The Federal Reserve, the country’s central bank, has pumped an additional $75 billion into the market. As they are doing this, they seem adamant that no one label this what it actually is: QE4.
The Federal Reserve is expected to resume its balance sheet expansion in response to demand for bank reserves. The central bank is reacting to a crunch last week in the overnight repo markets that sent short-term borrowing rates for bank’s surging, according to a report by CNBC. By doing this, the Fed is intentionally embarking on a different kind of program from the asset purchases used to pull the economy out of the financial crisis, but it’s still QE4.
Where the Fed under the quantitative easing of a decade ago was buying assets to pull the economy out of the Great Recession, this time it will be looking to meet the demand for cash as it tries to calibrate the proper level of reserves that banks need. Either way, the details vary, but the outcome is the same. Money is created out of thin air to help a flailing economy. Don’t expect your dollars to do anything other than lose what little value they have left.
The Fed is in the process now of conducting overnight repurchase, or repo, operations to make sure that funding for overnight loans stays constant and the funds rate trades within its targeted range of 1.75%-2%. In announcing the program, officials noted that the last time such a process happened was 11 years ago, amid the grim days of the crisis when liquidity dried up and caused a panic on Wall Street. –CNBC
The Fed initiating QE4 (but don’t call it that) has many people on edge. “Anytime you have anything juxtaposed to 2008, it tends to cause anxiety. What it did was suggest that the Fed doesn’t have a handle on this,” said Quincy Krosby, chief market strategist at Prudential Financial. “They weren’t able to foresee this. That said, if they could come up with a facility for this, the issue will dissipate as a source of concern.”
The Money GPS titled their YouTube video accurately: Repo-calypse and the end of the Financial Markets As we Know It.
Each intervention increasingly distorts price discovery requiring greater future interventions. Don’t kid yourself, this isn’t capitalism.
How about give the $75 Billion directly to the American People to stimulate the economy with new growth industries and demand for products. That’s a win win…
Naw, that’s too smart, Keep giving it all to the Chewish bankers. They just dump it back in the federal reserve and make interest on the money they were given, and the tax payers get to keep on paying the interest on the debt we loaned them.
Read the “Economic Hitman” book.
Where’s my cut of the $75 Billion?
TSB asked, “Where’s my cut of the $75 Billion?”
Each foreign business sector, in the book, probably has a too-big-to-fail leech attached.
Each of these probably has a dividend attached.
You would probably, maybe borrow at a lower interest rate and lend/invest at a higher interest rate.
One purpose of hedges is to crowdfund it, imho.
I am not an example to be followed and do not morally endorse any of these businesses.
In the old days, before the “federal” reserve, the banksters would simply hire mercenaries to burn down the white house and restore the central bank like they did in 1812. Now, they just respond to the threat by flooding the country with money so it becomes worthless and inflates to the point that a loaf a bread costs hundreds of dollars.
How many of you all are still waiting for the 1980’s Reagan Trickle Down Economics program scam to kick in?
Forever one step ahead of reality, chaos agents would change the dictionary.
“they seem adamant that no one label this what it actually is”
Marxist 5th Plank lending monopoly ->
Political Favorites ->
Proles
Trickle-down Reaganomic state capitalism is structurally, functionally Communist. We have just changed the wording of it.
Alot of these mom-and-pops, small farm business fronts, and artisinal, historical reenactments are based on subsidies with no productivity quotas.
Big business is mainly a funnel, with very little of material value, to back it.
Corporate welfare is like charity.
“The central bank is reacting to a crunch last week in the overnight repo markets”
I think, if you directly have business with these entities, you should directly be getting the news from them, rather than it percolating through countless, automated feeds.
I would find it more constructive, if they had suggested ways to position yourself, financially, based on your wealth or participation level.
Clown World
“Trickle-down Reaganomic state capitalism is structurally, functionally Communist.”
Actually its fascist with private wealth controlling public wealth (government) whereas under communism its the inverse. The drivers of this the Rothschilds, Rockefeller (and many others) with Soros as a front man certainly are not communists. They use communism as human resource managers.
We say that drugs, guns, and words for body functions are just useful tools with no particular ethos.
Statism might be considered in the same light.
