Super pump: $1 trillion created out of thin air

[samurai7]

WASHINGTON: The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.

Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air.

More here:
http://www.iht.com/articles/2009/03/18/business/fed.php

Okay, why does that NOT sound good? :rolleyes:

[russbenson]

More here:
http://www.iht.com/articles/2009/03/18/business/fed.php

Okay, why does that NOT sound good? :rolleyes:

Because it is like trying to breath air in the vacuum of space. And the next 20 or so generations will pay the price for Washington's self indulgent participation.

[Mojotiger]

Who needs to go to Drudge when you can get all of the headlines here?;)

[camp_steveo]

Well....maybe it is a good idea. Maybe when the Federal Reserve loses the last 3% of it's value, we will be forced to abolish it, and go back to a REAL monetary system.

I foresee great growing pains in our future.

[Gray]

More here:
http://www.iht.com/articles/2009/03/18/business/fed.php

Okay, why does that NOT sound good? :rolleyes:

Because there will likely be massive inflation and then after that another recession. What we could have gotten through in a year or two will take much much longer now.

[samurai7]

Who needs to go to Drudge when you can get all of the headlines here?;)

Because I don't get to hear liberals whine about them. :razz:

:)) :))

[samurai7]

Because there will likely be massive inflation and then after that another recession. What we could have gotten through in a year or two will take much much longer now.

Yeah, MM has more about it:

The David Copperfield School of Economic Recovery

The Federal Reserve performed another empty magic trick yesterday to the tune of $1 trillion.

While the Kabuki Theater of AIG outrage played out in Washington, the Fed was pulling its David Copperfield School of Economic Recovery routine. They’ll be printing up a trillion buck and “pumping it into the U.S. economy”…by buying up bonds and mortgage securities…sold and backed by the government. Voila:


More here:

http://michellemalkin.com/2009/03/19/the-david-copperfield-school-of-economic-recovery/

Two money quotes from same article:

“In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability,” the central bank said.

As expected, policy makers decided to keep the Fed’s benchmark interest rate on overnight loans in a range between zero and 0.25 percent.

But to the surprise of investors and analysts, the committee said it had decided to purchase an additional $750 billion worth of government-guaranteed mortgage-backed securities on top of the $500 billion that the Fed is already in the process of buying.

In addition, the Fed said it would buy up to $300 billion worth of longer-term Treasury securities over the next six months. That would tend to push down longer-term interest rates on all types of loans.

All these measures would come in addition to what has already been an unprecedented expansion of lending by the Fed. The central bank also said it would probably expand the scope of a new program to finance consumer and business lending, which gets under way this week.

In effect, the central bank has been lending money to a wider and wider array of borrowers, and it has financed that lending by using its authority to create new money at will.

Note the losing battle Benanke is fighting: attitudes. The Fed has become the lender of only resort as opposed to the lender of last resort. Bernanke cannot force banks to lend nor can he force companies to hire or if they do hire the wages that will be paid.

Wage destruction continues unabated, and if Bernanke does succeed in driving prices higher, he just might ask himself, how anyone is going to pay the bills.

Deflation is a Benefit, Not a Curse

Deflation is a benefit, not a curse. It only appears to be a curse through the myopic eyes of Bernanke who is worried about the destruction of debt on the balance sheets of financial institutions. However the time to worry about balance sheets is not now. The time to worry about balance sheets was in 2002 when something could have been done about it.

Now the best thing to do is let things play out. The economy will bottom on its own once prices fall far enough.


Gee, how can I tell the idiots the voters put in charge last election don't know what the hell they are doing?

:rolleyes:

[Canadian Jane]

Because there will likely be massive inflation and then after that another recession. What we could have gotten through in a year or two will take much much longer now.


Exactly. And it has started:


http://news.bbc.co.uk/1/hi/business/7952319.stm

Dollar slides after US Fed plan


The dollar has fallen against all major currencies after the US Federal Reserve announced a plan to buy $1.2tn (£843bn) of debt to boost its economy.

The dollar fell by 2.9% against the euro and by 2.5% against the pound.
The US currency also declined against the yen, the Norwegian krone, the Australian dollar and Brazilian real. The Fed's decision to buy debt means it is effectively creating new money, leading to concern from investors about the over-supply of dollars.


.... con't on link

[Flyboy84]

More here:
http://www.iht.com/articles/2009/03/18/business/fed.php

Okay, why does that NOT sound good? :rolleyes:

I think this is an excellent idea. Just look at how well it is working in Zimbabwe. The only thing we need now is an arrogant, elitist liberal to step in as our benevolent dictator. I wonder who could fill those shoes?

