Central Bank Treads Into Once-Taboo Realm

Central Bank Treads Into Once-Taboo Realm

online.wsj.com

The Federal Reserve will print money to buy nearly as much U.S. Treasury debt in the next eight months as the U.S. government will issue.

Between now and June, the Fed will be purchasing $110 billion of Treasury notes and bonds a month, $75 billion a month in its new program and $35 billion a month to replace mortgage bonds in its portfolio that are maturing. In the same period, the Treasury will be issuing about $114 billion of new debt each month

(visit the link for the full news article)

I'm doubtful this will produce any noticible results, but I could be wrong. A quote in the article pretty much sums up what I feel about this decision "Throwing money out of a helicopter doesn't do any good," Mr. Mantega said. What do my fellow ATS members think about the Fed's decision to buy more U.S. Treasury debt?





online.wsj.com
(visit the link for the full news article)

reply to post by jganer


Well , it seems to be Helping the FANTASY Stock Market Right Now . Other than that , a year from now the U.S. Dollar won't be worth a Plug Nickel .....

Don't hold paper plain and simple. If you have paper assets turn them into tangible assets and fast. This will definitely speed up the process of devaluing the dollar.

Boy sheeple sure are going to be pissed when a Big Mac costs $20!

Ron Paul for President?!!!

Been trying to tell people this for the last 3 days.

When the Fed starts buying T-bonds at this rate the only for seeable reason why is to collapse the dollar in no time flat. Its bye bye for the dollar bill. Not a matter of if any longer, it's only a matter of when. Now we're just beating a dead horse.

Pretty soon China is going to want to get rid of all the American debt they own... I guess the US could barter with major cities and real estate....


It makes me even more uncomfortable about the whole situation that the media is all over this. the fed tried to do this on the sly while the public was being 'distracted' by the mid terms, but really the entire public is quickly becoming aware that we're being sold out! The pace feels quickened, as if things are getting more urgent because they know things are falling apart underneath them.

This is probably a stupid question, but why does the Fed get to just go print a bunch of money to buy something, but I can't.

Originally posted by W3RLIED2
Been trying to tell people this for the last 3 days.

When the Fed starts buying T-bonds at this rate the only for seeable reason why is to collapse the dollar in no time flat. Its bye bye for the dollar bill. Not a matter of if any longer, it's only a matter of when. Now we're just beating a dead horse.

Pretty soon China is going to want to get rid of all the American debt they own... I guess the US could barter with major cities and real estate....

It makes me even more uncomfortable about the whole situation that the media is all over this. the fed tried to do this on the sly while the public was being 'distracted' by the mid terms, but really the entire public is quickly becoming aware that we're being sold out! The pace feels quickened, as if things are getting more urgent because they know things are falling apart underneath them.

I totally agree with you and I've said close to the same thing over the course of 2 years. But when a country out and out says we will buy 100 + billion dollars a month worth of debt until june, that is the last gasps of a countries currency and the start of hyperinflation. I've been wondering also why the media has jumped with both feet into this situation. What I believe is that whatever is going to happen it's going to happen sometime next year or the start of next year. Since our GDP every year is 12 trillion dollars, and this program he is doing was first said to be just 600 billion but in other articles will go up to 1.2 trillion. This is essentially printing up 10% of GDP (which we already have a debt ration close to 90% of that already before this) to buy up Treasuries. You don't do that unless nobody is buying your debt.

Originally posted by Zanti Misfit
reply to post by jganer

 

Well , it seems to be Helping the FANTASY Stock Market Right Now . Other than that , a year from now the U.S. Dollar won't be worth a Plug Nickel .....

But... How much are you willing to wager? That's the real question...

It's real easy to say that it won't be worth a plugged nickel, however when you have to put a visceral value to your certainty, you get a much better idea....

Originally posted by W3RLIED2
Pretty soon China is going to want to get rid of all the American debt they own... I guess the US could barter with major cities and real estate....

Welcome to Detroit MI
once home to the great
GM, now home to the great
communist republic of China.

Kinda gives a new meaning to
the term:

Chinatown

doesn't it??

I wonder what the Chinese will
rename it as:

Little Beijing !!!!

reply to post by boondock-saint


Yes, precisely.

2 (sorry mods, don't normally do that.)

reply to post by HunkaHunka


" It's real easy to say that it won't be worth a plugged nickel, however when you have to put a visceral value to your certainty, you get a much better idea...."

So , what do you think that " Visceral Value " Will be say , around June 2011 ? One Phat Dime ?

so does this mean if China pulls out its treasuries that the dollar will fall even further and that the US will inevitably default on the loans sooner than expected and that any entity that owns US treasuries still would actually be the owners of America and everything that America owns as collateral until the debt can be repaid which is essentially never?
or am i just mistaken?

Originally posted by new_here
This is probably a stupid question, but why does the Fed get to just go print a bunch of money to buy something, but I can't.

just wanted to say with a bit of alchemy you can turn 20$ bills into 100$ bills and use that money to buy anything you couldn't afford with just 20$. its pretty easy

and also as to your 'why' question, they had the idea first, that's why. otherwise you could have. sorry dude.

Originally posted by hoghead cheese

It makes me even more uncomfortable about the whole situation that the media is all over this.

The mainstream media is fed through advertising dollars paid by corporate America to garner interest in their retail operations and offerings.

If there is no revenue from which to draw the funds necessary to advertise to get the sheeple to buy more stuff, well where does that leave corporate America and eventually the mainstream media?

It leaves their cupboards pretty darned bare right off the get go.

Now, if they can keep John and Joan Q. Public from understanding the ramifications of this printing of whacks-o-dough, then some of them might just buy into the hype that the world is saved, all is good and now's the time to wrack up a bunch more consumer debt through the purchase of a gazillion dollars in Christmas goodies for the kids . . . all the while the foundation is crumbling around them.

Think of it as vultures picking the last few sinews of carrion off the carcass.

It does seem that QE ( even the expectation of it really) can juice the stock market, but the Dow at 20000 means little to the common man if bread hits $5 a loaf and gas hits $7 a gallon. With global wage arbitrage, and therefore no bargaining power for labor to increase wages, the increase in prices due to the increase of the price of commodities that started while QE2 to was still being proposed will destroy discretionary spending.
QE2 will surely fail in fixing the economy, but it will enable bankers to keep getting fat bonuses.

Hyperinflation...here we come.

Let's just bypass the PTB and join to get rid of money, and thereby profit as a motivation.

reply to post by jganer

Originally posted by Zanti Misfit
reply to post by HunkaHunka

 

" It's real easy to say that it won't be worth a plugged nickel, however when you have to put a visceral value to your certainty, you get a much better idea...."

So , what do you think that " Visceral Value " Will be say , around June 2011 ? One Phat Dime ?

I make bets in this everyday on the FX...

I keep making profits... How about you?