K said, “They use communism as human resource managers.”
I can’t improve upon what you have said, very substantially.
When I read Marx’ manifesto, it mainly seems to describe the functions of a govt, but without any superstition or higher cause, other than said resources.
None of the antagonists seen at street level are tolerated, once the questioned resources have been co-opted by banking interests.
Clown World
The very top “allocate” X amount of wealth to the bottom to be distributed relatively equally (welfare state) to pacify the body politic (food and circus) so they don’t revolt against them. Interestingly these new “Robber Barrons” often pay wages so low that a new term has been generated, “the working poor”. Sometimes, actually its becoming too often, their employees are subsidized with EBT (food stamps) by the taxpayer in effect, government subsidizing business. This phenomenon is largely the byproduct of “Free Trade” globalization where well paid labor in the developed world must compete with virtual slave labor in the developing world.
“Open competition between high-paid American labor and poorly paid European labor will either drive out of existence American industry or lower American wages.”
William McKinley
At least “Trickle Down” was somewhat appropriately named. A bit more applicable would have been: “You get the crumbs”.
h ttps://en.wikipedia.org/wiki/NEPman
I am still trying to decide whether the robber barons are just frontmen for the middle class investors, or vice versa.
“repo markets”
How can I be a vulture on this human misery?
Trace the story to it’s sources, for starters.
was it in a movie…. “To infinity, and beyond!!” ??
QE TO INFINITY
I wasted about 5 quarters of college as a business major, it was an easy degree to get. I got the Wall street Journal at student prices. I learned this before I switched to Mathematics Major,
There are really two markets, the consumer market Safeway, Home depot, Walmart, and millions of other like businesses we directly depend on for our day to day “Stuff”. Then there are the investment markets NYSE, NASDAC, PMs, et al.
I go to a Walmart I put some money out and I get 5 Quarts of
10-40 Synthetic motor oil. It is a sure thing.
I send a $50,000 dollar check to Dodge and Cox and I may or may not get all my $50,000 back.
Full disclosure; I never lost money with Dodge and Cox.
The difference is investment markets are like gambling, the house always wins and gets it’s cut, They don’t lose. You the gambler may win or you may lose, because you can’t stay there long enough odds are against you.
Now comes the government and world banks marking the cards so what statistics I was taught no longer apply.
It becomes subject to the whims of politics.
The only way to break even is to not play the game.
Be/ get to be debt free.
Invest in land.
Don’t get greedy.
Aloha.
What is the difference?
rellik
I did real well with refining stocks as I understood the industry. I bailed out in Feb 07 sensing a crash. I never got back in to a major degree (in & out) after that not realizing the ability of QE. The various liquidity injections and bailouts turned investing into a rigged game. It’s now bubble, burst, inflate bubble, burst, repeat.
Economic instability creates social instability which manifests into political instability. War then replaces economic policy in foreign affairs. As Clausewitz said: “War is politics by other means”.
We’re headed down a bad road.
Dallas Fed’s Kaplan: U.S. needs more, not less, immigration for economic growth
Because each illegal costs the taxpayer $75k, which all ends up on the bottom lines of Walled Street cons.
I said it many years ago, the real reason for the immigration is the trillions that have to be spent on entitlement s for these unemployable useless eating shitholers. There we have it!!
Bert
Coming from the same mindset as “Cash For Clunkers” destroying useable cars on purpose.
Remember:
WASTE IS GOOD
I saved $1600 in Sales tax when I bought my last Brand new SUV vehicle in 2009 under the Obama, “Cash for Clunkers” program. I did not trade in any vehicle, just got the $1600 sales taxes, knocked off the sales price, I think I had to file some form in that years taxes.. At any rate, I saved money. And 10 years later I only have about 54K miles on the vehicle. Runs like a top. I buy new, pay them off in a few years them drive them for virtually free for the next 10 to 12 years.. Only maintenance on this SUV, has been tires, batteries and brakes, and windshield wipers. Oh, and a few measly wheel sensors and Reg oil changes with synthetic oil. Take care of your vehicles and they will take care of you.
Allow the invasion of 40 million more illegal alien shitholers
Ironically, you posted Brandon Smith’s article the day before this one, which points out how this $75B is NOT QE.