The Federal Reserve's Federal Open Market Committee minutes reveal that the Fed is going on a buying spree. The Fed plans to buy $1.25 trillion of agency mortgage backed securities, $200 billion of agency debt by the end of the year, and $300 billion of Treasury securities.
One can only guess from these numbers that the Fed is extremely worried about the financial sector and is still trying to prop up the banks by buying their junk securities to get them off the hook.
Then too, the buying of $300 billion of Treasury securities is another way to pump money into the banking system. The Fed buys securities from the banks and banks in turn enter a credit on their balance sheets. This give them the money to make more loans.
The problem with this is that by buying US Treasuries, the Fed is printing more money. As you may recall, Bernake has pledged to spend $12.2 trillion dollars to bail out the financial sector. From the looks of things he's well on his way to his goal. Is there anyone out there who is keeping track of all these expenditures. How much of the $12.2 trillion has already been spent? Where is the Fed watchdog? We need one desperately.
Interest rates remain unchanged with the Fed funds rate at 0 to .25%.
Do you agree with the Fed's new expenditures?
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Reader Comments (Page 1 of 1)
8-13-2009 @ 3:35PM
MyKisa said...
....crank up the presses and tighten the binders on the American people....legal slavery
8-12-2009 @ 8:14PM
Sheldon L said...
Please provide a link to the pledge to spend $12.2 trillion.
8-12-2009 @ 8:35PM
Roland said...
It's a lot that's for sure
8-12-2009 @ 8:40PM
william lindblad said...
To "my pal shell", He may have, and than, maybe he didn't.
But I do recall that "ole Ben" mad a remark about "holding one's nose" not too long ago.
In any case, someone had better be ready to buy the junk and keep the ship on an even keel. Anywho, there was never a mention when Henry was around - they just did what was required.
8-12-2009 @ 9:01PM
Sheldon L said...
I do not know what the right amount of money it takes to keep the ship afloat is, but I sure know that first and foremost that is the No.1 priority. When the storm settles you can move on to No.2 and not before.
8-12-2009 @ 11:59PM
jeff said...
All Mr.B is doing is enriching Wall Street and no one else. This is the biggest theft of all time.
8-13-2009 @ 5:58AM
C Craig said...
Where's the accountability? Why has no investigation into the crash led to firing of bankers that engaged in the excessively risky loan leveraging? Why did no one prosecute Christopher Scott at the SEC for his removing the regulations restraining the banking greed? Why has noting been done about Sheila Bain at the FDIC stealing the Washington Mutual assets and all but giving them to JP Morgan? Now the future of the USA is being squandered bailing out the bankers with no accountability. When will America wake up and demand accountabiltiy?
8-13-2009 @ 2:25PM
evan said...
These are good comments. The fact is that after 1/2 of middle class homes are foreclosed, those with wealth (and investment funds) will be able to buy the houses at low cost and then turn those previous middle class into renters. This is unjustifiable.
If this is what it takes to keep the ship afloat, we should build a new ship.
8-13-2009 @ 7:50PM
Bill said...
Unbelieveable!! Look up the old saying, "The passing of comon sensse".
God bless America, Please.
8-13-2009 @ 7:54PM
Bill said...
Unbelievable....One should not "The Passing Of Comon Sense".
I have seen it al from all walks of life. Ben and the group are totally disconneced about what you and I are going through.