[7426k]

Yeah, MM has more about it:



More here:

http://michellemalkin.com/2009/03/19/the-david-copperfield-school-of-economic-recovery/

Two money quotes from same article:





Gee, how can I tell the idiots the voters put in charge last election don't know what the hell they are doing?

:rolleyes:
The "idiots the voters" didn't elect the Federal Reserve board.

[wonderingrover]

Exactly. And it has started:


http://news.bbc.co.uk/1/hi/business/7952319.stm

Dollar slides after US Fed plan


The dollar has fallen against all major currencies after the US Federal Reserve announced a plan to buy $1.2tn (£843bn) of debt to boost its economy.

The dollar fell by 2.9% against the euro and by 2.5% against the pound.
The US currency also declined against the yen, the Norwegian krone, the Australian dollar and Brazilian real. The Fed's decision to buy debt means it is effectively creating new money, leading to concern from investors about the over-supply of dollars.


.... con't on link

Don't worry - they'll print more money to fix that issue.


:rolleyes:

[jrmarlin2000]

the problem with printing money is the inflation to follow -- but being that Barry got an F in economics and history, he hasn't gotten that 411 yet.

[camp_steveo]

Let 'em print. Eventually they will bring down the house then the Revolution can take place.

If it is inevitable, then why postpone it?

Print more money! Ruin the US economy!

Damned Idiots! Incompetent fools!

[7426k]

the problem with printing money is the inflation to follow -- but being that Barry got an F in economics and history, he hasn't gotten that 411 yet.

Obama can't "print more money". That's the Fed's job, and the Fed doesn't work for Obama.

[jrmarlin2000]

Obama can't "print more money". That's the Fed's job, and the Fed doesn't work for Obama.
No. are you kidding? barry can't print money... hmmm, i never knew that... wow... you must have been the smartest in your class.

[IndyBec]

Obama can't "print more money". That's the Fed's job, and the Fed doesn't work for Obama.


I guess poor Obama didn't know that the money to sustain his agenda would have to come from somewhere, huh?

[7426k]

I guess poor Obama didn't know that the money to sustain his agenda would have to come from somewhere, huh?

Yesterday's decision by the fed to inject a trillion dollars into the financial sector had nothing to do with Obama's plans.

[7426k]

No. are you kidding? barry can't print money... hmmm, i never knew that... wow... you must have been the smartest in your class.

Well you sure thought he could when you accused him of "not getting that information" about inflation.

Or, you were just making a mindless partisan rant.

[jrmarlin2000]

Well you sure thought he could when you accused him of "not getting that information" about inflation.

Or, you were just making a mindless partisan rant.
:)) :)) the president can order the treasury to print more money. and i find it fascinating that you don't know this. the president can also say nay when asked if that is an option. but as far as barry being downstairs at the treasury with a big old printer's hat -- lol that's comical. and i was being sarcastic to you in my post - guess ya missed that, too.

[Canadian Jane]

Yesterday's decision by the fed to inject a trillion dollars into the financial sector had nothing to do with Obama's plans.


Actually - I would disagree with you.

The reaction of the world to Obama's policies is a clear lack of confidence in American T-bills.

Nobody is buying them.

So now the FED is forced to buy them because nobody else wants them.

The fact that your T-bills are worthless to the world falls on the shoulders of your government - and it's chosen policies.

[jrmarlin2000]

Actually - I would disagree with you.

The reaction of the world to Obama's policies is a clear lack of confidence in American T-bills.

Nobody is buying them.

So now the FED is forced to buy them because nobody else wants them.

The fact that your T-bills are worthless to the world falls on the shoulders of your government - and it's chosen policies.
:clap::clap: thank you. and 74, this forces our government to print more money.

[7426k]

Actually - I would disagree with you.

The reaction of the world to Obama's policies is a clear lack of confidence in American T-bills.

Nobody is buying them.

Are you kidding me? New treasuries are selling at near record prices.

So now the FED is forced to buy them because nobody else wants them.

Besides making no sense whatsoever, that is not why the Fed is buying them.

[jrmarlin2000]

7426, the long short is the rest of the world does not have confidence in our economic system right now because its not profitable. too many people going under. too many jobs lost. and they're not buying in as much as they would have say, 20 years ago.

and rest assured those that are buying are looking for something for their money.

as for the president printing money - i am still laughing at you over that one. right at this moment our dollar is only worth .76 euros and .72 of the pound. its actually down from previous days.

so our dollar is becoming useless whether or not they print more money.

but i would think you would be more alarmed by the amount of $$ YOU owe along with the rest of us for the frivolous waste and mis-management of our government.

