jim4silver
Silver Member
- Apr 15, 2008
- 3,662
- 495
What's next for QE and such?
It seems to me like we are getting inconsistent messages about what the Fed is going to do. One minute they are going to taper soon because of the "improving economy", whatever that is. Next minute they say they won't stop unless unemployment gets to some magical lower number we all know won't be reached any time soon. Everyone remembers the Sept meeting where all the pros said tapering would be announced and the Fed said no taper because things are good enough yet. So how are they any better now then a couple months ago?
I don't remember where I read it a month or two ago, but there was an article about how the Fed is holding different "assets" on its books (I don't remember specifically if it was the mortgage backed securities?) that are very interest rate sensitive. This article came out when the 10 year rate was jumping up and the author claimed if the 10 year got a bit over 3.0 and held, the Fed would be in deep trouble because many of these "assets" they are holding will start to lose value fast. If that is true, maybe the Fed will start tapering because they have to, but then come up with some other way to "stimulate" the economy. What that could be I don't know.
Here is an article from a while back that talks about a speech that Bernanke gave in 2002 when he was a fed governor, where he talks about steps the Fed could take to help fight a depression and such. The only one we haven't done yet is the last one he talks about in the speech- dollar devaluation. Bernanke speaks in glowing terms about how the 1933 dollar devaluation (this was Roosevelt's executive order seizing gold) saved the day and how it could be done again if necessary (not a gold seizure, but another dollar devaluation). Since the dollar is not tied to gold anymore there is no reason they need the gold in order to do what Roosevelt did back then re: the dollar's value.
You can read the actual speech transcript in its entirety on the Fed reserve website if you wish to go there, but the article gives a concise explanation of Bernanke's 2002 speech and a bit about the 1933 executive order and what transpired.
Will The Federal Reserve Devalue The Dollar? - Rare Metals Guy - Seeking Alpha
Here is another article about the speech.
http://alternativeeconomics.wordpre...alued-ben-bernanke-already-told-us-his-plans/
All my opinion.
Jim
It seems to me like we are getting inconsistent messages about what the Fed is going to do. One minute they are going to taper soon because of the "improving economy", whatever that is. Next minute they say they won't stop unless unemployment gets to some magical lower number we all know won't be reached any time soon. Everyone remembers the Sept meeting where all the pros said tapering would be announced and the Fed said no taper because things are good enough yet. So how are they any better now then a couple months ago?
I don't remember where I read it a month or two ago, but there was an article about how the Fed is holding different "assets" on its books (I don't remember specifically if it was the mortgage backed securities?) that are very interest rate sensitive. This article came out when the 10 year rate was jumping up and the author claimed if the 10 year got a bit over 3.0 and held, the Fed would be in deep trouble because many of these "assets" they are holding will start to lose value fast. If that is true, maybe the Fed will start tapering because they have to, but then come up with some other way to "stimulate" the economy. What that could be I don't know.
Here is an article from a while back that talks about a speech that Bernanke gave in 2002 when he was a fed governor, where he talks about steps the Fed could take to help fight a depression and such. The only one we haven't done yet is the last one he talks about in the speech- dollar devaluation. Bernanke speaks in glowing terms about how the 1933 dollar devaluation (this was Roosevelt's executive order seizing gold) saved the day and how it could be done again if necessary (not a gold seizure, but another dollar devaluation). Since the dollar is not tied to gold anymore there is no reason they need the gold in order to do what Roosevelt did back then re: the dollar's value.
You can read the actual speech transcript in its entirety on the Fed reserve website if you wish to go there, but the article gives a concise explanation of Bernanke's 2002 speech and a bit about the 1933 executive order and what transpired.
Will The Federal Reserve Devalue The Dollar? - Rare Metals Guy - Seeking Alpha
Here is another article about the speech.
http://alternativeeconomics.wordpre...alued-ben-bernanke-already-told-us-his-plans/
All my opinion.
Jim
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