If the FED Government shuts down: doesn't the QE stop? Crash?

[sunskyfan]

If they do actually shut the government down. Don't they have to stop this debt monetization? If this goes on for a week or so won't that expose who is really weak and collapse them? Could this be the plan?



http://www.reuters.com/article/2011/...11239920110405

[don]

Re: If the FED Government shuts down: doesn't the QE stop? Crash?

Sacred trusts will remain unaffected. Example: military spending has already been firewalled off until 2012. Can QE2 be far behind

[GRG55]

Re: If the FED Government shuts down: doesn't the QE stop? Crash?

If they do actually shut the government down. Don't they have to stop this debt monetization? If this goes on for a week or so won't that expose who is really weak and collapse them? Could this be the plan?



http://www.reuters.com/article/2011/...11239920110405

The Federal Reserve Board is technically not part of the Federal Government. If it is not able to buy newly issued Treasuries the Fed has demonstrated ample creativity purchasing all manner of other types of assets...so I wouldn't see any reason the Fed would have to ease the pace of the current QE program, which is due to end in June, regardless what is happening in the kindergarten on the Hill.

[Adeptus]

Re: If the FED Government shuts down: doesn't the QE stop? Crash?

Clearly you haven't watched enough Fed-hate videos. First thing you learn is "There's nothing Federal about the Federal Reserve. They're about as Federal as Federal Express" ;-)

[charliebrown]

Re: If the FED Government shuts down: doesn't the QE stop? Crash?

QE will continue but what about interest payments on outstanding treasuries, and how does deficit spending occur?
I heard on the radio recently that the treasury has roughly 50B of deposits in commercial banks. That is roughly two weeks of deficit spending at current rates. If the gvt is shut down for that long, is that the train wreck? or can the treasury open up a credit line with the commercial banks? Is that considered in the debt ceiling if they are not adding additional treasury debt?

[blazespinnaker]

Re: If the FED Government shuts down: doesn't the QE stop? Crash?

Seems to me if the government shuts down, QE will have to ramp up to buy all that debt that people aren't getting paid for.