And the size of the Fed’s balance sheet is due to expand
even further. The Fed’s newest—and unlimited—bond purchases
will mean buying some $23 billion worth of Fannie and
Freddie mortgage-backed securities this month and then $40
billion a month more until economic conditions
substantially improve. (My comment----they are buying ALOT
more than this, aren't they?)
It makes no sense to attempt to, say, fund
the government by printing up money to purchase
government debt and then paying yourself back from the
interest payments.
(DUH!!!!!) But the Fed’s ability to make
oodles of money from its extraordinary actions does
indicate that, at least so far, the taxpayer hasn’t
been put on the hook for some of the most aggressive
interventions into the economy in government
history. (Yes, but only a government can buy
it's OWN BONDS and then find a way to rebate back the
interest cost!)
The Fed will, in the future, unwind its holdings and
reduce the size of its balance sheet to something like its
pre-crisis norm. The fact that it’s able to,
at least so far, remit money back to the Treasury
shows that it can at least go about its business
without putting the taxpayer on the hook.
If only all banks could say the same.
MY COMMENT: Really....and TO WHOM is the Federal
Reserve going to SELL their holdings? And if rates
RISE, and the values of those bonds go DOWN.....and they
are then sold at a LOSS/DISCOUNT to new owners, then...
those bonds (when they come due) will cost the US
Government alot MORE than than they were sold/issued
for!!!!
This is not as SIMPLE as this article seems to
indicate...and it has HUGE repercussions...but some of
their points are RIGHT ON!!
TICK TOCK........you can almost hear the financial
systems of the world all...IMPLODING>. Becuase this is
being done by MOST of the G& Nations of the
world. They, too, have figured out how to issue
bonds at ZERO interest cost!!
UGH!!!!!!!!!!!!!!!!!
YFIC,
Randy
I post some posts...simply to have GONE ON RECORD so
when bad things do happen on this topic, I can and will
say I TOLD THIS BEFORE IT was even an ISUE!!