Fed: Quantitative easing now, quantitative easing tomorrow, quantitative easing forever
The Federal Reserve’s Open Market Committee today said it will keep trying to print money until the economy recovers. In short, the Fed said it will increase its purchases of mortgage-backed securities by $40 billion a month until employment improves. So, indefinitely. Combined with other maneuvers, the Fed said its asset holdings will increase by about $85 billion a month through the end of this year. And the money-printing may not end there; from the Fed’s statement:
The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases. (emphasis added)
This is not what people mean when they talk about “wealth creation.” In fact, it’s very nearly the opposite of that: The inevitable devaluing of the dollar — the prices of gold, silver and several other commodities spiked in the minutes following the Fed’s 12:30 announcement — means our savings will lose value. This is the destruction of future wealth in the hopes of creating some current economic growth. In that respect, it is no different from increasing the budget deficit even further to fund even more Keynesian spending.
Will it work? Ask Japan; they’ve been trying such “quantitative easing” since 2001, without much positive effect. This is our third round of it in the past four years.
The Fed already had said it would keep short-term interest rates at or near zero until 2014. Today, it said that policy was likely to remain in place until mid-2015, which is three years from now and six years after the nominal end of the Great Recession. The new bond-buying comes on top of that.
Folks, this is what pushing the panic button looks like. It’s unclear what, if anything, comes between the panic button and the white flag.
– By Kyle Wingfield
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402 comments Add your comment
Michael H. Smith
September 13th, 2012
4:44 pm
Yeah let’s not let the facts get in the way. It really wasn’t all Bush’s fault that decades of bad policy especially some of the worst pursued under the Clinton administration like liar loans and deregulation of derivatives by the committee to save the world(Greenspan, Ruben and Summers) was a bubble predicated on a lie, so obumer had to solo on the recovery.
http://www.pbs.org/wgbh/pages/frontline/money-power-wall-street/
Remedial leaning for liberals who hung around after class: All four episodes including the all links.
Good evening to all.
They BOTH suck
September 13th, 2012
4:46 pm
Rafe
And let’s say he agrees, until you have substantiation that he made the Fed do this, you have your conspiracies (which are many) and not much else.
To your point he has been silent or will say great, but you know as well as I know that no President is going to denounce it in public.
JamVet
September 13th, 2012
4:46 pm
So we’re done covering up for Romney’s disgusting lie about the Libyan embassy murders for now?
OK, got it…
…the Great Recession.
Or another appropriate name for it, the attempted corporate destruction of capitalism.
In September 2008, I predicted that it would take a minimum of ten years to undo the damage from that economic apocalypse. And later wrote that perhaps that was even too optimistic.
After all, what has changed in the equation between Wall Street and Washington?
From what I can tell, next to nothing.
The War on the Middle Class rages on, but with these men at the helm, we have no real chance of ever winning it…
md
September 13th, 2012
4:47 pm
“If the Bush tax cuts did what they claimed they were supposed to do the U.S. would have the best economy in the world right now. ”
OR, they kept us out of depression……it’s all a matter of perspective. Take all that money out of the pockets of the consumers and then where do we stand??
markie mark
September 13th, 2012
4:48 pm
you know why I like reading this blog and not Bookman’s? cause we actually debate on this blog instead of getting a liberal mass attack at every comment…..
They BOTH suck
September 13th, 2012
4:48 pm
MHS
Did anyone say today that it was Bush’s fault or did you just need a bogey man to attack and make yourself feel better?
md
September 13th, 2012
4:49 pm
And as far as the tax cuts are concerned, they are nothing more than political theater……neither party advocates for rolling them all back and what would be gained from the increase on the rich is negligible at best…….it’s merely a voting mechanism to rile the masses.
cc
September 13th, 2012
4:51 pm
MarkV @ 4:14 pm:
Hussein has told the Russians that he “will have more latitude after the election”, and I still wonder what kind of deal he is offering them?
Buzzy
September 13th, 2012
4:56 pm
The Republicans in Congress have done everything they can to block Obama’s programs Linda. I’m sure you know that. They want him to fail even if it hurts the country.
look at youtube - song of mitt's self
September 13th, 2012
4:56 pm
Kyle, if what the Fed did displeased you, are you going to give back your stock market gains resulting from this action. That seems like the principled thing to do.
ByteMe
September 13th, 2012
4:59 pm
For those who aren’t clear on how the Fed operates: it’s not just Bernanke making the decision on his own. The Board of (Fed) Governors makes the decision and Bernanke then gets to be the public face of it. It’s not one man doing all this on his own.
