Fed commits extra $45 billion a month to bond-buying program

The Fed will spend $45 billion a month on long-term Treasury purchases to replace a previous bond-purchase program of an equal size. And it will keep buying $40 billion a month in mortgage bonds.

Source

With a budget deficit of only 65 billion away from the 16,400 billion limit, an average monthly deficit of around 150 billion per month, the Fed is printing money and injecting even more money in the "economy" than last year.

This has only led to an even greater deficit. The funds aren't going to the real economy, but lead to the purchase of quoted shares. The projected growth is therefore entirely false and only reflects stock market gains, but doesn't change anything to the underlying situation, i.e. to build a healthy industry and economy.

There is only an increasing consumer demand, pushing people deeper into debt because money is cheap.
It is not because the listed shares rise on Wall Street, that America is out of trouble.

On the contrary, it's fading away. The Fed only does good to Wall Street traders and investors, but is disastrous for America and the rest of the world.

The real disaster is yet to come.

reply to post by WhereIsTheBatman

Hang on guys... this crash isn't coming long term. It's coming quick and it's gonna be BAD. I can't believe this.... Treasury is doubling down on complete, total fiscal insanity to read this.

40 Billion a MONTH for Q-E 3 was the nails to our collective economic coffin. That totaled another $480 Billion or almost HALF TRILLION a year in annual deficit. Just that one move.....and by comparison for perspective, George Bush's highest one year deficit was just over 500 Billion total.

Now with this, another $45 billion a month?! Guys.... I have to wonder in a dead serious way if this isn't a very concerted effort to crash the system on purpose. not Tin Foil hat speculation, but a no kidding appraisal of what we're watching.

That's an additional $540 Billion per year. Combined, we're looking at another $940 BILLION dollars ...or just a hair under ONE TRILLION in annual deficit added since September of this year for obligations.

This just can't hold much longer. It can't. Math doesn't bend like this.

Originally posted by Wrabbit2000



Now with this, another $45 billion a month?! Guys.... I have to wonder in a dead serious way if this isn't a very concerted effort to crash the system on purpose.

This just can't hold much longer. It can't. Math doesn't bend like this.

Of course.. I don't like that I live in a bigger city now.. It's making me very nervous.. The planned end of the world disaster is almost here.. Too bad this one isn't fun to speculate on. Just cold starving facts of life..

reply to post by WhereIsTheBatman


The banks are broke! They have sooooo much unaccounted money in the derivatives markets that they cannot back up now, this move is nothing more than the FED stealing what money the working folks have left! Just watch! The dollar is going to crash soon and the banks along with it, and our wonderful government will once again tell us little people that it will be US who have to make the sacrifices while the criminal FED and it's banking friends continue to steal what little bit working Americans have left.

If you are sitting there right now saying, "Well I just don't see it, my life is going pretty well right now." Buy some stock in vaseline, your day is soon coming!!!

Originally posted by Dustytoad

Originally posted by Wrabbit2000



Now with this, another $45 billion a month?! Guys.... I have to wonder in a dead serious way if this isn't a very concerted effort to crash the system on purpose.

This just can't hold much longer. It can't. Math doesn't bend like this.

Of course.. I don't like that I live in a bigger city now.. It's making me very nervous.. The planned end of the world disaster is almost here.. Too bad this one isn't fun to speculate on. Just cold starving facts of life..

edit on 12/12/2012 by Dustytoad because: (no reason given)

Yeah, I know what you mean. Speculation was fun when we weren't seeing real world moves likely to bring the events about and make it all happen. Then, you're right. The fun of war gaming things turns to ...I have family in the L.A. Basin if things go badly ...and that's one of a dozen places I'd never want to be during an economic collapse.

I hope people do read these threads and what so many are saying with factual references to support it ...and at least take the basic common sense prep steps of 4-6 weeks absolute min. food, water, batteries for everything from lights to gizmos to pass the time. No telling how all this plays out ...but I don't think there will be anything slow about it. They'll keep the rosey facade going to the very last minute possible ..then the facade just kinda falls and we get Hyperinflation with what that may look like in a nation as large as this. THAT part IS a first.

I'm reading articles that put that figure to 85 to 88 billion per month??? Apparently it's called "Operation Twist".

Buy a wheel barrel. Everyone will need one to hold the money it will take to buy a loaf of bread. Printing money obviously makes it worth less.

reply to post by RedShirt73

I thought you were kidding or being sarcastic. I was actually thinking it was bad humor under the circumstances...but Good God...you're not joking. No less a source than Bloomberg Business said it was nicknamed "Operation Twist".

Twist what? Every last dollar? every last bit of life from a dying economy they've killed themselves? I'm honestly offended by how cheeky that is, to use a British term. The nerve of them....I mean really. So we laugh or cry? I know I've been insulted in there somewhere, as a member of the public and unwashed masses...but I'm not even sure what level they meant the insult AT.