[mkh]

Money money money.....money!!!!!!

[7426k]

7426, the long short is the rest of the world does not have confidence in our economic system right now because its not profitable. too many people going under. too many jobs lost. and they're not buying in as much as they would have say, 20 years ago.

and rest assured those that are buying are looking for something for their money.

The "rest of the world" is confident enough in our economic system to be buying our debt at near-record low rates. Apparently, the "Rest of the world" has more confidence than you.

as for the president printing money - i am still laughing at you over that one. right at this moment our dollar is only worth .76 euros and .72 of the pound. its actually down from previous days.

so our dollar is becoming useless whether or not they print more money.

The president doesn't control the monetary base, despite whatever you might find humorous about that. Do you think the fluctuation in the Euro is a problem? Do you think Eurozone debt is cheaper (ALA less risky) than ours?

[rckirby]

This was the sleight of hand that was going on while they had everyone "outraged" at AIG.

This is the last ditch effort to save a brain-dead economy and unfortunately most people have no idea what it will bring.

We are in un-charted territory as a country now.

It is the death knell and the average man on the street has no clue.

So, all you libs out there who aren't worried? Good on you. Sometimes ignorance is bliss...........for a little while.

[DCinNC]

The FED is almost out of ammunition. Their fraudulent activities are finally catching up to them. But they won't bow out gracefully...they will destroy the currency before control over our economy is yanked from their greedy little hands.

[animalnut]

It is not good, Samurai. That is precisely why they have shifted all the focus and faux outrage on AIG. Anything to deflect. Transparancy my rosy red butt.

[animalnut]

Actually - I would disagree with you.

The reaction of the world to Obama's policies is a clear lack of confidence in American T-bills.

Nobody is buying them.

So now the FED is forced to buy them because nobody else wants them.

The fact that your T-bills are worthless to the world falls on the shoulders of your government - and it's chosen policies.

Amazing, CJ, that you understand Obama's agenda so much better than many Americans! You're spot on.

[rckirby]

Amazing, CJ, that you understand Obama's agenda so much better than many Americans! You're spot on.

Exactly right, and I am appalled that this isn't on the front page.

I realize its so big that no one can get their head around it, but it is, by far, the most disastrous thing that could happen to this country.

We've had the dot.com bubbles.....the real estate bubbles......now we are in the DOLLAR bubble.....and no one seems to get it.

[Tex Mex]

Because there will likely be massive inflation and then after that another recession. What we could have gotten through in a year or two will take much much longer now. It amounts to another tax increase.

45 min video From the Ludwig Von Mises Institute explaining how the Federal Reserve manipulates money supply:

http://mises.org:88/Fed

It was made in 1995 and features Ron Paul but still reflects the economic policies of today.

[darknessesedge]

More here:
http://www.iht.com/articles/2009/03/18/business/fed.php

Okay, why does that NOT sound good? :rolleyes:

pretty much somes up the old adage of pulling something out of 1's butt

[samurai7]

I think this is an excellent idea. Just look at how well it is working in Zimbabwe. The only thing we need now is an arrogant, elitist liberal to step in as our benevolent dictator. I wonder who could fill those shoes?

Like Obama doesn't fit the bill? :rolleyes:

;)

[samurai7]

The "idiots the voters" didn't elect the Federal Reserve board.

No, they just created the situation with a two huge porkulus bills that gave the Fed the excuse to pull this.

:rolleyes:

[samurai7]

Obama can't "print more money". That's the Fed's job, and the Fed doesn't work for Obama.

No, Obama just works to cause the problems the Fed has to try and solve.

:rolleyes:

[samurai7]

Yesterday's decision by the fed to inject a trillion dollars into the financial sector had nothing to do with Obama's plans.

Oh BS alert!!!!!!!!!!1 :))

Yeah, the Obama financial mess had nooooooooooothing to do with the actions of the Fed.

:)) :)) :))

Cut it out! You are killing me! :))

[7426k]

Oh BS alert!!!!!!!!!!1 :))

Yeah, the Obama financial mess had nooooooooooothing to do with the actions of the Fed.

:)) :)) :))

Cut it out! You are killing me! :))

Do you really need to be educated on the relationship between the Federal Reserve and the administration?

Now THAT is funny.

Why do you call it the "Obama" financial mess?

