Federal Reserve Finds $600 Billion in the Couch
Trying to follow the amount of money the Federal Reserve has pumped into the economy (and the banks) can be truly mind-boggling, and it's not getting easier. (continued)
Trying to follow the amount of money the Federal Reserve has pumped into the economy (and the banks) can be truly mind-boggling, and it’s not getting easier.
The Fed announced plans Wednesday to purchase $600 billion worth of Treasury bonds and to buy more of the Treasury’s debt — up to $900 billion by June.
The timing may not be a coincidence. A former Fed governor tells The New York Times that Fed Chairman Ben Bernanke would prefer more stimulus money from Congress, but the new Republican majority in the House makes that unlikely. — PZS
WAIT BEFORE YOU GO...The New York Times:
Laurence H. Meyer, a former Fed governor who closely monitors the central bank, said the prospect of sustained fiscal gridlock had already pushed Mr. Bernanke to move.
“Bernanke has said that fiscal stimulus, accommodated by the Fed, is the single most powerful action the government can take for lowering the unemployment rate ,when short-term rates are already at zero,” Mr. Meyer said. “He has nearly pleaded with Congress for fiscal stimulus, but he can’t count on it. So he has to act as if that’s not going to happen. “
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Market forces are colliding as another U.S. financial crisis brews. Meanwhile, sit tight on the roller coaster.
The September/October issue of Foreign Affairs features an article titled “Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.” It’s the sort of thing normally heard only from money reformers and Social Credit enthusiasts far from the mainstream. What’s going on?
"Hundreds of pages of transcripts, based on recordings made at the time, reveal the ignorance of Fed officials about economic conditions during the climactic months of the financial crisis," The New York Times reports.
Congress has the power to amend the Fed -- just as it did in 1934, 1958 and 2010. For the central bank to satisfy its mandate to promote full employment and become an institution that serves all the people -- not just the 1% -- the Fed needs fundamental reform.
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