That is all.
md
September 13th, 2012
5:01 pm
“The Republicans in Congress have done everything they can to block Obama’s programs Linda”
Again, a matter of perspective. The house has passed numerous bills that go to the Senate to die……so there are 2 sides to the story. Obama has allowed politics to sway him a bit too much as evidenced by Woodward in the deficit deal…….an agreement was reached and then he goes back and asks for more due to political expediency? That’s like a used car salesman agreeing to a price and then charging you $500 to drive it off the lot.
cc
September 13th, 2012
5:03 pm
Buzzy @ 4:56 pm:
“The Republicans in Congress have done everything they can to block Obama’s programs Linda. I’m sure you know that. They want him to fail even if it hurts the country.”
You make the assumption that Hussein has offered a program worthy of passage, and not just a rehashed failed attempt. You are also making the assumption that he has offered anything that would HELP the country. That, my friend, is a whole lot of “assuming” . . .
Rafe Hollister, suffering through Oblamer's ineptocracy
September 13th, 2012
5:05 pm
http://www.washingtonpost.com/business/economy/ending-bush-tax-cuts-for-rich-would-save-just-28-billion-in-2013-analysts-say/2012/07/19/gJQAW0m0vW_story.html
All told, the Republican measure would add $300 billion to next year’s budget deficit, the JCT said.
A competing Democratic proposal to extend the Bush tax cuts only on income under $250,000 would increase the deficit by about $223 billion next year. Democrats would devote an additional $27 billion to extending a variety of other middle-class tax cuts, including a credit for college tuition and an expanded credit for the working poor, bringing the total cost of the measure to about $250 billion.
250M/300MX100= 83.3%….. dang I said 85%, guess I was wrong!
MarkV
September 13th, 2012
5:08 pm
cc @ 4:51 pm
“Hussein has told the Russians that he “will have more latitude after the election”, and I still wonder what kind of deal he is offering them?”
Yeh, why don’t you tell us, since you apparently have sources deep in the White House?
Linda
September 13th, 2012
5:09 pm
Buzzy@4:26, If I had not read up on foreign aid, why do I know all those statistics?
If you gave your paycheck to the poor & needy rather than paying your mortgage or rent & putting food on the table for you family, would that make you a humanitarian?
If you sold everything you owned & sent a check for the lump sum to Oprah Winfrey or Eli Manning, would that be money “well spent?”
Buzzy@4:32, Short order? It’s been 3 years since the last earthquake. What the US needs are diplomats like my parents were. They meant business & what we need in the White House is a businessman.
Rafe Hollister, suffering through Oblamer's ineptocracy
September 13th, 2012
5:13 pm
$28 billion saved by repealing the Bush tax cuts on the wealthy, where do we spend all that money? Maybe one of Obama’s campaign contributors needs a low for a green energy project.
TBS, sorry I didn’t add that this is just my opinion and I have no substantiation. I tried to get into the meetings Bernanke has had with Obama, but they would not let me in. I can’t even get a copy of the minutes or notes. I figured most folks would know that I did not have any inside info, but there is always one like you.
Lil' Barry Bailout - Vote American
September 13th, 2012
5:14 pm
Remember when the economy was based on reality, rather than play money?
Soooo four years ago.
Rafe Hollister, suffering through Oblamer's ineptocracy
September 13th, 2012
5:14 pm
loan not low
Jefferson
September 13th, 2012
5:14 pm
The last thing the White House needs is Romney. The GOP again should quit with the BS and get a real person instead of a wax museum poser.
independent thinker
September 13th, 2012
5:15 pm
Kyle- The problem is very real of a total devaluation of the dollar as a reserve currency for the world.States are now passing laws allowing gold to be used as currency. So when your man Mitt goes and starts a war with China or Russia what happens to the dollar and all those phony t-bills? Won’t that trigger the downfall and collapse of the dollar as the safest currency in the world? Of course starting a global war as Mitt advocates in his book along with his mentor, John Bolton will lead to full employment and the recession will be over.
Stephenson Billings
September 13th, 2012
5:17 pm
Yes, it was all about that movie:
“The attack that killed four Americans in Libya, including the U.S. ambassador, was an organized two-part operation by heavily armed militants that included a precisely timed raid on a supposedly secret safe house just as Libyan and U.S. security forces were arriving to rescue evacuated consulate staff, a senior Libyan security official said on Thursday.
