Federal Reserve Monetizes U.S. Government Treasury Debt By Printing Money–Quantitative Easing (QE2)–Devalues U.S Currency–Banks Steal American People’s Purchasing Power!

Posted on November 3, 2010. Filed under: Blogroll, Business, Communications, Demographics, Economics, Employment, Energy, Federal Government, Fiscal Policy, government, government spending, history, Immigration, Investments, Language, Law, liberty, Life, Links, Monetary Policy, People, Philosophy, Politics, Psychology, Rants, Raves, Regulations, Resources, Security, Taxes, Video, Wisdom | Tags: , , , , |

U.S. Debt Clock

http://www.usdebtclock.org/

http://www.captainscomments.com/comment/812

The FED’s magic with money

China warns risks of US Fed Reserve Quantitative Easing 2

Peter Schiff on FOX Business News 11-04-10

 

Fed to Buy Extra $600 Billion of Treasuries; Interest Rates to Stay Low

 

Peter Schiff – Republican Win, QE2 – Nov 3rd 2010

 

Quantitative Easing 2: US economy continues to sink (03Nov10)

 

CNBC: Fed’s Big Gamble–What Could Go Wrong?

 

Fed Chairman Ben Bernanke-speech- Disaster in the making

 

Jim Rickards Discusses Deflation, Hyperinflation and Velocity

 

MUFJ’s Brown Says U.S. Recovery Shows QE Is Not Needed

 

Thwaites Calls Fed Quantitative Easing `Reckless’ Policy

 

Greenspan: U.S. Playing `Dangerous Game’ on Stimulus

 

MSNBC w/ Cenk: Matt Taibi – Magic Money Printing Machine at The Fed

 

Grossman Says Fed QE May Cause Commodity Prices to Rise

Glenn Beck-11/03/10-A

 

Glenn Beck-11/03/10-B

 

Glenn Beck-11/03/10-C

 

Ron Paul to Bernanke : Continue Down Path of Socializing Our Entire Economy 5-5-09

 

Fall Of The Republic 6/14: The Presidency Of Barack H Obama

 

On October 15, 2010 Chairman of the Federal Reserve, Ben Bernanke, presented a speech entitled Monetary Policy Objectives and Tools in a Low-Inflation Environment at the Federal Reserve Bank of Boston’s  Conference on Revisiting Monetary Policy in a Low-Inflation Environment.

This speech pointed out that the Federal Opening Market Committee (FOMC) was about to embark on the purchase of Treasury securities with the objectives of reducing the continuing high unemployment rate and maintaining price stability.

Bernanke said:

“…the Federal Reserve remains committed to pursuing policies that promote our duel objectives of maximum employment and price stability. In particular, the FOMC is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time to levels consistent with our mandate. Of course, in considering possible further actions, the FOMC will take account of the potential costs and risks of nonconventional policies, and, as always, the Committee’s actions are contingent on incoming information about the economic outlook and financial conditions.”

On November 3, 2010, the Federal Reserve provided more details as the amount and duration its unconventional monetary policy that is commonly called money printing or “quantitative easing”.

The Federal Reserve stated in a press release that:

“…To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability. …”

The Federal Reserve’s cover story is simply not being bought by many economists and investment analysts that follow closely the Federal Reserve’s monetary policy.

The United States government has been running massive budgetary deficits of over $1,000 billion for the past two years that will continue into Fiscal Year 2011 and 2012 and over $900 billion in 2013

There is a strong suspicion that the United States Treasury is having increasing trouble selling it securities at Treasury bond and note  auctions.

Rather than the Obama Administration going to Congress for another stimulus package that would not be approved by the new Republican House majority, the U.S. Treasury Department could simply issue more Treasury bonds and notes to finance the budgetary deficits.

The Federal Reserve’s unconventional monetary policy better known as quantitative easing 2 would mean the Federal Reserve is an investor of last resort for Treasury bonds and notes when there is a shortage of other investors at the auctions.

The Federal Reserve will buy Treasuries not directly from the Treasury but from a third-party government security dealer or from a foreign country central bank who will act as a middle man or go between to get around the prohibition of the Federal Reserve buying Treasury securities directly from the Treasury Department.

The Federal Reserve would be monetizing Treasury debt by “printing money”  in exchange of Treasury bonds and notes.

The economic effect is the decline in the purchasing power or value of the U.S. dollar.

This is a hidden tax on all Americans holding U.S. dollars.

The purchasing power of their dollar currency holdings will buy less goods and service especially imports.

The prices of all goods and services would rise–inflation.

Once this becomes apparent, the Federal Reserve’s  dangerous unconventional monetary policy would have to be terminated and the Fed would have to revert back to a conventional tight monetary policy exit strategy to stop inflation by rising both the Federal Funds rate target and the sale of Treasury securities.

December 23, 2013 marks the 100 anniversary of the Federal Reserve.

By then I full expect that $1 in 1913 will be worth less than 1 cent.

The Federal Reserve System has been an abject failure in maintaining the price stability of the dollar.

The time has arrived for Congress to stop the Federal Reserve bank cartel from stealing from the American people by devaluing the U.S. dollar.

What needs to done to create jobs and ensure price stability?

First, cut Federal spending.

Second, balance the budget!

