Posted on 03/18/2009 12:33:21 PM PDT by TenthAmendmentChampion
WASHINGTON (AP) -- The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt.
At the same time, the Fed left a key short-term bank lending rate at a record low of between zero and 0.25 percent. Economists predict the Fed will hold the rate in that zone for the rest of this year and for most -- if not all -- of next year.
Fed purchases should boost Treasury prices and drive down their rates. That would ripple through and lower rates on other kinds of debt. The last time the Fed set out to influence long-term interest rates was during the 1960s.
(Excerpt) Read more at finance.yahoo.com ...
>> This is scary. Inflation with stagnation on the way?
Inflation’s on the way.
Stagnation’s kinda already here. :-)
It's just 'Helicopter Ben' Bernanke making good on his promise from a few years back.
As to where the money comes from? Of course, we all know that the Federal Reserve is a private bank that has the right to issue our currency. All they do is make an accounting entry to create dollars (debit cash, credit equity) that they then use to buy U.S. Treasuries and collect interest from you, your children and your children's children ad infinitum.
This is why the Constitution mandated 'gold and silver coin' as money. Not that anyone pays any attention to such an antiquated document anymore. Think fiat (which is a currency backed by noting, i.e., the U.S. dollar) inflation wasn't known in the 1700s? Think again...
Weep for your country. The short bus riders of the markets will be waking up soon, right after they stupidly buy into this.
This will just further crush the real economy, as this will NOT get translated into wages. Prices go up, wages remain the same, the real economy goes boom.
The only thing we can look forward to is the ramping yields on the T-bills. Anybody else remember the 80s ? I’ll happily take a double or triple digit return on my T-bills.
bookmark
The Federal Reserve is a private bank owned by:
* Rothschild Banks of London and Berlin * Lazard Brothers Bank of Paris * Israel Moses Seif Bank of Italy * Warburg Bank of Hamburg and Amsterdam * Lehman Brothers Bank of New York * Kuhn, Loeb and Co. of New York * Chase Manhattan Bank of New York * Goldman, Sachs of New York
There's nothing 'federal' about it and there are no 'reserves'. That's just a naming-conventions used to deceive people.
Unfortunately, the joke's on us. Ha Ha
I know that, but I was just wondering how their latest scheme worked!
Ditto what N Tick said.
Paying Peter to pay Paul to pay Peter to pay Paul
Been there done that.
If you knew that, you wouldn't have to ask 'how it worked'.
It's simply an accounting entry on the books of the Federal Reserve. Debit cash, credit equity. Use instantly-created cash to buy U.S. Treasuries which pay interest and re-pay the principal which was just created by accounting-entry.
Of course, this would all be a big no-no if you or I tried it, but that's the advantage that was given to 'the Fed' by the Federal Reserve Act of 1913.
Isn’t this like shooting dice with your wife?
Great. So, the Government is artificially keeping housing prices at high Bubble levels that the average buyer can't afford without gimmicks.
These will be houses that will not be able to be sold to future buyers that do not have the benefit of such gimmicks.
Thanks GOPM!
What is meant by:
***WASHINGTON (AP) — The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds...***?
Notice they did this after Rush went off the air for the day.
That’s scary.
hopefully the people refinancing and financing at these rates are people like me who do not plan to sell come heck or high water!
These rates greatly dilute any sympathy I might have had for people who have ARMS and who do not go into fixed rate financing NOW
It is a reaction to a massively inflationary move by the fed.
Looks like Schiffs gold buggery is finally going to pay off.
The Fed can now package them up and sell them to Goldman Sachs as shares of “treasury backed securities” insured by AIG. They can then be used as collateral by anyone who needs a new Citicorp credit card to make purchases at Walmart who will then send the money to China for the next shipment of junk. China can then buy more U.S. treasury bonds. If we just keep up this cycle over and over again, every will be rich and obama can be elected President for life.
Actually, I was suggesting using that little piece of cardboard without actually opening an account.
Obviously, neither you nor I can do that.
Our Masters, however, play by a different set of rules.
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