Things are about get real, yo.

Perhaps the system is so badly broken that the only sollution is to wipe it out and start all over from scratch?

I'm sure glad my net worth is practically nothing, including investments. The less you currently have, the less you stand to loose. We all know that only a few people at the very top will come out of this ahead.

the Fed said it will also keep spending $85 billion a month on bond purchases to drive down long-term borrowing costs and stimulate economic growth.

they said 'stimulate' when, in reality, they should have said 'simulate'

that's a huge difference.

reply to post by tinhattribunal

Oh I am feeling stimulated alright. Cattle prods and places the sun never shines might properly describe the warm tingly sensation I've gotten from all this hopey changey stuff. I would definitely stick with stimulate.

Why the more I consider the wonders of compound interest on the figures we have here? The more I feel a tingly feeling in my stomach too. It's not anticipation. No... It's..

Originally posted by MystikMushroom
Things are about get real, yo.

Perhaps the system is so badly broken that the only sollution is to wipe it out and start all over from scratch?

I'm sure glad my net worth is practically nothing, including investments. The less you currently have, the less you stand to loose. We all know that only a few people at the very top will come out of this ahead.

People often say oh I can live without internet and electricity. It would be a good change... Food doesn't come to the man with no money. Have an ax? If not no warm food. Have a Farm? If not no food. In shape? If not you are not traveling. Angry hungry humans running around trying to get at my food, my girl, and I don't have a weapon? I'm dead.

People stand to lose much more than money. Private Armies will guard the rest(power people), unless order is kept under a fascist or communist government. I suspect order will be tried, but back ups are always in place, and I don't see hungry armed Americans feeling like waiting for government at that point.

I think this is the true drive of disarming Americans or maybe the final push for no guns and fascist government comes after the collapse as a better than death solution that almost all would accept...

Perspectives will be changed forever whatever happens.

reply to post by WhereIsTheBatman

Of-course they are. Neither domestic nor foreign investors wanna buy our worthless crap anymore.

So the lender of "last resort", the "Federal Reserve" now has to prop up this country with our run away spending. Greece style collapse, here we come.


Yes Mr. Greenspan, we can, but as you SHOULD know, it will be in near worthless dollars.

Ohhhh dear... I would say "I'm glad I'm not living in America", but this will obviously affect the entire world.. except for maybe Iceland lol... They were smart and got out before SHTF.

Perhaps I'm a bit cynical and jaded, but this entire gong show I find rather hilarious...
Bring it on.. we deserve what is coming our way. For too long we lived in selfish, shallow, lazy, apathetic lives, now we pay the price.
Kinda unfortunate, but hey.... karma's a bitch.

Just a couple things to add that I didn't see touched on in earlier posts.

The new $45 billion per month treasury purchases are not the same as Operation Twist. Operation Twist was the Fed selling short term treasuries to buy long term treasuries or "sterilized" easing. No money was created they just brought down long term rates. Not that this was benign, but it was not money printing in the traditional sense. What they just announced is in fact money printing. The reason? Likely they just ran out of short term treasuries to sell.

On top of this, the Fed has stated that it will now no longer give a specific date range for when this easing will stop. Instead they are now stating that they will stop when the unemployment number is below 6.5%. With the labor force participation rate as low as it is, who knows when that will be.

If inflation gets high enough to start eating away at corporate cash piles, look out.

The scary part is that the Government almost has to do this because the Central Banks of the world are turning away from America and US bonds.

What happens if everyone dumps the USD? The only reason americans can live so well is because America has the Reserve Status. Do Americans think any other nation can run up a 16 trillion dollar debt? The world can see that America is not good for it. Will there be another Credit Downgrade? Will the world just let America try to devalue its currency in an attempt to get its economy going again? The world already has a 'basket reserve'. country are moving away from the whole 'petrodollar' set up. China keeps getting more and more powerful. How on earth can America keep the Reserve Currency? How can America pay its interest on the 16 trillion if it loses the Reserve Status?

There seems to be no solutions.

What does this mean for the fiscal cliff on jan 1st?

Have you ever noticed that when people have nothing to lose, they usually lose it?

Once goverment gets into the business of business so to speak, everything gets hooped up.

The trouble with this philosophy is that someone has to cover their losses.

Not a good sign for the beleaguered American Middle Class taxpayer, since they cannot buy their way out of the mess. They're simply too busy paying interest on the debt the privately owned Fed has so graciously made for them.

Dear Mr. Bernanke:

Ever walk into a store and see that nobody is buying the stuff on the shelves because they see it's worthless crap that nobody really wants to have, and then see the shop owner come through, load up a cart of that worthless crap and proceed to the checkout where they pay for it with someone else's money?

Sounds so absolutely assanine and friggin' riduculous, doesn't it.

Sincerely,

Mr. G. Poster