Fed starts printing press: $1T+ in additional purchases

[c1ue]

the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.

Anyone still think we're getting out of this?

[hayekvindicated]

Re: Fed starts printing press: $1T+ in additional purchases

Looks highly deflationary to me. ;)

[LargoWinch]

Re: Fed starts printing press: $1T+ in additional purchases

I have rarely seen anything like this: Follow the green Rainbow to the top!

[Southernguy]

Re: Fed starts printing press: $1T+ in additional purchases

ITULIP: Congratulations..... disinflation and then inflation, lots of inflation....hyperinflation? highly probable now.
Dollar´s condition of reserve currency something of the past.
Gold, who knows.....but to the skies.
Buying more, a lot more tomorrow.

[gwynedd1]

Re: Fed starts printing press: $1T+ in additional purchases

Yes this is finally adding to the money supply.

[cobben]

Re: Fed starts printing press: $1T+ in additional purchases

gold was flat today in EUR, down - 1% in SEK.

not to rain on anyone's parade . . . .

[ricket]

Re: Fed starts printing press: $1T+ in additional purchases

gold was flat today in EUR, down - 1% in SEK.

not to rain on anyone's parade . . . .

Considering that the devaluation is for the US dollar, I don't know how that would affect the gold/EUR price?

Money is a unit of exchange. Unless the BOE announced a similar monetization plan, what does the EUR have anything to do with the US announcing major currency printing operations?

[Slimprofits]

Re: Fed starts printing press: $1T+ in additional purchases

http://www.nytimes.com/2009/03/19/business/19japan.html

The Bank of Japan said at the end of its two-day policy meeting that it would increase its monthly purchase of government debt from banks to 1.8 trillion yen or $18.3 billion from 1.4 trillion yen. The bank’s board also voted unanimously to hold its benchmark interest rate steady at 0.1 percent.

On Tuesday, the Bank of Japan said it was considering offering up to 1 trillion yen in loans to banks to shore up their depleted capital. It has also started buying commercial paper, corporate bonds and stocks from financial institutions.

http://www.bloomberg.com/apps/news?p...V0M&refer=home

Bank of England policy makers voted unanimously to start printing as much as 75 billion pounds ($105 billion) in money to fight the recession as they made their final cut in the benchmark interest rate.

The central bank plans to spend most of the first sum of 75 billion pounds on gilts.

http://www.reuters.com/article/marke...94282820090312

The Swiss franc saw its biggest ever one-day drop against the euro on Thursday after the Swiss National Bank sold francs as part of a drive to help the economy, which also included an interest rate cut and planned bond buying.

The SNB's intervention stunned global foreign exchange markets

"The SNB (is) the first central bank in the developed world to now incorporate FX intervention as an integral part of monetary policy," said Julien Manceaux, economist at ING.

*****

Are these coordinated moves? Is that a nieve question? What Central Bank is next?

[pwcmba]

Re: Fed starts printing press: $1T+ in additional purchases

Time to update the Fed Fail video-

http://www.youtube.com/watch?v=aeb247Vc1eY

[ASH]

Re: Fed starts printing press: $1T+ in additional purchases

Anyone still think we're getting out of this?

Did any regular reader of iTulip think we were getting out of this before the announcement?

BTW: Do you recall when you remarked that maybe I did not 'grok' the situation, and I responded that I was having trouble deciding whether the crisis is now, or a decade from now when the entitlements bill really starts coming due? Well, let's just say that I'm no longer wondering about that.

[goadam1]

Re: Fed starts printing press: $1T+ in additional purchases

Did any regular reader of iTulip think we were getting out of this before the announcement?

BTW: Do you recall when you remarked that maybe I did not 'grok' the situation, and I responded that I was having trouble deciding whether the crisis is now, or a decade from now when the entitlements bill really starts coming due? Well, let's just say that I'm no longer wondering about that.

Are you sure that your sense of crisis is from your own thinking?

Here is a review of Naomi Klein's "Shock Doctrine." Looks like good reading.


