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The Fed Says Potato, the Market Says Potahto – Let’s call the Whole Thing Off!
- November 16, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
No CommentsThe Wall Street Journal reported, today, that investors are selling off U.S. government debt, challenging the Federal Reserve’s efforts to push interest rates lower, and, instead, driving rates, in many cases, to their highest levels in more than three months (See previous blog post: Inflation Nation). The rise in borrowing costs is a most unwelcome
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QEII – No Luxury Liner for the Average Citizen
- November 6, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
As the country was watching the election results of November 2, 2010, the Federal Reserve was quietly implementing the second monetization of debt, called QEII. This Keynsian-style move of issuing debt and buying it back has some unintended consequences: First, the dollar is devalued. It is estimated that the dollar will be worth 20% less
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Insanity – Fed Considering Options That Are Sure to Fail
- October 15, 2010
- Posted by: Ted Bullen
- Category: Economy, Government, Monetary Policy, News
Albert Einstein is quoted as saying: “Insanity: doing the same thing over and over again and expecting different results.” The Federal Reserve is expected to initiate a new round of Treasury purchases, thus monetizing more debt to add to the $1.7 trillion in longer-term assets it has already bought. Typically, “if a budget deficit persists
