Fed stays the course...

[PorscheA]

Stocks Hit Record As Fed Keeps Bond Buying At $85B A Month - Forbes

I would be scratching my head too.

[KFC911]

[QUOTE=PorscheA;7663564...I would be scratching my head too.[/QUOTE]

May I ask why? Whether one agrees with the QE methodology or not, one of their mandates is "jobs" (like it or not), and they (Ben B) have clearly stated their target since it was first implemented 'bout a year ago. We have yet to reach that target...getting close, but still not quite there yet. Bernanke isn't doing this alone...as a board, they are slowly moving in that direction...soon (and that's a good thing imo), but just not today...not quite at their target (yet). I realize it's not "cast in stone", but imo, folks anticipating otherwise just haven't been paying attention to what Ben's been saying for quite some time...YMMV.

[SeanPizzle]

massive inflation in 3....2.....1.....


Our nations savers (our retirees) are getting massively screwed by this cheap money and the inflation it will cause.

[pksystems]

Eventually the rest of the world is going to stop buying the Monopoly money.

[Porsche-O-Phile]

They already have. Most treasuries are bought by the fed.

The federal reserve is an absolutely criminal institution, yet they're allowed to keep right on running us into the ground day after day, year after year and nobody cares.

[mikesride]

So to "dumb this down" for some of us.....If you need money this is good news, if you have money its bad news.....or am I missing a way bigger picture here? Not a smartass remark, but a real question, looking for real opinions from both sides of the political landscape if possible. Does the majority think this is a horrible or needed policy?

[Chocaholic]

As long as you move your investments to cash at the perfect time, all is good.

What could go wrong?

On a related topic, as I recall, the Sequester was an $85B one-time spending rollback that was supposed to have devistating impact. Here we have the Fed pouring $85B every month into the economy keeping rates artificially low. Seems an interesting coincidence. No?

[KFC911]

I for one think Bernanke and the board have done a pretty dang good job. Considering where our economy was back in the fall of '08, and the "deflation" we were in, I've been impressed. I lost my job back then, but didn't panic, and now my retirement portfolio has recovered WAY better than I could have ever imagined. Most of the treasury notes are purchased by pension funds, etc. and I don't think more than 12-15% is owned by foreigners (same as it's always been). Around here, housing has indeed recovered (a truly dead horse back when), and unemployment is slowly but surely getting there. Locally, our economy is doing just fine...don't know how much is just cyclic, and how much is from the various stimuli. Either political party would have been doing the same thing imo. It is time to get rid of the "cheap money" imo...what's it been now...10 years? It helped fuel the housing bubble (we're now in another one imo). I'll say this however...I wish BB was staying on to unwind this...I do believe he's the best man for the job. Just my .03 (inflated) worth

[sammyg2]

Hey, lets print a whole bunch of money, which will make the money worth less and less, which will make our national debt effectively lower because the $17 trillion we owe will only be worth billions!

Ever wonder why they have to raise the debt limit two or three times a year lately?
'Cause the act of devaluing the debt creates more of it. Kind of a stupid game to play iffn you ask me.

other things get effected too, like stocks.
If the value of a dollar goes down, it takes more dollars to buy a share of stock even though the value of the stock doesn't change.

Same with crude oil, which is why we're paying $106/bbl for oil that's worth $75.

Don't want to talk about savings accounts or 401ks ..........

[Rick Lee]

Originally Posted by mikesride

So to "dumb this down" for some of us.....If you need money this is good news, if you have money its bad news.....or am I missing a way bigger picture here? Not a smartass remark, but a real question, looking for real opinions from both sides of the political landscape if possible. Does the majority think this is a horrible or needed policy?

That sounds about right to me. Problem is that the vast majority (and I mean like over 70%) of Americans have no idea what QE is, who Ben Bernanke is, what the Fed does or why it's bad for us. The only thing politicians care about is making sure that anyone who feels the pain is a small minority of people and, well, taxpayers are almost a minority. The majority will need money, already carry a lot of debt and so they'll think artificially low interest rates are a good thing.

[cairns]

Great news for anyone who's pegged their currency against the dollar. Not so great for dollar holders wanting to buy other currency. Your Porsche just got more expensive.

October will be here soon enough.........