Wanis el-Sharef, eastern Libya’s deputy interior minister, said the attacks Tuesday night were suspected to have been timed to mark the 9/11 anniversary and that the militants used civilians protesting an anti-Islam film as cover for their action. Infiltrators within the security forces may have tipped off militants to the safe house location, he said.”
http://www.ajc.com/ap/ap/crime/libyan-attacks-said-to-be-2-part-militant-assault/nR9kG/
md
September 13th, 2012
5:17 pm
Update from across the pond……seems Egypt is talking out both sides of it’s mouth:
“The Muslim Brotherhood’s English-language Twitter account (@Ikhwanweb) retweeted a message from deputy head Khairat el-Shater saying he was “relieved none of @USEmbassyCairo staff was harmed” and hoped U.S.-Egypt relations “will sustain [the] turbulence of Tuesday’s events.”
However, according to ahramonline.com, the Brotherhood’s Arabic-language Twitter account and its website were praising the protests staged against a U.S.-made film that some Muslims deem insulting to the Prophet Muhammad. The Brotherhood’s messages also called for a million-man march on Friday.”
They BOTH suck
September 13th, 2012
5:19 pm
Rafe
One like me that will call out your usual bs.
Yes, you can count on it
Now carry on with your conspiracies………
And as I noted earlier to Kyle, he could be correct and this FED action does little to nothing. Heck it might even exasperate some problems
Stephenson Billings
September 13th, 2012
5:21 pm
Good news for high school or high school drop out job seekers (not):
Franchisors warn Obamacare will halve profits
“The International Franchise Association held a convention in Washington this week where most of the Radio Shack, Dunkin Donuts, Curves and other franchisers were grumbling about new federal regulations, especially the impact of Obamacare.
With simple math the small business folks understood, he spelled out that their only choice is to slash employee hours so they aren’t eligible for company-paid health care or stop offering insurance and pay the $2,000 per employee fine.”
http://washingtonexaminer.com/franchisors-warn-obamacare-will-halve-profits/article/2507920#.UFJNu7IiaSo
Del
September 13th, 2012
5:21 pm
Here is but another example of foreign policy incompetency. The White House, the State Department and Democrats in congress can’t get on the same page in public about Egypt.
http://www.foxnews.com/politics/2012/09/13/state-department-corrects-obama-says-egypt-is-ally/
Lil' Barry Bailout - Vote American
September 13th, 2012
5:28 pm
If Obozo’s economic policies were working, there would be no need to airdrop $40 billion per month to improve the jobs picture.
It is time for change.
It is time to Vote American.
md
September 13th, 2012
5:30 pm
” So when your man Mitt goes and starts a war with China or Russia what happens to the dollar and all those phony t-bills?”
May be a matter of when vs if. China and Russia have been calling for another reserve currency for awhile now, and China has been buying tons of gold in an effort to push their own currency as a reserve currency. You can bet your sweet bippy that China will push even harder now that Bernanke has devalued their holdings………..
http://www.aljazeera.com/indepth/features/2011/09/201199175046520396.html
Stephenson Billings
September 13th, 2012
5:40 pm
Why is this not surprising?
Obama Invites Egypt’s Muslim Brotherhood President to Meet Next Week – Refuses to Meet Netanyahu
http://thehill.com/blogs/global-affairs/middle-east-north-africa/236649-report-obama-invites-new-egyptian-president-morsi-to-visit-us
Linda
September 13th, 2012
5:43 pm
Buzzy@4:35, We’ve already spent trillions of dollars in “big fiscal stimulus programs,” one of which was the single largest spending bill in the history of the world. Why don’t we try something different? Oh, I know! Why don’t we take Bernake’s new stash, hire a bunch of private pilots to fly around the country & just throw money out the windows?
Buzzy@4:41, Democrats have selective memory. The Bush tax cuts did exactly what they were intended to do. The unemployment rate fell under Bush & was 4.6% average during both ‘06 & ‘07, more than half the rate it went to under Obama in Oct., ‘09 @ over 10%. The Bush tax cuts cost the US nothing! It’s Obama’s policies that are preventing companies from hiring, the unemployment rate high & therefore the tax revenues from coming in.
Lil' Barry Bailout - Vote American
September 13th, 2012
5:44 pm
Obozo has Israel’s back, but why is there a knife stuck in it?
Obozo: Returning to his Muslim roots.
