The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,000,000!–Run-Away Inflation Coming Soon!

Posted on March 20, 2009. Filed under: Blogroll, Employment, Investments, Music, Politics, Rants, Raves, Resources, Taxes, Video | Tags: , , , , , , , , , , , |

Glenn Beck alerted the American people to what is happening with the U.S. Treasury and Federal Reserve:

Glenn Beck’s ‘One Thing’: 03-19-09

 

 

Federal Reserve Monetizes U.S. Debt While Americans Cry over AIG Bonuses. Glenn Beck

 

Peter Schiff 3/18/09 – Schiff Report Video Blog


 

No Risk of Hyperinflation Says Federal Reserve Chairman Ben Bernanke. Rest easy Glenn Beck

 

Jim Rogers “America is out of control” demise of the dollar

 

Jim Rogers the Dollar is Doomed 23 Mar 2009

 

Voices of Freedom: Ron Paul, Peter Schiff, and Jim Rogers school Obama, Bush, Bernanke, and Paulson

 

LOL

It’s not AIG. It’s the GOV…

Fed to pump another $1 trillion into U.S. economy

“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. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.

The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.

The idea was to encourage more economic activity by lowering interest rates, including those on home loans, and to help the financial system as it struggles under the crushing weight of bad loans and poor investments.

Investors responded with surprise and enthusiasm. The Dow Jones industrial average, which had been down about 50 points just before the announcement, jumped immediately and ended the day up almost 91 points at 7,486.58. Yields on long-term Treasury bonds dropped markedly, and analysts predicted that interest rates on fixed-rate mortgages would soon drop below 5 percent. …”

“…Since last September, the Fed’s lending programs have roughly doubled the size of its balance sheet, to about $1.8 trillion, from $900 billion. The actions announced on Wednesday are likely to expand that to well over $3 trillion over the next year.

Despite a trickle of encouraging data in the last few weeks, Fed officials were clearly still worried and in no mood to cut back on their emergency efforts.

Fed policy makers sharply reduced their economic forecasts in January, predicting that the economy would continue to experience steep contractions for the first half of 2009, that unemployment could approach 9 percent by the end of the year and that there was at least a small risk of a drop in consumer prices like those that Japan experienced for nearly a decade.

The Fed rarely buys long-term government bonds. The last occasion was nearly 50 years ago under different economic circumstances when it tried to reduce long-term interest rates while allowing short term rates to rise.”

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

 

Monetary Policy Rebooted

Francis Cianfrocca

“…The Federal Reserve announced a momentous shift in policy yesterday. Its import was easy to miss because, as always with the Fed, it was written in a jargon only superficially resembling English. But its intention is to take actions that will deeply shift the policy landscape, probably to a much greater extent than Congress’s various stimulus plans.

The Fed announced an American version of what has been called “quantitative easing,” or QE. The Japanese have done this before, and the British got into it a few weeks ago. You can think of it, with no loss of accuracy, as inflation.

QE is what monetary authorities resort to when policy interest rates go to zero, which is where they are now. If you can’t reduce the price of money any further, you simply increase the amount of money. The Fed will be monetizing (purchasing) about $750 billion in mortgage-backed securities and about $300 billion in straight Treasury debt.

They’ve purchased mortgage paper before (last December), but the Treasury debt purchases are new. And the bond market’s reaction to the news was electric, as interest rates fell sharply, particularly for the 10-year note. Inflation-sensitive commodities like oil, gold and copper also shot up 5% or more in price, and are holding those gains this morning. The news is also a mild positive for the stock market, which can benefit from inflation.

What is Fed Chairman Ben Bernanke really trying to do? He wants to unfreeze the “credit crunch” that is making it too expensive or even impossible for U.S. consumers and businesses to borrow money, which was the trigger for the current recession. The Fed directly controls only the shortest-term interest rates. But consumer purchases (including mortgages) and business investments are sensitive to longer-term interest rates. QE is the Fed’s way of trying to reduce real interest rates in the 2 to 10-year range of the spectrum.

