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Fed Intends To Keep Printing $85 Billion A Month

From an unfazed Reuters:

Fed to stick to stimulus as Cyprus rekindles global risks

By Pedro Nicolaci da Costa | March 20, 2013

WASHINGTON (Reuters) – The Federal Reserve looks set to sustain its $85 billion monthly bond-buying stimulus despite improving U.S. economic data as a new flare-up in the euro zone crisis reminds officials of a risky global environment.

As it wraps up a two-day meeting on Wednesday, the U.S. central bank’s policy-setting Federal Open Market Committee will continue debating the potential costs of quantitative easing, including the possibility its easy money policies will inflate asset market bubbles.

Actually, they want to inflate this asset market bubble. They want too keep the stock market artificially high so ‘journalists’ and other the low information types will think the economy is turning around.

And it’s clearly working, since even Reuters claims the economy is improving.

But Fed Chairman Ben Bernanke has made clear he still firmly believes the benefits are palpable, and the risks worth taking…

The Fed will release its policy statement, along with a new set of economic projections, at 2 p.m. (1800 GMT) and Bernanke will get a chance to answer reporters’ questions at a quarterly news briefing a half hour later.

These news conferences are always so informative. (Not.) Probably because the journalists have not idea what they are talking about.

One key indicator that bolstered confidence in the U.S. recovery was a February employment report showing a lower jobless rate, down 0.2 percentage point at 7.7 percent, and the creation of 236,000 net new jobs.

Which once again proves the point we just made about journalists. This ‘recovery’ is still the worst in the history of our nation. And the GDP is an eyelash away from being in a recession.

If that pace of job growth can be sustained for a few months, the Fed might be able to claim substantial progress has been made toward an improved employment outlook – its own stated prerequisite for the cessation of bond buys.

So if unemployment goes down by .4 or even .6%, the Fed will declare victory? With unemployment still over 7%?

If anything, developments in Cyprus, where the announcement of a tax on bank deposits to help fund the country’s bailout sent jitters through the global financial system, are likely to reinforce the resolve of Fed officials to bolster the U.S. economy…

The real irony here is that the Federal Reserve is doing what the Cypriot government was stopped from doing. But the Fed are doing it by a backdoor method. By ‘printing’ $85 billion dollars a month, they are devaluing our currency and thereby people’s savings at an incredible rate.

It is a subtle form of thievery. But it is still thievery.

Global concerns aside, the Fed has plenty of reasons not to begin pulling back on stimulus yet. Its preferred measure of inflation continues to run below the Fed’s 2 percent target and unemployment remains far above its pre-recession levels.

Only because they are lying about the real rate of inflation. As anyone who eats food or buys gasoline knows. (Their inflation index conveniently excludes both food and energy prices.)

"I don’t see any sign or reason for the policy to change," said Josh Shapiro, co-founder and chairman of Sonecon, a Washington-based economic advisory firm. "If anything, one might think an expansion of the current policy might be warranted." …

Why not? Why not print $100 billion dollars a month? What could possibly go wrong?

It worked great for the Weimar Republic and Zimbabwe.

This article was posted by Steve on Wednesday, March 20th, 2013. Comments are currently closed.

3 Responses to “Fed Intends To Keep Printing $85 Billion A Month”

  1. Petronius says:

    We’re in uncharted waters.

    Bernanke has created three times as much money as all of the other Fed Chairmen combined.

    The markets have become addicted to the Fed.

    All this QE monetary stimulus is creating an ocean of money that is driving stocks higher.

    But most of the normal signs of economic recovery aren’t present yet :

    • Despite all this new money, household incomes are down sharply.
    • Millions of people have lost their homes, their jobs, and their retirements, while the president is openly hostile to business and foments class warfare.
    • Copper and oil prices aren’t rising, they’re bottoming or falling.
    • Oil service companies are forecasting reduced drilling demand.
    • Interest rates are creeping up, not down.
    • Small businesses are struggling, buried in government red tape and spooked by ObamaCare.
    • Unemployment remains high with U3 around 8 percent, even though millions of people have left the workforce.
    • Record numbers are in poverty, on food stamps, and on disability, while both political parties clamor for more immigrants.
    • New housing construction is at 1960s levels, when the US population was about half what it is today.
    • The public debt is at a crushing level and will probably be downgraded again this year.
    • And the Fed is buying most of this massive US debt, and vows to keep buying bonds indefinitely, creating even more money.

    All this new money in the pipeline is eventually going to drive inflation much higher. Bernanke says he can control it, but can he really?

    Fed watchers will be listening this afternoon to see if Bernanke says the economy is growing. But if the economy is growing, will the Fed cut back on stimulus?

    The whole situation is mind boggling.

  2. GetBackJack says:


    More free money!

    /not for you citizen
    //stand behind the security line

  3. Rusty Shackleford says:

    Looks more to me like they are either intentionally engineering a crash or, blindly driving at 200mph at night in a downpour thinking their GPS will inform them of the bridge out ahead.

    In any case, a distinction without a difference.

    Off we’ll go….1929. Deja vu all over again.

    “The one thing about humanity is its propensity to repeat failure over and over and then demand it to change”.

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