[john70t]

"I'd gladly pay you tuesday for a hamburger today"
-Wimpy from popeye.

[jyl]

The Fed's problem is that while they have been doing their job of enabling the recovery through supportive monetary policy, for the past couple years Congress has been hurting the economy through tightening fiscal policy - and bouts of no policy at all (aka government shutdown, budget stalemates, etc).

Last year's Congressional tantrum, the threatened default on US govt debt, downgrade, and budget stalemate did real damage to the economy and choked off the recovery that was accelerating. Consumer confidence sank and we had a bad holiday season.

This year the economy has started building up to a recovery again, GDP is improving to around 3%, employment is up, business investment is rising, and what is really promising ist that the global economy is starting to pick up as well. But we are headed for another Congressional budget stalemate, in a few weeks.

Bernanke has been repeatedly warning that fiscal policy has to start carrying its share of the load. He has come as close to chewing out Congress as he can (he is forced to use very nuanced language). He has no faith in them, so he has decided not to risk starting the tapering - even a tapering-lite - right when Congress is about to give the economic recovery another gutshot. I imagine he sees it as the better of evils, and will start tapering (or his successor will) as soon as this risk passes.

[BE911SC]

Keep in mind who controls the global (western) monetary system. It's a small number of very rich and powerful finance guys in New York City (with a branch office in the White House). Low rates mean cheap money for them to borrow and invest in their large computer trading systems, the systems that make trades in milliseconds and yield the biggest profits for their owners. Keep in mind too that Bernanke, Paulson, Geithner, Rubin, etc.--the guys who hold office in the Treasury and Fed--are ALL Wall Street guys and direct the policy decisions from their perspective and to their benefit. The rest of us, if we benefit, do so only after they do. And yes, when/if the system fails they will 1. direct the federal government to cover their losses (2007-08), and 2. shovel some/much of that money into their own coffers through bonuses, etc. It's small wonder guys like Robert Rubin and Jamie Dymon usually have those Cheshire-cat smiles on their faces.

"Oh I don't have any money in the market."

--Robert Rubin, when asked by a small group of Wall Street professionals what his strategy was as the tech bubble was close to bursting.

"It was like an earthquake. I went right back to my office and started selling my portfolio into cash. No, I didn't tell anybody right away. I mean, if Bob Rubin isn't in the market that is a major indicator of the faults in the system. I was just stunned that he said that to us."

--One of the bankers in the group talking to Rubin.

Those most addicted to cheap government money are the Wall Street guys. If they want the Fed to 'stay the course' (keep it cheap) then that's what the Fed will do. Markets reacted accordingly:

http://www.huffingtonpost.com/2013/09/18/stocks-record-high_n_3950289.html

[BE911SC]

Originally Posted by jyl

The Fed's problem is that while they have been doing their job of enabling the recovery through supportive monetary policy, for the past couple years Congress has been hurting the economy through tightening fiscal policy - and bouts of no policy at all (aka government shutdown, budget stalemates, etc).

Last year's Congressional tantrum, the threatened default on US govt debt, downgrade, and budget stalemate did real damage to the economy and choked off the recovery that was accelerating. Consumer confidence sank and we had a bad holiday season.

This year the economy has started building up to a recovery again, GDP is improving to around 3%, employment is up, business investment is rising, and what is really promising ist that the global economy is starting to pick up as well. But we are headed for another Congressional budget stalemate, in a few weeks.

Bernanke has been repeatedly warning that fiscal policy has to start carrying its share of the load. He has come as close to chewing out Congress as he can (he is forced to use very nuanced language). He has no faith in them, so he has decided not to risk starting the tapering - even a tapering-lite - right when Congress is about to give the economic recovery another gutshot. I imagine he sees it as the better of evils, and will start tapering (or his successor will) as soon as this risk passes.

Pardon my PARF, but yes, the house minority Republicans, in their panic to cripple Obama, have hurt the global economy with the sequester and their insane stance on the debt ceiling. Gramm-Rudman was written in the 1980s as an atomic bomb meant never to be used. It worked for over 25 years until the Tea Party congress came along in 2010. Gramm-Rudman forced congress to talk over their differences and reach compromise before real harm to the economy (through petty, stupid political tricks) could occur. Now all bets are off. Governments all over the world are looking at us and shaking their heads. Boehner just surrendered to the crazies in his caucus and now we're in for another kick in our economic balls. Get into cash before October 15th.