They BOTH suck
September 13th, 2012
5:47 pm
Linda
Actually the housing bubble played a significant part in the economy of which you speak, no much unlike the Clinton years with a higher tax rate but fueled to an extent by the dot.com bubble
They BOTH suck
September 13th, 2012
5:47 pm
not much
excuse me
Lil' Barry Bailout - Vote American
September 13th, 2012
5:47 pm
Linda, most libtards have a protective armor which prevents them from acknowledging, much less understanding, the facts about how our economy performed after Our President Bush’s tax cuts were implemented. Tax revenues went up, unemployment went down, and economic growth picked up. All of these are easily retrieved numbers. Libtards are in denial–it’s called cognitive dissonance. They’ve been telling each other stories for so long that they’ve lost touch with reality.
They BOTH suck
September 13th, 2012
5:50 pm
Barry
Did tax revenue go down when they were raised in the 90s?
Lil' Barry Bailout - Vote American
September 13th, 2012
5:52 pm
Who’s talking about the 90s? Please pay attention.
md
September 13th, 2012
5:52 pm
And it’s now official, NY has banned the Big Gulp…….could the Twinkie be far behind? The gov’t has officially taken on the duty of nanny and knows better than to let individuals make their own choices.
Hang on folks it can only get worse……….
They BOTH suck
September 13th, 2012
5:53 pm
Barry
I’m not sure what the answer is, but did those revenues go up higher in proportion to what the historical measures are against GDP?
They BOTH suck
September 13th, 2012
5:54 pm
Barry
If you are unable to view more than one thing at a time to enable you to see things outside of a vacuum and a set narrative, just say so.
It is ok, man. You will be ok.
Lil' Barry Bailout - Vote American
September 13th, 2012
5:55 pm
If tax increases are what we need, as Obozo claimed during the 2008 campaign, why didn’t he raise them? He said at the time that he wouldn’t even wait until Our President Bush’s tax cuts expired–he was going to end them early. He had the votes to do it. What happened?
They BOTH suck
September 13th, 2012
5:55 pm
Barry
Typical and shows you know the answer but are unwilling to have honest debate.
But as usual if it made you feel better about yourself, rock on man, rock on
Lil' Barry Bailout - Vote American
September 13th, 2012
5:56 pm
Check the google, TBS. I do it all the time. It isn’t difficult.
They BOTH suck
September 13th, 2012
5:57 pm
Barry
Like all politicians, Obama will cave. You ever read where I said different.
As Romney flip flopped on his way to the nomination? My point exactly.
They BOTH suck
September 13th, 2012
5:58 pm
Barry
I know the answer. Do not be scared to see if for yourself
Just seeing if you would deflect, ignore or post more bs
JDW
September 13th, 2012
5:58 pm
@MD…”Take all that money out of the pockets of the consumers and then where do we stand??”
Maybe with fewer bad housing loans, less of a bubble, more shallow recession, lower debt and deficit.
Edward
September 13th, 2012
5:59 pm
As usual, the loudest voices are the most ignorant. Here’s the basics, but if you don’t get it already chances are you never will. The two party system is a scam, designed to distract you and conceal that your vote makes no difference. The elite are destroying the system on purpose. It allows them to consolidate their power and buy up assets on the cheap, while simultaneously reducing their obligations to their older workers that are no longer as productive. This strategy has been repeated so many times throughout recent history that it’s amazing that it isn’t obvious to everyone. If you think anything other than what I just wrote, you are missing what should be obvious by now.
Lil' Barry Bailout - Vote American
September 13th, 2012
6:00 pm
I’m more interested in the future than the past, TBS. I will oppose tax increases as a means of fixing Obozo’s deficit problem until spending returns is below 20% of GDP. After he proves he can fix that part of his problem, we can talk about tax increases.
JDW
September 13th, 2012
6:01 pm
“Still not too late to buy gold and silver. Get out of Federal Reserve Notes as quickly as you can. ”
These wingnuts are why there is a gold and silver bubble.
They BOTH suck
September 13th, 2012
6:02 pm
Barry
Nice cop out. You speak of Bush then say you are more interested about the future than the past.
Awesome logic.
Keep it up
Lil' Barry Bailout - Vote American
September 13th, 2012
6:03 pm
MD: Take all that money out of the pockets of the consumers and then where do we stand??
JDW: Maybe with fewer bad housing loans, less of a bubble, more shallow recession, lower debt and deficit.
——————
Pretty much sums up the liberal fascist approach to government: “people are stupid, bureaucrats are smart. Government knows best how to spend your money. Just keep earning it and handing more of it over to us.”
A.K.A. “slavery”