It Takes a Crisis

Eric Klinenberg, Book Forum, September/October/November 2007

Why do so many nations have economic policies more laissezfaire and social programs less generous than their citizens prefer? In her explosive counterhistory of global capitalism, against the glib accounts offered by mainstream economists and celebrity journalists, Naomi Klein argues that the answer lies in a simple two-step strategy, honed over three decades by an international cabal of freemarket fundamentalists: First, exploit crises—whether due to economics, politics, or natural disasters––to advance an agenda that would never survive the democratic process during ordinary times. Next, create a “corporatocracy,” in which multinationals and political leaders align to promote their interests at the public’s expense.

more here:

http://www.naomiklein.org/shock-doct...t-takes-crisis

[charliebrown]

Re: Fed starts printing press: $1T+ in additional purchases

You're one of the smarter guys on this site. I really want to know what this means at the j6p level. To me as an engineer and not a macro-economist or uber-wealthy guy. I assume what this means is that uncle ben fired up his P.C. and typed in 3T into the fed balance sheet enty box (electronically printed money), then this new money will be used to buy long treasuries.

Who are the sellers of T's? will this money go after outstanding notes, and bonds? Is the money earmarked for the day when the treasury tries selling new issues? does it matter? So in six months is there now 1T of new dollars out there ready to be spent? Is this how the stimulus plan is funded? Did they say what maturity they are going to target? 10yr 30yr?

Is now the time to buy more gold? at 920? Will we wake up tomorrow and find out who else is going to devalue their currency tomorrow? China?
are we going to see oil start to spike, as people scramble for an inflation hedge? Are the Saudi's going to break their dollar peg?

If the fed now owns long treasuries do they now have interest rate risk?
What if the price of long t's fall 10 - 20%. I assume the grand plan is that if inflation picks up the fed can hoover up all the money out there by selling their treasuries, well if their portfolio is already down 20% and they try pusing out a 300B wad of 10 yr T's it's just not going to happen without further driving down the price and hiking interest.

If anyone else wants to comment on these questions feel free.

[hayekvindicated]

Re: Fed starts printing press: $1T+ in additional purchases

Are you sure that your sense of crisis is from your own thinking?

Here is a review of Naomi Klein's "Shock Doctrine." Looks like good reading.


It Takes a Crisis

Eric Klinenberg, Book Forum, September/October/November 2007

Why do so many nations have economic policies more laissezfaire and social programs less generous than their citizens prefer? In her explosive counterhistory of global capitalism, against the glib accounts offered by mainstream economists and celebrity journalists, Naomi Klein argues that the answer lies in a simple two-step strategy, honed over three decades by an international cabal of freemarket fundamentalists: First, exploit crises—whether due to economics, politics, or natural disasters––to advance an agenda that would never survive the democratic process during ordinary times. Next, create a “corporatocracy,” in which multinationals and political leaders align to promote their interests at the public’s expense.

more here:

http://www.naomiklein.org/shock-doct...t-takes-crisis

May be she can tell us how these extra programs can be paid for. In the realm of leftist fantasy land, of course, no amount of spending is too great. Klein and her ilk can rip off the fools who are willing to pay for these programs. They won't get a red cent out of me.

[ASH]

Re: Fed starts printing press: $1T+ in additional purchases

Are you sure that your sense of crisis is from your own thinking?

Yes -- my own thinking, based on numbers from the GAO and the Trustees of the Social Security and Medicare Trust Funds.

[snakela]

Re: Fed starts printing press: $1T+ in additional purchases

May be she can tell us how these extra programs can be paid for. In the realm of leftist fantasy land, of course, no amount of spending is too great. Klein and her ilk can rip off the fools who are willing to pay for these programs. They won't get a red cent out of me.

Who said people are willing?

This shock doctrine thing sounds like what the lefties are trying....use the crisis to institute whatever they want. Its a decent idea...wait till the wealthy are bent over a barrel and use their greed against them.

Of course, all this talk about wealth redistribution is just that. Nobody is proposing going after Wealth, as in money/assets already held. Gotta go after dudes like me.....never inherited one cent but doing my best to give my kids something.