Fed Out Of Money!

[Honzajs119]

The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.


The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.


Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes.

http://ftalphaville.ft.com/blog/2008...-out-of-money/

[*T*]

"The Fed's Run Out of Money" - FT Alphaville

From FT Alphaville:

The Fed's Run Out of Money

Seriously. It’s broke. Here’s the statement from the US Treasury:

The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.

The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.

Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes.'’

Gold up $60, 3m treas .16%...

[sishya]

Re: "The Fed's Run Out of Money" - FT Alphaville

Does this mean printing dollars ? How will foreign Government financiers react to this ?

[Spartacus]

Re: Fed Out Of Money!

HEH ... exactly the point I made many months ago ... Bernanke is doing all he can to inject money, without "injecting money".

Forget "helicopter Ben", it's David Copperfied putting in a stint as FED chief.

http://ftalphaville.ft.com/blog/2008...-out-of-money/

[GRG55]

Re: Fed Out Of Money!

http://ftalphaville.ft.com/blog/2008...-out-of-money/

\

Hey Mish, Ackerman, there's your deflation for ya...:rolleyes:

[bill]

Re: "The Fed's Run Out of Money" - FT Alphaville

Does this mean printing dollars ? How will foreign Government financiers react to this ?

Good question
Bloomberg can tell us tomorrow after meeting Paulson.
http://www.businessweek.com/ap/finan.../D938P3C80.htm

The Associated Press September 17, 2008, 7:20PM ET

New York Mayor Michael Bloomberg warned Wednesday a "next wave" of financial pain may come from overseas if foreign entities stop buying U.S. debt.
The mayor is scheduled to meet Thursday morning with Treasury Secretary Hank Paulson and Securities and Exchange Commission Chairman Chris Cox.
"It's not clear who's going to be buying our debt," said Bloomberg. "It may very well be that the next wave is going to come back and bite us."

[LargoWinch]

Re: Fed Out Of Money!

\

Hey Mish, Ackerman, there's your deflation for ya...:rolleyes:

WTF? they running out of ink and paper?

[D-Mack]

Re: Fed Out Of Money!

The Treasury will have more work to do

Federal bank insurance fund dwindling
Tuesday September 16, 7:49 pm ET
By Marcy Gordon, AP Business Writer

Federal bank insurance fund dwindling, regulators consider options for replenishing it

WASHINGTON (AP) -- Banks are not the only ones struggling in the growing financial crisis. The fund established to insure their deposits is also feeling the pinch, and the taxpayer may be the lender of last resort.

The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

...


http://biz.yahoo.com/ap/080916/bank_...ts_safety.html

[GRG55]

Re: Fed Out Of Money!

WTF? they running out of ink and paper?

Not yet...

Central Banks Offer Extra Funds to Calm Money Markets


Sept. 18 (Bloomberg) -- The Federal Reserve almost quadrupled the amount of dollars central banks can auction around the world to $247 billion in a coordinated bid to ease the worst crisis facing financial markets since the 1920s...

This is the best line from this Bloomberg article. Talk about "truth-in-advertising"... :eek:

"...The Fed, which is adding $50 billion into its own banking system today, will spray dollars around the world via swap lines with other central banks..."

Calling all deflationists...:p

[sn1p3r]

Re: Fed Out Of Money!

I have a serious question regarding this that I would like some iTulip insight on:

What happens when USA, inc. is "bankrupt"? I'm asking in reference to the city of Vallejo going bankrupt and having to stop some public services, etc. Is it similar to the budget crisis where all non-essential employees of gov't are sent home? What services could we expect to be disrupted?

[sishya]

Re: Fed Out Of Money!

Folks,
I am getting a little uneasy today. The cumulative affects of Fed/Treasury action for the past year will have a negative reaction sometime down the road. Something smells fishy.

Take a look at the following video by Karl Denninger. I have never heard of him before. Maybe exaggerated but judge for yourself.

http://www.youtube.com/watch?v=kqtAzRNhTTY

[GRG55]

Re: Fed Out Of Money!

I have a serious question regarding this that I would like some iTulip insight on:

What happens when USA, inc. is "bankrupt"? I'm asking in reference to the city of Vallejo going bankrupt and having to stop some public services, etc. Is it similar to the budget crisis where all non-essential employees of gov't are sent home? What services could we expect to be disrupted?

USA, Inc. cannot, by definition, go bankrupt. The nation that controls the world's reserve currency is nothing like the city of Vallejo.

[jimmygu3]

Re: Fed Out Of Money!

USA, Inc. cannot, by definition, go bankrupt. The nation that controls the world's reserve currency is nothing like the city of Vallejo.

Exactly. Imagine if Vallejo could pay their bills with Vallejo Bucks that they could print at will.

[sn1p3r]

Re: Fed Out Of Money!

I of course understand that concept but what if USA, inc. can no longer pay with USD because they are not accepted (ex. Iran rejecting USD for oil)...what then? we have to convert inflated USD to something else and lose even more purchasing power?

[D-Mack]

Re: Fed Out Of Money!

I of course understand that concept but what if USA, inc. can no longer pay with USD because they are not accepted (ex. Iran rejecting USD for oil)...what then? we have to convert inflated USD to something else and lose even more purchasing power?

Why not start a war and get rid of Russia and/or China ?


Wasn't the US bankrupt when they couldn't pay back with gold ?