This is also the biggest experiment in monetary policy in history. Milton Friedman is known for having explained the genesis of the Great Depression in monetary terms. Bernanke, a close student of the early Depression, is determined to prevent the wicked asset deflation of 1930-32 that ruined so many lives. At what cost? Well, the Fed’s balance sheet just grew by $1.15 trillion: it’s now 50% bigger than it was a day ago. That’s a scary amount of inflation. …”

“…What no one really knows yet is the exact linkage between the formation of new money, and the formation of new credit. Bernanke and his Fed are gambling that a giant pulse of monetary inflation will reignite private lending. We can only hope they’ve pointed their fire hose at the right problem.

For every lender, there’s a borrower. The Fed will succeed if the problem in credit markets is the reluctance of lenders to write new loans. But if the problem turns out to be a lack of demand for credit, then all we’ll get out of this is stagflation.”

http://www.commentarymagazine.com/blogs/index.php/cianfrocca/59211 

I will add more to this post Monday.

I need to do some more research.

Consider this a heads-up!

This is not good for it will devalue the dollar and could lead to inflation if the Federal Reserve does not quickly reduce the money supply and raise interest rates once inflation rears it head starting in 2011.

This is truly a dangerous game and if your timing is off will lead to hyperinflation.

The Federal Reserve Chairman understands this but is currently more concerned about deflation and a even worse recession in terms of duration from two to four years and unemployment rates exceeding 10%.

Both fiscal policy and monetary policy are scaring people and this in and of itself is enough to prolong the return of consumer and business confidence.

President Obama is proving once again he is One Big Awful Mistake America.

President Obama neither understand nor really cares about the financial crisis and his only concern is the establishment of his radical socialist agenda in the United States by remaining in power.

The President will say and do anything to make this a reality.

While the Fed Chairman is on the side of free markets, it is an open question whether monetary policy alone can counter the fiscal irresponsibility of the Obama administration.–massively huge deficits and stimulus bills. Instead I am afraid the Federal Reserve is prepared to enable socialism in America by purchasing US Treasury bond and notes used to finance the massive deficits for the next four or eight years. This is madness for it is printing money and will result in hyperinflation. Speculation is already starting again in oil, where actual demand for oil has declined. The investment banks are at it again! Enough is enough. Are there an adults in Washington D.C. or just mad fools?

Also, the potential for the biggest tax increase in US history in the form of dramatic increases in the general price level will happen in 2011 on top of Obama’s own huge tax increase.

Inflation rates exceeding 10% would hurt low income and those on a fixed income the most and would wipe out any tax decreases obtained from lower tax rates or earned income credits.

This would be an economic disaster of the first order and would result in a jobless recovery and stagflation, high unemployment rates (over 10%)  and high inflation rates (over 10%)–a repeat but only worse of the Carter years–call it Obama’s 1010 Depression!

Join the second American Revolution before it is too late.

Second American Revolution–Tea Party Celebrations–Washington Fair–July 4, 2009–An Open Invitation To The American People

American People’s Plan = 6 Month Tax Holiday + FairTax = Real Hope + Real Change!–Millions To March On Washington D.C. Saturday, July 4, 2009! Revised and Updated

Beck Speaks to the 21st Century Thomas Paine

Beck found and interviewed the creator of the hugely successful viral video “The Second American Revolution.” It is a must-see, my friends.

 

Background Articles and Videos

 

Dallas Fed’s Fisher: The Fed Should Staunchly Resist Monetizing the Debt

Richard Fisher, president of the Dallas Fed, says “from time immemorial any central banker worth his or her salt has been genetically unable to tolerate inflation.” That means, among other things, never, ever voting to monetize the debt: …” 

http://economistsview.typepad.com/economistsview/2005/10/dallas_feds_fis.html

 

Monetization

Monetization is the process of converting or establishing something into legal tender. It usually refers to the printing of banknotes by central banks, but things such as gold, diamonds and emeralds, and art can also be monetized by Standby Letter of Credit brokers. Even intrinsically worthless items can be made into money, as long as they are difficult to make or acquire. Monetization may also refer to exchanging securities for currency, selling a possession, charging for something that used to be free or making money on goods or services that were previously unprofitable.

Debt monetization occurs when a nation’s central bank (e.g. the Federal Reserve in the United States) buys government bonds. [1] If a government’s expenses exceed its tax revenue, if nothing is done the government will draw resources (capital) out of the private market. Since there is a limited amount of capital available in the market, there will be less available to fund business growth if the government takes out a substantial portion. If the debt is monetized, the capital is thereby returned to the private market.