Third, close permanently entire Federal Departments.

Fourth, end the Fed.

Do none of the above and  the American people will throw both Democrats and Republicans out of office in 2012, 2014 and 2016.

 

Dr. Ron Paul says Rand and I will introduce legislation to End the Fed! First day!

 

 

Background Articles and Videos

Press Release

Federal Reserve Press Release

Release Date: November 3, 2010

For immediate release

Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits. Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.

http://federalreserve.gov/newsevents/press/monetary/20101103a.htm

Volcker: Fed Plan an Illusion, Won’t Boost Economy

“…”The thought that you can create a prosperous economy by inflating is an illusion, in my judgment,” he told reporters after his speech. “And we should never forget that. I thought we’d learned that lesson and I hope we continue to learn that lesson.”

The Fed faces a dilemma in balancing the aim of boosting the economy now while avoiding fears of a future jump in inflation due to the monetary stimulus, said Volcker, who as central bank chairman hiked interest rates aggressively to tame inflation.

“The influence of this kind of action on longer term interest rates, in particular, is ambiguous because the immediate impact of buying bonds ought to be to drive bond prices up and interest rates down,” he said. “But if people get concerned about longer run inflationary impacts, the effects go in the other direction.”

In theory, the Fed’s action is expected to lower interest rates because bond prices and interest rates – also known as yields – move in opposite directions. The yield is the fixed amount of annual interest paid to the owner of the bond expressed as a percentage of the bond price, so the extra demand created by the Fed’s purchases should push bond prices up and lower the yield.

But when investors fear inflation will be higher in the future they demand that bonds pay a higher interest rate to protect their investment from the value-eroding effects of inflation. …”

http://www.moneynews.com/StreetTalk/volcker-fed-dollar-bernanke/2010/11/05/id/376158?s=al&promo_code=B0ED-1

U.S. Treasury to Sell $72 Billion in Long-Term Debt

By Rebecca Christie – // Nov 3, 2010

“…The Treasury has been scaling back auction sizes, after expanding debt sales to finance annual budget deficits exceeding $1 trillion for the past two years. Bond dealers predict deficits of $1.214 trillion in fiscal 2011, $1.023 trillion in 2012 and $906 billion in 2013, according to a survey provided to the Treasury before this week’s announcements. …”

“…The question arose whether the Fed and the Treasury were working at cross-purposes,” the minutes said. One member said that “from an economic perspective, the Fed’s purchase of longer-dated coupons via increasing reserves was economically equivalent to Treasury reducing longer-dated coupons and issuing more bills.”

In a presentation to the Treasury, one of the committee members said that Fed easing “would force Treasury yields lower and would likely lead the curve to flatten in the five- to 10- year sector” over the next one to two years. The presenter said 30-year interest rates would likely command a higher risk premium because of concerns about inflation and the value of the U.S. dollar. …”

http://www.bloomberg.com/news/2010-11-03/u-s-treasury-to-sell-72-billion-in-long-term-debt-update1-.html

Monetizing Debt

http://research.stlouisfed.org/publications/es/10/ES1014.pdf

The Shell Game – How the Federal Reserve is Monetizing Debt

“…Executive Summary

  • The Federal Reserve and the federal government are attempting to “plug the gap” caused by a slowdown of private credit/debt creation.
  • Non-US demand for the dollar must remain high, or the dollar will fall.
  • Demand for US assets is in negative territory for 2009
  • The TIC report and Federal Reserve Custody Account are reviewed and compared
  • The Federal Reserve has effectively been monetizing US government debt by cleverly enabling foreign central banks to swap their Agency debt for Treasury debt.
  • The shell game that the Fed is currently playing obscures the fact that money is being printed out of thin air and used to buy US government debt.

The Federal Reserve is monetizing US Treasury debt and is doing so openly, both through its $300 billion commitment to buy Treasuries and by engaging in a sleight of hand maneuver that would make a street hustler from Brooklyn blush. …”

http://www.chrismartenson.com/blog/shell-game-how-federal-reserve-monetizing-debt/25806

Bernanke on Deflation Risk Part one

Bernanke on Deflation Risk Part Two

Ron Paul advisor Peter Schiff’s economic forecast

Bernanke in Denial 2005-2007

The Federal Reserve is going bankrupt

Roger E. A. Farmer: Quantitative Easing

Quantitative Easing Bernanke — History & Objectives of QE

Marvin Barth Says QE2 Won’t Fix `Underlying Problems’

Fall of the Republic HQ full length version

 

Related Posts On Pronk Palisades

The Obama Depression Deepens–Federal Reserve Executes–QE II Plan–”Operation Pawnshop”–$2,500 Billion In Quantitative Easing–Money Printing–Will It Be Enough?

The Ruling Establishment’s Robbery Of The American People–Deflation–Inflation–Hyperinflation–Bust–Bailout–Boom–Bubble–The Fall Of The American Republic–The Rise of One World Government and Currency–Videos

The American People Paid Off The Bets (Credit Default Swaps) Of Wall Street Investment Banks–Videos

The Massive Fraud In Mortgages Continues–Crooks and Corrupt Politicians In Charge–Videos

Quantitative Easing–Videos

Deflation, Inflation and Uncertainty–Videos

The Trillion Dollar Bet–Videos

 

 


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