FED buys $600 billion in government bonds

[acidhead]

http://www.reuters.com/article/idUSTRE6A12IA20101104

WASHINGTON | Thu Nov 4, 2010 1:45am EDT

(Reuters) - The Federal Reserve launched a fresh effort to support a struggling U.S. economy on Wednesday, committing to buy $600 billion in government bonds despite concerns the program could do more harm than good.

continued....

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Ya think?!?!?!?!

Who blames who here?.... The D's and the R's are silent.

The FED is quasi-ran and largely ignored by the recent political porn taking place.

The market was wild today. The american $ lost some value, as expected(so much for the friendly pact among currency competing countries) and gold went from $1365per/oz - 1325. and ended the day at 1348............ !!!!!

Helllllllllllllllllllllllooooooooooooooooooooooooooooooooooo!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Edited November 4, 2010 by acidhead

[Godsnmbr1]

Shouldn't come as a surprise. No one else was going to buy long term treasuries...

Can't wait for QE3!

[Torgo]

It is quite interesting, is it not, that the total amount of debt the government is going to go into over the QE2 period is almost exactly equal to the amount of debt they will be buying.

I feel compelled to quote John Michael Greer, from the blog The Archdruid Report (just google it - it's a great place):

Many of my readers will have heard the calm and sanitized announcement this evening that the Federal Reserve Board will be buying $600 billion of US federal debt over the next seven months. I’m not sure how many of my readers have noted that this is the amount of debt the US government expects to issue over the next seven months. I’m even less sure how many of my readers have noticed that the Fed will be paying for these purchases by exercising its legal right to produce US dollars out of thin air. In other words, the United States is now printing money to pay its bills.

There may be an example somewhere in the long history of finance when a country has done this without facing catastrophic economic consequences in the fairly near term, but I don’t happen to know of one. Once a country starts covering its debts by way of the printing press, the collapse of its currency and its economy is pretty much a foregone conclusion. The exact way in which the consequences come due varies from case to case; the hyperinflation made famous by Weimar Germany and, more recently, Zimbabwe is only one of the options, and there are good reasons to think that this isn’t the most likely outcome just at the moment.

My own guess, for what it’s worth, is that we’re headed into a state of affairs that might as well be called hyperstagflation: the economy and money supply both contract, but the demand for dollars drops faster than the supply as holders of dollar-denominated assets scramble to cash in their dollars for anything that might preserve a fraction of their paper value. As in the stagflation of the Seventies, but much more drastically, prices go up while employment goes down until the economy shudders to a halt.

Now of course that’s far from the only possibility; we could see a straightforward deflationary collapse; we could also see increasingly reckless use of the printing press overwhelm the contraction of the money supply altogether and tip us into old-fashioned hyperinflation. What we won’t see for very much longer, though, is what currently passes for business as usual. I suspect a great many people in the financial community are aware of that – a supposition that gains some support from recent reports that corporate insiders in a range of industries are selling off their shares of their own companies’ stock at a record pace. I suspect the rest of us will become aware of it, too, as we approach the kind of economic, social, and (inevitably) political disruptions that people later describe in hushed tones to their grandchildren.

[Rastaman]

they'll "buy" it.... right...

[J.B.]

Launder it?

[Godsnmbr1]

Launder it?

Pull it out of their ass

[J.B.]

Pull it out of their ass

Ewwww. That's the opposite of laundering. That's. . . making it dirtier. Hahaha.

[Godsnmbr1]

Ewwww. That's the opposite of laundering. That's. . . making it dirtier. Hahaha.

Can't make it any dirtier. Right now, the USA is doing the equivalent of paying their credit card bills with counterfeit cash. The only difference is there's no one above them to call them on it. Or so they think...

I don't think most people have the slightest idea how fragile the state of our economy is right now.

[acidhead]

Can't make it any dirtier. Right now, the USA is doing the equivalent of paying their credit card bills with counterfeit cash. The only difference is there's no one above them to call them on it. Or so they think...

I don't think most people have the slightest idea how fragile the state of our economy is right now.

yeah...