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
Lil' Barry Bailout - Vote American
September 13th, 2012
9:10 pm
Some folks just don’t know how to deal with strong women, Linda.
Lil' Barry Bailout - Vote American
September 13th, 2012
9:15 pm
From my link above:
“However, with the Democrats in control, the emergency designation is now being abusively applied to domestic spending. Congressional Research Service data obtained by the office of Senator Tom Coburn (R-Okla.) finds that emergency spending has increased deficits by almost $1 trillion since the 111th Congress was seated in January 2009.
The biggest chunk came with passage of the $862 billion “emergency” stimulus bill in February 2009. The Obama administration insisted that the emergency spending legislation was necessary to jump-start the economy and keep unemployment below 8 percent. Oops.”
getalife
September 13th, 2012
9:16 pm
Ben said he will keep doing it until it works or until the gop stop the obstruction on the job’s bill.
Your move gop.
Just Saying..
September 13th, 2012
9:19 pm
“And just for the record, I don’t think this “emergency” spending should be allowed to be kept off budget, and for that matter I believe the government should use the same accrual accounting that eeeeevil corporations use.”
Lil Barry: Here here! Total 1000% agreement.
Lil' Barry Bailout - Vote American
September 13th, 2012
9:21 pm
“Obama’s Jobs Bill Fails to Advance in Senate Despite White House Push”
—————
That would be the Democrat Senate.
Lil' Barry Bailout - Vote American
September 13th, 2012
9:24 pm
Looks like Obozo’s “jobs” bill was just a smaller version of the first one that faceplanted so miserably. In short, a non-starter, even for Democrats.
JamVet
September 13th, 2012
9:24 pm
Did led really write that trickle down economics works!
Of course it does!
Just not for the bottom 80% of American wage earners.
But hey, let’s give it another thirty years and see if that changes, huh?
http://i.imgur.com/34is7.jpg
Just Saying..
September 13th, 2012
9:31 pm
“Maybe you don’t realize…” Yada yada.
Linda: Maybe you don’t realize that Georgia will be a Romney win in Nov. Perhaps your sacrificial efforts might be more productively focused on those states in jeopardy of going over to the Dark Side…
Bill
September 13th, 2012
9:32 pm
Kyle, I am so glad that you are an expert at economics as well as partisan politics!! i do believe you will have a job at the AJC for a very long time!!
Regards,
Just Saying..
September 13th, 2012
9:35 pm
“Some folks just don’t know how to deal with strong women, Linda.”
Lil Barry: I know Linda appreciates that. Confession is good for the soul.
Just Saying..
September 13th, 2012
9:39 pm
“Kyle, I am so glad that you are an expert at economics…”
Bill: Did you miss Kyle’s adoration of Paul ——-ing Krugman?
Quantavious
September 13th, 2012
9:41 pm
Common sense tells you there has to be day of reckoning somewhere down the road after injecting all this easy money into our economy.
Anyone who remembers the hyperinflation of the early 1980s remembers the painful steps the Fed had to take to stanch it. It’ll be much, much worse this time.
Linda
September 13th, 2012
9:42 pm
Just@9:31, What you & the foul-mouthed liberals (not you) don’t understand is that Kyle’s blog is viewed all over the US & all over the world, in every country.
Yes, I have been blogging on other websites during these 7 months & long before that. Hope I have made a difference.
Rafe Hollister, suffering through Oblamer's ineptocracy
September 13th, 2012
9:44 pm
http://www.independent.co.uk/news/world/politics/revealed-inside-story-of-us-envoys-assassination-8135797.html
Seems the US knew 48 hours prior to the Egypt and Libyan Embassy attacks that something was brewing ( retaliation for drone strike) not related to a movie, but we did zilch, nada, to protect our diplomats. Where are the truthers?
A very interesting article laying out what happened. And just two days ago Obama was poking fun at Romney and Ryan for being “new” to foreign policy.
Linda
September 13th, 2012
9:46 pm
Just@9:35, Don’t mess with me.I can take you down about 50 decrees.
Just Saying..
September 13th, 2012
9:50 pm
“Kyle’s blog is viewed all over the US & all over the world…”
Uh, yes, that would be true. But as an economist, I’m sure you’d agree that number of viewers is important. My guess, likely many more in Georgia than outside.
“Hope I have made a difference”
No question about that…
Hillbilly D
September 13th, 2012
9:56 pm
From Rafe’s link:
There was, according to witnesses, little defence put up by the 30 or more local guards meant to protect the staff.
