Skip to comments.Fed to Spend $600 Billion More To Help Boost US Economy (How low will the dollar go)
Posted on 11/03/2010 1:10:06 PM PDT by Hojczyk
The Federal Reserve launched a controversial new policy on Wednesday, committing to buy $600 billion more in government bonds by the middle of next year in an attempt to breathe new life into a struggling U.S. economy.
(Excerpt) Read more at cnbc.com ...
I’d buy myself a little Galt’s Gulch somewhere if I had the money.
Cash just doesn’t sit on the sidelines unless its in a mattress.
This is going to decrease the value of the dollar by that much.
That only works if you have a job. If you own money and can not pay the bank you can maybe delay 6 months the bank taking it. I you own your house out right it will take the city or town probably 2 years to take it.
Not necessarily in this situation...rising prices in our current state of high unemployment and even higher under-employment will not necessarily result in higher salaries. What rising prices will do is put pressure on those frozen or non-existant paychecks - more money will be drained for basic necessities and less will be available for discretionary spending. For the mass of people in America with high debt to pay off, those rising prices also mean that there will be less available to pay down or service that debt.
What this does is provide very short term help to the government's balance sheet...at a high price later on. Kick the can down the road to the next election. Just keep the lid on the boiling pot...but it may well be a fool's bet for them because they are damned if they do and damned if they don't.
The financial pressure put on an already battered public straining to just make ends meet could create a bigger explosion than the government not being able to keep it's departments operating for lack of ability to borrow more funds.
With the passage of Prop 23 here in CA, we’ll soon be paying $9/gal.
I mean the defeat of Prop 23.
Yes good points. But there are already empty foreclosed homes that just sit. But then property, (the right to smoke a cigarette in your home and flatulance)- taxes will soon have someone homeless. Will the country get to the point when county, state, fed taxes are not collected? I doubt it.
Obama cares for us remember... he wants us all on unemployment and welfare so it will all be ok.
QE2 is just Obama’s end-a-round-run of the incoming republican majority.
He will be able to claim the markets are improving he will be able to show gains in the GDP falsely inflated by 500 billion worthless dollars.
Inflation will be “blamed” on the Republicans and if the dollar slides and fails Obama would then seek UN help in the form of monetary (world currency) oversight (authority). Thus his pro socialist agenda is not dead just re-navigated.
If the future value of the dollar is in jeopardy what institution in there right mind would loan money out today to be repaid at a much lesser value?
Again all of this will be skillfully spun as to blame those greedy Republicans.
Obama is only too happy to have the Republicans in charge when he and the Fed crash the economy.
Soro’s must have bussed in many illegals with an electric bill for the win. That is quire sad I am sorry for Ca. have you thought about moving?
The Federal Reserve like the IRS is not constrained by the Constituion.
Post of the year! You nailed it to a tee. I wish I could fit your post as a sig quote. It needs repeated. It is the truth very well stated.
This will help. /
The inflation genie is purposely being let out of the bottle. This is all part of the Marxist wealth redistribution plan. Destroy the savings of those that have lived within their means and turn them into serfs.
Maybe we’ll meet there someday;)
The Fed said it expects to buy between $850 billion to $900 billion Treasurys through the end of the second quarter of 2011. That's because in addition to the $600 billion, the Fed expects to buy about $35 billion a month to replace mortgage bonds in its portfolio that are being retired, a decision that was taken back in August.
Had the pubbies not made a killing yesterday, this never would have happened. It is based on making our dollar worthless, while the pubbies control the purse strings, to get us on a global currency. Super-duper inflation just around the corner!
Yes, that's how the system works.
Where they are being foolish is using this new money to buy federal debt. That's not the smartest way to use the money; that debt will have to be serviced by the government forever, and it creates a net drag on the economy.
While there are competing ideas as to the most effective use of such new, fiat Fed issue, I think that using it for straight up consumption is probably the most effective way to use it although the hardest to defend in our current system.
I personally think that the government might as well simply have the Treasury create the issue ("Greenbacks", not Federal Reserve notes) and use that new money to directly meet expenses. The advantage is that that money goes straight into the economy instead of building yet a higher mountain of debt for our children to pay for.
The downside of such "hot" issue, though, is that it is extraordinarily inflationary. It is the very definition of "running the printing presses".
If we were to do it to the extent of $600 billion of new issue with no corresponding debt against that issue, it would be a very dangerous act since the multiplier on that is probably close to 7 giving (again, very, very roughly) a $4 trillion kick to a $14 trillion economy which would result in perhaps 20% inflation. Or maybe a lot more, or (conceivably) a lot less. It depends on how sluggish the economy stayed with such a powerful infusion of hot money.
If they sent each human being living in America 350K
we could all be happy in hyperinflation.
The pubs said no more spending and this happened today.
What vote did they have to stop it? Holy crap this is getting crazy. As Obama lights his huge bong before he goes to muslim worship overseas in the Taj Mahal and what is Hillary doing other than giving Bill an excuse to have Monica over?
Pelosi is walking through her vineyard in luxury laughing her ass off in her new commie state. Oh and don’t worry Obama has our back on those mail bombs.