Wednesday, December 08, 2010

Fed charmain caught in a blatent lie

If the Federal Reserve Bank thinks that printing money is good for the economy and ultimately helps the average citizen, then chairman Ben Bernanke should gladly admit that he's printing money and bask in our gratitude.

But when the Fed prints money and lies about it, it does not inspire confidence.


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3 comments:

The Western Chauvinist said...

Two things... Bernanke's gonna need some serious magic to save this economy after the "magical" malpractice of all this "quantitative easing"... and I wish they'd turn the camera's around and show Stewart's organ grinder's monkey of an audience sometime. These people will laugh at anything he says.

"Hyper-inflation." Ha ha ha! "Money out of thin air." Ha ha ha! "Devaluing the nation's currency." Ha ha ha! "National embarrassment." Ha ha ha! "Destroying private assets." Ha ha ha! "Utter disregard for the will of the governed." Ha ha ha! Very funny.

Jody Wilson said...

You're right - the laughter from Stewart's audience is a bit over the top.

John said...

One of my favorite financial information web sites (besides Hodar of course) is dshort.com. There a very interesting posting showing the change in bond yields since QE2. Below is a part of the posting.

"The QE2 Grenade: A Closer Look at Treasury Yield Increases
December 9, 2010 new update

The adjacent table represents the percent change in each of seven maturities since the November 3rd FOMC press release announcing the details of the latest round of quantitative easing (aka QE2). The increases are absolutely stunning. Imagine, for example, buying a 3-year Note only to discover that, had you delayed a month, the yield would have been 115% higher yield.

As I've said before, it's probably still too soon to write off the effectiveness of the new round of Fed Treasury purchases. But if a key objective was to keep interest rates low, the Fed's "Hail Mary" pass appears to have been a grenade. Consider: As of this morning the bankrate.com survey of mortgage overnight averages puts the 30-year fixed at 4.91% versus 4.24% when the Fed announced QE2. That's a 15.8% rate increase."

The website has an excellent table showing the different bond yields and the change from pre-QE2 to post-QE2.

The article on the Q-quotient is a bit frightening as well. I'd be interested in your analysis.
John from CO