Posted on 11/10/2010 4:19:47 AM PST by Scanian
Ah, so that's what Ben Bernanke is up to!
Bernanke, of course, announced last week that he would allow the Federal Reserve to purchase $600 billion more in government bonds over the next eight months. That's referred to in polite society as "quantitative easing," which is just another name for debasing the value of the dollar by printing -- electronically, these days -- piles of additional currency.
QE was tried last year and didn't do much for the economy. But QE2 was announced last week anyway, and there are a lot of folks who don't think it'll do much good this time either.
So why is Bernanke even bothering, considering how much ill will this could create in places like China, which holds massive amounts of dollars in the form of US government debt?
"Stock prices rose and long-term interest rates fell when investors began to anticipate this additional action," Bernanke said after QE2 was announced last week. "Easier financial conditions will promote economic growth."
Let's analyze this mostly ignored statement.
(Excerpt) Read more at nypost.com ...
bttt
Is the Fed buying state and municipal “Government” bonds?
LLS
Think about the absurdity of what the fed and Bernanke are doing. They are effectively printing more money, out of thin air, to magically fix the economy. Only in this electronic age, the Fed does not even do anything so physical as actually “printing money”; they generate a number in a computer. So the Fed is writing down a number somewhere and, voilà, everything is all better. That amounts to a magic trick, and not a very good one at that. This is what passes for economic central planning in the early 21’st century. Sheesh!
Ping
>magically fix the economy????????????????
Do tell how higher gas and food prices are going to fix the
economy?
You get to pay for it!
The same way they ‘fixed’ the economy in the 1970’s.
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