Excessive debt monetization can be inflationary, which in some eyes can be seen as a flat tax because the ultimate result is that the government acquires additional funds and the currency decreases in value.[citation needed] However, monetization helps the government temporarily to meet its short term commitments at the beginning.[citation needed] On the other hand, some degree of debt monetization is useful for increasing the money supply, to keep up with increased production or economic growth.

Hence it is a primary tool of the Federal Reserve in managing interest rates. Excessive debt monetization has the drawback of increasing the twin deficit. That is, when government financing is increased, along with interest rates and foreign capital, the trade deficit also goes up along with the budget deficit.[citation needed]

http://en.wikipedia.org/wiki/Monetize

The David Copperfield School of Economic Recovery

By Michelle Malkin  

“…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:

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. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed’s measures in the last year.

The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.

The illusion melts: …”

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

 

The David Copperfield School of Economic Recovery, Pt. II

By Michelle Malkin  

Now what?

Last week, the Obama administration brought us a $1 trillion Federal Reserve magic trick hatched by the David Copperfield School of Economic Recovery — printing up a trillion bucks and “pumping it into the U.S. economy”…by buying up bonds and mortgage securities…sold and backed by the government.

Today, hapless, truth-challenged tax cheat Treasury Secretary Tim Geithner officially unveils another $1 trillion magic trick. Instead of letting failed banks fail, we’ll have another desperately massive and massively desperate attempt to prop them up through a “public private partnership investment program.” Eager to get the still-unfolding Bonus-gate behind them (see “Geithner Aides Worked With AIG for Months on Bonuses” and “AIG paid over $218 million in bonus payments”), Team Obama leaked details of the plan over the weekend. World stock markets were up this morning, full of audaciously blind hope.

Geithner ’s WSJ op-ed this morning lays out some of the details he failed to deliver when he first unveiled his non-plan plan a month ago: …”

http://michellemalkin.com/2009/03/23/the-david-copperfield-school-of-economic-recovery-pt-ii/

 

The Chairman Part 1

http://www.youtube.com/watch?v=odPfHY4ekHA&feature=related 

The Chairman Part 2 

http://www.youtube.com/watch?v=e0zY8o0laZY

Ron Paul: Quit bankrupting this country & MONITOR THE FEDERAL RESERVE

 

Market 2 Market- FX: Helicopter Ben
 

 

Ron Paul tells Bernanke you can’t reinflate the bubble 2-25-09

 

CNBC: Ron Paul’s question makes Ben Bernake’s voice quiver

09

 

Money, Banking & The Federal Reserve ( part 1 of 4 )

 

Money, Banking & The Federal Reserve ( part 2 of 4 )

 

Money, Banking & The Federal Reserve ( part 3 of 4 )

 

Money, Banking & The Federal Reserve ( part 4 of 4 )


 

Bernanke Speaks on Economy (Part 1) – Bloomberg

 

Bernanke Speaks on Economy (Part 2) – Bloomberg

 

Related Posts On Pronk Palisades

Geithner’s Government Gamble–Vampire Vulture Ventures–Heads The Vermin Win–Tails The American People Lose!

Ban Bailouts–Stop Inflation Now (SIN)–Stop Socialism of Losses!

Mark-To-Market Accounting Rules Driving Banks To Bailouts–Change The Rules–Fed Chair Bernanke Explains!–Videos

Obama’s Marxist Magic Mess–Big Bad Bonuses–Radical Socialist Sleight of Hand

Second American Revolution–Tea Party Celebrations–Washington Fair–July 4, 2009–An Open Invitation To The American People

American People’s Plan = 6 Month Tax Holiday + FairTax = Real Hope + Real Change!–Millions To March On Washington D.C. Saturday, July 4, 2009! Revised and Updated


Make a Comment

Leave a Reply to Banking Cartel’s Public Relations Campaign Continues:Federal Reserve Chairman Ben Bernanke On The Record « Pronk Palisades Cancel reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

7 Responses to “The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,000,000!–Run-Away Inflation Coming Soon!”

RSS Feed for Pronk Palisades Comments RSS Feed

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]

[…] The Monetarization of The Debt and Quantitative Easing: The Federal Reserve is printing $1,000,000,0… […]


Where's The Comment Form?

Liked it here?
Why not try sites on the blogroll...

%d bloggers like this: