.com/content/printVersion/850296

[ExTexasRedhead]

Kiss your country goodbye along with your freedom and your children and grandchildren’s futures.

Call or email these morons to express your thoughts:

http://www.conservativeusa.org/mega-cong.htm

[rbg81]

So, lets see: the Fed prints $$ (out of thin air), then buys Treasuries to keep the interest rates low. I may be oversimplifying here, but am I wrong? If so, what am I missing?

[delapaz]

Buying securities is the usual way that Fed money enters the economy. Usually they buy the securities from a third party, this time looks like the T-bills are going directly from the Government to the Fed in exchange for printed cash.

In an inflation scenario the first person to get the “new” money gets the advantage.

A big middle finger to the chinese and anyone who wants or needs to save with low risk, as this depresses rates on all savings rates everywhere.

Not to mention the dollar collapse risk they’re running.

[Vet_6780]

The Bank of England started buying UK sovereign paper today and it was a disaster. A good lesson for Bernanke because the same thing will happen if he tries it here. That's why he hasn't.

Caution On Quantatative Easing

[NRG1973]

I guess this means that we will soon be paying $150.00 per barrel for oil again.