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The PhD's at the Federal reserve, the same ones who have gotten every major economic and financial prognostication wrong, think that printing more money, i.e.,

by jstalin 14y ago

The PhD's at the Federal reserve, the same ones who have gotten every major economic and financial prognostication wrong, think that printing more money, i.e., debasing the currency, is going to create jobs. Since the Federal Reserve now is the largest single owner of US government bonds[1] and since it has come close to purchasing all available bonds at the long end of the spectrum[2], it is doing the last thing it can think of: an open-ended, unlimited purchase of Mortgage-Backed Securities. This is the terminal end-game of central banking. This won't end well. [1] See http://cnsnews.com/news/article/fed-now-largest-owner-us-gov-t-debt-surpassing-china http://cnsnews.com/news/article/fed-now-largest-owner-us-gov... (2011), updated data here http://www.federalreserve.gov/monetarypolicy/files/quarterly-report-20120630.pdf http://www.federalreserve.gov/monetarypolicy/files/quarterly... and here http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt http://www.treasury.gov/resource-center/data-chart-center/ti.... [2] http://www.zerohedge.com/news/scary-math-behind-mechanics-qe3-and-why-bernankes-hands-may-be-tied http://www.zerohedge.com/news/scary-math-behind-mechanics-qe...

nirvana 14y ago
Printing unlimited money has a political advantage as well-- not only does the Fed profit from it, but the government, and more specifically, politicians profit from it. A good example is Obama's "stimulus" which was a big old pork package, underwritten by the Fed that he got to pretend was "taking action" to "improve the economy" / "create jobs". It was a complete failure by even its own promises, but that has not hurt Obama's re-election chances, because people don't hold politicians accountable for damaging the economy. And this goes for Bush, Clinton, Bush 1 and Reagan -- all of whom took at least some actions that damaged the economy.

by jstalin 14y ago

nirvana 14y ago

Printing unlimited money has a political advantage as well-- not only does the Fed profit from it, but the government, and more specifically, politicians profit from it. A good example is Obama's "stimulus" which was a big old pork package, underwritten by the Fed that he got to pretend was "taking action" to "improve the economy" / "create jobs". It was a complete failure by even its own promises, but that has not hurt Obama's re-election chances, because people don't hold politicians accountable for damaging the economy. And this goes for Bush, Clinton, Bush 1 and Reagan -- all of whom took at least some actions that damaged the economy.