Should we ever leave defense of our people up to local guards, especially in volatile areas of the world? I’d say no.
EJ Moosa
September 13th, 2012
10:01 pm
It’s funny that folks think their portfolio is soaring because the market is strong. The last time the market set record highs we were weeks from the start of the recession.
And if your dollars are worth less, don’t you think it’s a rational response that the shares would cost more?
The best thing will be paying phantom capital gains on those assets, even though you cannot buy any more real stuff with them than you did before their rise.
Rafe Hollister, suffering through Oblamer's ineptocracy
September 13th, 2012
10:06 pm
Hillbilly
Agree with your post about contracting out security. Rumsfeld and Cheney were the parents of that nonsense. I worked in DOD at the time and they wanted to contract out everything that did not involve firing a weapon or flying a plane. What they failed to realize was they spent all this money training these people, who were all gung ho to take the money and training, but when the bullets started flying around the kitchen, the contracted kitchen staff walked out. Can’t blame them, the money was good, but not that good. Reality met theory and reality always wins.
BTW, the USMC guards at the Egyptian embassy were not allowed to use live ammo in their weapons. Typical PC crappola that gets folks killed.
Harold
September 13th, 2012
10:09 pm
Sometimes you can’t rely on logic which leads you to think you can be right 100% of the time. You may be a little right, a little wrong. If you don’t think you can be a little wrong, you might have ego problems.
Linda
September 13th, 2012
10:11 pm
Just@9:50, The number of viewers of Kyle’s blog is not as important as the number of viewers who are registered voters who are likely to vote in Nov. That’s what the polls are all about, as well as the trends.
What you & the liberals don’t understand are that pollees won’t give accurate information in 2012 to pollsters who call anonymously. Would a conservative tell an anonymous pollster that they plan to vote against Obama? If the Obama adm. is suing a pollster, Gallup, why would a pollee divulge his or her plans to vote against Obama? Are pollees stupid? Do we want to be audited? No, let’s keep our intentions private.
Rafe Hollister, suffering through Oblamer's ineptocracy
September 13th, 2012
10:12 pm
The best thing will be paying phantom capital gains on those assets, even though you cannot buy any more real stuff with them than you did before their rise.
EJ great point, another reason Obama has got to love this easing. More phantom revenue to pay down an inflationary reduced deficit. Passing the pain onto the people paying the bills, to insure that the entitlement programs have the money to operate at the levels the parasites have become accustomed to.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
September 13th, 2012
10:12 pm
They tried to Occupy Wall Street and were humiliated. And then they Blubbered About Wall Street. This led to Smearing Their Feces On The Buildings Of Wall Street.
Now they try to Fatten Up Wall Street. And Jump Up And Down With Wall Street, Lighting Those Cigars With Your Money.
Does it get anymore insane than this?
I hope not.
Hillbilly D
September 13th, 2012
10:12 pm
Rafe
I’m no expert but contracting out (farming out would be a better term I think) anything to do with security and the military is just plain idiotic to me.
As for not using live ammo, I’m just an old country boy but I’d rather have a stick with a knot in the end of it than a gun that ain’t loaded. All an unloaded gun will do is piss somebody off and get you killed.
getalife
September 13th, 2012
10:21 pm
Psst, the drudgey latest lie “According to senior diplomatic sources” means bs.
The gop intell committee said there was no warning.
Which one is lying ?
getalife
September 13th, 2012
10:23 pm
Perhaps the gop will stop the obstruction.
Ben is trying.
cc
September 13th, 2012
10:24 pm
Linda @ 10:11 pm:
I was polled no less than five times prior to the 2008 election. I consistently gave exactly opposite answers to my intentions. Again in 2010, I was polled several times and continued giving erroneous information. I certainly do not think that I was the only person doing so.
getalife
September 13th, 2012
10:24 pm
Linda,
I’ll be your huckleberry.
getalife
September 13th, 2012
10:26 pm
Did you see the gop unite with our President?
That made me smile
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
September 13th, 2012
10:26 pm
Trying what? Trying to understand the Psychodrama? We Love Wall Street, We Love Wall Street Not?
babble, babble, babble.
Tiberius - pulling the tail of the left AND right when needed
September 13th, 2012
10:27 pm
The theory is that someone is seriously PO’d in the diplomatic corps for losing one of their own, that they’re ratting out the administration on this 48 hours thing.
getalife
September 13th, 2012
10:27 pm
Most people will not answer the phone when they see it on caller id.
getalife
September 13th, 2012
10:28 pm
“According to senior diplomatic sources” means it is a lie.
getalife
September 13th, 2012
10:30 pm
“Trying what? Trying to understand the Psychodrama? We Love Wall Street, We Love Wall Street Not?
babble, babble, babble.”