[onewhippedpuppy]

Originally Posted by BE911SC

Pardon my PARF, but yes, the house minority Republicans, in their panic to cripple Obama, have hurt the global economy with the sequester and their insane stance on the debt ceiling. Gramm-Rudman was written in the 1980s as an atomic bomb meant never to be used. It worked for over 25 years until the Tea Party congress came along in 2010. Gramm-Rudman forced congress to talk over their differences and reach compromise before real harm to the economy (through petty, stupid political tricks) could occur. Now all bets are off. Governments all over the world are looking at us and shaking their heads. Boehner just surrendered to the crazies in his caucus and now we're in for another kick in our economic balls. Get into cash before October 15th.

Sure, because God forbid the government actually curb spending and balance the books. You know, like responsible citizens do.

[KFC911]

Originally Posted by onewhippedpuppy

Sure, because God forbid the government actually curb spending and balance the books. You know, like responsible citizens do.

I don't disagree, but this nonsense with the debt ceiling is just political theater imo. I think it's been raised 50+ times in my lifetime, and doesn't have a damn thing to do with actually balancing the books. As long as both parties play us like fools, the nonsense will continue imo. You wanna set a limit? Then "I" get to make the cuts to your favorite programs. Change roles (i.e. vote 'em out), then rinse, lather and repeat (every 4 years) . Of course I'm joking, but it would probably work better than what we've been doing

[onewhippedpuppy]

Originally Posted by KC911

I don't disagree, but this nonsense with the debt ceiling is just political theater imo. I think it's been raised 50+ times in my lifetime, and doesn't have a damn thing to do with actually balancing the books. As long as both parties play us like fools, the nonsense will continue imo. You wanna set a limit? Then "I" get to make the cuts to your favorite programs. Change roles (i.e. vote 'em out), then rinse, lather and repeat (every 4 years) . Of course I'm joking, but it would probably work better than what we've been doing

Agree, unlike our friend above I'm realistic enough to see that the blame lies on both sides of the aisle. Let's face facts, most of our elected government is there to serve themselves. And when I speak of balancing the budget I don't have any notion of a debt ceiling, balancing the budget means that you don't spend more than you take in. Considering the way they rape those of us that actually pay taxes, that shouldn't be a challenge.

[island911]

Originally Posted by jyl

The Fed's problem is that while they have been doing their job of enabling the recovery through supportive monetary policy, for the past couple years Congress has been hurting the economy through tightening fiscal policy - and bouts of no policy at all (aka government shutdown, budget stalemates, etc).
....

This thinking it presupposes that government activity adds to the economy. It is the thinking that if the government hires one group to dig a hole, and another group to fill it in; that we will have a net -add- to the economy. Of course, we could simply print more money and handed out to the hole diggers, and hole fillers as if they had done the work.

TSA workers? All of those people who " work" to check your car for proper emissions? Yeah, those would be job programs.

[RWebb]

Originally Posted by jyl

The Fed's problem is that while they have been doing their job of enabling the recovery through supportive monetary policy, for the past couple years Congress has been hurting the economy through tightening fiscal policy - and bouts of no policy at all (aka government shutdown, budget stalemates, etc).

Last year's Congressional tantrum, the threatened default on US govt debt, downgrade, and budget stalemate did real damage to the economy and choked off the recovery that was accelerating. Consumer confidence sank and we had a bad holiday season.

This year the economy has started building up to a recovery again, GDP is improving to around 3%, employment is up, business investment is rising, and what is really promising ist that the global economy is starting to pick up as well. But we are headed for another Congressional budget stalemate, in a few weeks.

Bernanke has been repeatedly warning that fiscal policy has to start carrying its share of the load. He has come as close to chewing out Congress as he can (he is forced to use very nuanced language). He has no faith in them, so he has decided not to risk starting the tapering - even a tapering-lite - right when Congress is about to give the economic recovery another gutshot. I imagine he sees it as the better of evils, and will start tapering (or his successor will) as soon as this risk passes.

well put

and right now, Bernanke et al. are likely worried by more idiotic govt. shutdowns from Congress