[RickRhetoric]

There's another news article today from the Associated Press which actually says in its first paragraph, that the Federal Reserve is printing money to help shore up the housing industry mess. Again in the sixth paragraph, it reports the feds are printing money.

The article referenced by the OP says the feds are "pumping" money into the system.

Herewith is the Associated Press article which reports, in essence, that Obama is PRINTING money to foster his socialist agenda.

Once all this monopoly money saturates the economy, the markets will collapse and hyperinflation will render Obama Dollars useless.

http://www.fayobserver.com/article?id=321600

[Tex Mex]

It amounts to another tax increase.

45 min video From the Ludwig Von Mises Institute explaining how the Federal Reserve manipulates money supply:

http://mises.org:88/Fed

It was made in 1995 and features Ron Paul but still reflects the economic policies of today. I am going to slip another plug for the Federal Reserve video by the Ludwig Von Mises Institute.


http://mises.org:88/Fed

It's a very basic 8th grade level instructional program but very advanced for the average American voter. There is an obvious agenda to the documentary but it strangely enough predicts our current economic problems quite well.

[jrmarlin2000]

There's another news article today from the Associated Press which actually says in its first paragraph, that the Federal Reserve is printing money to help shore up the housing industry mess. Again in the sixth paragraph, it reports the feds are printing money.

The article referenced by the OP says the feds are "pumping" money into the system.

Herewith is the Associated Press article which reports, in essence, that Obama is PRINTING money to foster his socialist agenda.

Once all this monopoly money saturates the economy, the markets will collapse and hyperinflation will render Obama Dollars useless.

http://www.fayobserver.com/article?id=321600
Rick, this is something that should have been learned in the 70s when it happened and hyperinflation began -- it broke Carter. Literally. He had no defense nor will Obama. Carter had a worse situation than Obama - -which happened MID term. Something a lot of voters were not even alive to witness. It was ugly then and it will be ugly now. It was when this happened that the Republicans took over DC and things got done. Reagan might be a bad dude to all Democrats but he did know how to pull our economy up by its boot straps and got us productive, happy and whole again -- something we've enjoyed pretty much non-stop for almost 25 years. Just say to yourself 2010... say it like a mantra and TALK to people around you.

On another thread I said this and its completely true -- it is our jobs to inform and get people talking -- word of mouth is better than CBS. The colonists didn't have CBS in 1776 -- and they got their act together. That what people have to do now.

Seems to me, Obama is more concerned about the people in Iran than his own constituency base. And that's a very sad thing considering we all know foreign policy is not his 'thing.'

[Roberts_the_man]

Rick, this is something that should have been learned in the 70s when it happened and hyperinflation began -- it broke Carter. Literally. He had no defense nor will Obama. Carter had a worse situation than Obama - -which happened MID term. Something a lot of voters were not even alive to witness. It was ugly then and it will be ugly now. It was when this happened that the Republicans took over DC and things got done. Reagan might be a bad dude to all Democrats but he did know how to pull our economy up by its boot straps and got us productive, happy and whole again -- something we've enjoyed pretty much non-stop for almost 25 years. Just say to yourself 2010... say it like a mantra and TALK to people around you.

On another thread I said this and its completely true -- it is our jobs to inform and get people talking -- word of mouth is better than CBS. The colonists didn't have CBS in 1776 -- and they got their act together. That what people have to do now.

Seems to me, Obama is more concerned about the people in Iran than his own constituency base. And that's a very sad thing considering we all know foreign policy is not his 'thing.'

This current situation is worse because it might have been planned from the outside...

AIG , the banks , the mortgage crisis, etc. were all brought on by economic policies being pushed as far back Carter and before, but the recent crash happened because a huge anount of money was withdrawn from hedge funds in a period of less than 24 hours.

AIG for instance was invested in those hedge funds and lost their shirts.

We've never experienced hyper-inflation the likes of what was experienced in pre-WW2 Germany...

The German government to prop up the mark started printing massive amounts of worthless paper money.

Wheelbarrows of money were needed just to buy a loaf of bread.

Social upheaval was the result and the German people looked for a leader to lead them out of the malaise...

Ultimately the blame was placed on the Jews for the collapse of the economy and they ended up being imprisoned and executed in the concentration camps.

The rest is history.

Can't happen here?

Shouldn't have happened in pre-WW2 germany either.


There are outside forces and people w/in our country that would be more than happy to blame capitalism as a flawed system and re-educate the huddled masses through media propaganda and then encourage the mis-informed masses to move towards marxism and "prosperity" instead.