The unlimited bribes might have something to do with it.
Thank your cons on the sc.
JamVet
September 13th, 2012
10:37 pm
Trying to understand
Good luck. Not much is gonna penetrate that…
http://tinyurl.com/l6ovr
Hillbilly D
September 13th, 2012
10:37 pm
I’ve never had a pollster call my house (or a politician either) believe it or not. It amazes me that anybody would answer the phone if they knew it was a pollster, or wouldn’t hang up on them as soon as they found out.
Tiberius - pulling the tail of the left AND right when needed
September 13th, 2012
10:38 pm
“According to senior diplomatic sources” means it is a lie.”
And you know this to be true – how?
(Not expecting any intelligent answer, btw)
md
September 13th, 2012
10:41 pm
More than you’ll get from any US media outlet:
http://www.dailymail.co.uk/news/article-2202979/Benghazi-attack.html
Linda
September 13th, 2012
10:42 pm
cc@10:24, Why would a conservative admit he or she was not voting for the Godfather? We don’t want to be audited.
Just Saying..
September 13th, 2012
10:43 pm
“Just@9:35, Don’t mess with me.”
Linda: Not even in my 12th month in Nam…
Just Saying..
September 13th, 2012
10:51 pm
“…plebiscite…” “…irk…” “…50 decrees…” “… pollee…”
Linda: You are rolling tonight…
Just Saying..
September 13th, 2012
10:54 pm
“We don’t want to be audited.”
Nixon resigned.
md
September 13th, 2012
10:55 pm
The risk is always there, just ask Dan:
“But by the time the company went public in November 2011, Marino increased his share total to 1,576,525. Assuming Marino still owned that much when the company hit its peak of $9.20 per share in April, his stake would have been $14.5 million.
Since April, the shares have taken a colossal dive and are now only worth around 55 cents each, leaving Marino with just $867,000 in stock.”
md
September 13th, 2012
10:57 pm
And the company in question belonged to Hollywood wonderboy James Cameron…….no such thing as a sure thing folks.
JamVet
September 13th, 2012
11:26 pm
The often sensationalistic Daily Mail??
Not the BBC?
Not Reuters?
Not one other single credible American or international news wire or news service has this “information”?
Color me exceptionally dubious…
Tiberius - pulling the tail of the left AND right when needed
September 13th, 2012
11:36 pm
Not that we’d expect you to do any fact-checking on your own, AmVet, but IF you had READ the story in the link, you would have seen this: “The Independent, citing diplomatic sources, has exclusively reported that the U.S. State Department had known up to 48 hours ahead of the attacks that the compounds in Benghazi and Cairo were potential targets. However, none of the diplomats in either city were given warning to go on lock-down, the paper reported.
THAT story would have linked you to this: http://www.independent.co.uk/news/world/politics/revealed-inside-story-of-us-envoys-assassination-8135797.html
Try to keep your America-hating diatribes to a minimum until you have educated yourself, will you?
Suthrn1
September 13th, 2012
11:54 pm
In response to Johnny Reb….You miss-quoted….It is NOT illegal to print paper in this country, it is Illegal to Counterfeit. Just look at the Berkshare in Mass or the Ithaca Hours, Etc….They are Local Currencies that are being used in communities across our nation. see here
http://www.huffingtonpost.com/2009/04/06/communities-print-own-cur_n_183497.html
JamVet
September 13th, 2012
11:55 pm
Tibs, America-hating? Me?
You’ve lost it.
I saw that reference to the Independent in that article.
Still dubious.
But regardless, you are fanatically obsessed with me.
Yo wit, your very last post of the day is in the exact same vein as your very first. Your completely preoccupation is not healthy.
I have no idea how much room there is inside your head, but I am sure am in there. Morning, noon and night.
Get help. Or take a vacation. You are embarrassing yourself with these juvenile outbursts.
Seriously.
Tiberius - pulling the tail of the left AND right when needed
September 14th, 2012
12:01 am
Obsessed? Hardly.
Determined to expose you for the fraud that you are? Absolutely!
What caused you to hate the country of your birth so much?
td
September 14th, 2012
12:10 am
Tiberius – pulling the tail of the left AND right when needed
September 14th, 2012
12:01 am
Obsessed? Hardly.
Determined to expose you for the fraud that you are? Absolutely!
Absolutely keep up the good work.