Skip to comments.Fed Pulls The Trigger With New Bond Buying Program: $40 Billion in MBS Per Month
Posted on 09/13/2012 12:45:51 PM PDT by whitedog57
The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a bid to boost growth and reduce unemployment.
Here is Bernankes statement. And here is the New York Feds statement on MBS purchases.
The reaction? More air pumped into gold, silver, stocks. Seniors hurt by lower bank deposit rates.
Dow Jones Industrials Monetary easing bubbles stock markets
10 Year Treasury Yield
Yield Curve rising yield curve is not what The Fed expected
Fannie #0yr Current Coupon Spread over 10 Yr Treasury expectation of lower mortgage rates (but with tight mortgage credit, it wont help the housing market)
Bank Deposit Rates declining bank deposit rates hurt savers/Seniors and encourage them to take on more risk
Eur/Usd pretty big spike in the dollar euro exchange rate.
The Fed has just said that rates will be kept low EVEN IF THE ECONOMY IMPROVES! What happens when he tries to withdraw stimulus? I shudder to think.
Think of The Fed as The Cookie Monster. It dispenses lots of sugar cookies that give investors a sugar rush. But The Fed has no nutritious foods in its jar that the economy needs. Hence, the economy is left longing for something that will help grow the economy.
So, The Fed did what was expected and more. Open-ended purchases? It will NOT help the housing market, it will NOT help unemployment, but it WILL create bubbles in asset prices.
And no, throwing money out the window will not help avoid the fiscal cliff.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
Sell. Sell. Sell.
Sell what? You would be an idiot to sell in the equities markets as QE has pumped them up substantially.
How much is “F”ing Ben getting paid under the table and BY WHO to try and and get O-Dumbo re-elect?
IT’s obvious obama is getting lots of help in destroying this nation.
Don’t touch my junk
Wag the dog overseas...pump the prime at home. Obama is hanging by a thread for re-election.
The Weimar Republic, part 2...
Let’s dilute the currency - again - and see what happens.
Notice how this move is done under cover of Middle East disaster?? Hmmmm??? It’s almost as if efforts to prop up Obama are being handled as if it’s a Friday news dump.
Buy physical gold, rinse and repeat.
Readers of this thread may be interested in the following quotations on the subject from "Our Ageless Constitution." Dr. Edwin Vieira, who contributed to that volume, has written extensively on the Founders' protections for liberty through their provisions for a sound money system. A search of his books and writings provide a great resource for understanding the dangers of paper money, and the wonderful protections of the Founders' system.
"Paper is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted."
". . . although the other nations of Europe have tried and trodden every path of force or folly in fruitless quest of the same object, yet we still expect to find in juggling tricks and banking dreams, that money can be made out of nothing. . . The misfortune is. . . we shall plunge ourselves in unextinguishable debt, and entail on our posterity an inheritance of external taxes, which will bring our government and people into the condition of those of England, an nation of pikes and gudgeons, the latter bred merely as food for the former."
"Stock dealers and banking companies, by the aid of a paper system [paper money] are enriching themselves to the ruin of our country, and swaying the government by their possession of the printing presses, which their wealth commands, and by other means, not always honorable to the character of our countrymen."
Then there is John Maynard Keynes observation in "The Economic Consequences of the Peace - 1920":
"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. . . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. . . . (It) does it in a manner which not one man in a million is able to diagnose. . . ."
WOW Chase is gonna be even richer !
You people are all missing the secondary effect... they are using a sale by a GSE as a way to whitewash all the corrupt titles (even though they aren’t selling mortgages/notes/homes .. they are selling bond issues) ... These properties are and have been a lawsuit waiting to happen , this “sale” gives the appearance of legitimacy... basically a stamp from the government “warranty deed” ... NOT “special warranty deed” ... of course you still have to look past the rest of the fraud but for most this whitewash and the newfound ability to purchase meaningful title insurance will help sales.
They’ve been talking about this for a while. The attacks could’ve possibly had something to do with pulling the trigger, but it would’ve happened soon anyway.
This is one instance where a Washington insiders is following his heart. Bernanke honestly believes in counterfeiting, and would do it, again and again, no matter when was the next election nor who was president.
As for the possible briber, that would be a waste of money because it won’t work.
"He's being allowed to live" is what he's getting paid.
Too late, methinks.
It takes six months or so for money-printing to show up in GDP. It will make the stock market spike, but I'm not sure if that's enough to convince out-of-work voters that things are getting better.
This is just Bernanke's dogged economic dogmatism in action.
QE3 is worse than QE2. Instead of Treasuries the Fed secret central bank will print/buy (ex nihilo) all the toxic (illegal) MBS at face value from the other banks that made them toxic and illegal to begin with. We are returning to the dark ages of medieval feudalism and hardly anyone knows it.
Wrong. They won't pay face value. They'll pay more. Because the guaranteed MBS they buy are trading above par. Because they pay relatively high rates and, (did I mention?), they're guaranteed.
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