Fed makes new rate pledge,pumps more money into economy (More Stimulus or Bust!!)

Yahoo! Finance ^ | 12/12/12 | Reuters

[NormsRevenge]

WASHINGTON (Reuters) - The Federal Reserve ramped up its stimulus to the economy on Wednesday, expressing disappointment with the pace of recovery in employment as contentious U.S. budget talks heighten uncertainty about the outlook.

The central bank replaced a more modest stimulus program due to expire at year-end with a fresh round of Treasury purchases that will increase its balance sheet. It committed to monthly purchases of $45 billion in Treasuries on top of the $40 billion per month in mortgage-backed bonds it started buying in September.

In a surprise move, the Fed also adopted numerical thresholds for policy, a step that had not been expected until early next year. In particular, the Fed said it will likely keep official rates near zero for as long as unemployment remains above 6.5 percent, inflation between one and two years ahead is projected to be no more than 2.5 percent, and long-term inflation expectations remain contained.

The Fed noted unemployment remains elevated ..

"The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Fed said in a statement.

Policymakers also repeated a pledge to keep buying bonds until the labor market outlook improves substantially. A drop in the jobless rate to 7.7 percent in November from 7.9 percent in October was driven by workers exiting the labor force, and therefore did not come close to satisfying that condition.

Under the "Operation Twist" program that will expire at the end of the month, the Fed was buying $45 billion in longer-term Treasuries with proceeds from the sale of short-term debt. The new round of government bond-buying it announced on Wednesday will be funded by essentially creating new money, further expanding the Fed's $2.8 trillion balance sheet.

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[bert]

The fed will not buy bonds that are not issued because there is a new debt ceiling that restricts borrowing to current ceiling levels.

[Toddsterpatriot]

The Fed will keep buying bonds to monitize Federal debt “forever,” and will buy mortgage debt until all of the banks who own true crap mortgages

But the Fed doesn't buy crap mortgages from banks.

[Georgia Girl 2]

Just keep buying gold folks.

[E. Pluribus Unum]

How does silver like it today?

[dollarbull]

But the Fed doesn't buy crap mortgages from banks

LOL....that's funny. Bernanke is buying them and the banks are selling them. It doesn't matter who is in the middle of the transaction. All the fraudulent mortgage paper is going to end up on the Fed's balance sheet - it's where that $hit will all be buried forever.

Have you figured it out yet Toddster? The ponzi scheme should be obvious even to you at this point. Bernanke is going to paper over everything, and pay 100% of the cost of the federal government too while he's at it.

QE will not stop until the dollar is totally destroyed, they can't stop now. The event horizon has been passed. HAHAHAHA. Even you must have bought some gold by now. Too bad you didn't start when I told you to years ago. Gold has been and will continue to kick the $hit out of stocks...and every other asset class.

[Toddsterpatriot]

But the Fed doesn't buy crap mortgages from banks

LOL....that's funny. Bernanke is buying them and the banks are selling them.

Yes, all those guaranteed mortgage bonds on the Fed's balance sheet. Just awful!

[Toddsterpatriot]

Gold has been and will continue to kick the $hit out of stocks...and every other asset class.

[Toddsterpatriot]

Gold has been and will continue to kick the $hit out of stocks...and every other asset class.

[Lurker]

Who is guaranteeing those bonds?

[Toddsterpatriot]

That would be the US Treasury.

[Lurker]

“That would be the US Treasury.”

From where does the US Treasury get its money?

[Toddsterpatriot]

For the most part, taxing and borrowing.

[Lurker]

So in essence the US taxpayer is guaranteeing those bonds.

“The Treasury” isn’t guaranteeing squat.

[Toddsterpatriot]

So in essence the US taxpayer is guaranteeing those bonds.

Yup.

[Lurker]

And you don’t see a problem with this little plan?

[Toddsterpatriot]

I don’t have a problem with the Fed only buying guaranteed bonds. The opposite of the garbage bonds some claimed they bought.

[Lurker]

Oooohkay then.