File under BOHICA:

The Federal Reserve will spend $45 billion a month to sustain an aggressive drive to keep long-term interest rates low. And it set a goal of keeping a key short-term rate near zero until unemployment drops below 6.5 percent.

The policies are intended to help an economy that the Fed says is growing only modestly with 7.7 percent unemployment in November.

The Fed said in a statement issued Wednesday that it will direct the money into long-term Treasurys to replace an expiring bond-purchase program. The new purchases will expand its investment portfolio, which has reached nearly $3 trillion.

If this were to go on a year, that’s $540 billion worth of QE — or “money printing” as we used to say. That’s over $4,000 per household in the United States. And in the end we’ll be back right where we are (or worse)… with some inflation added for flavor.

Comments

22 Responses to “QE 4: $45 Billion a Month Bond Buyback”

  1. backwoodsconsr on December 12th, 2012 6:31 pm

    It's so nice of them to devalue my money that way. I really needed to have my buying power reduced.

  2. Truesoldier__ on December 12th, 2012 7:07 pm

    "a goal of keeping a key short-term rate near zero until unemployment drops below 6.5 percent. The policies are intended to help an economy that the Fed says is growing only modestly with 7.7 percent unemployment in November."

    Of course The only reason unemployment is at 7.7% is that over half a million people stopped looking for work. With that being the case we may actually see unemployment drop to around 6.5% or lower come the new year when the extended unemployment benefits expire at the end of the year.

  3. Marshall_Will on December 12th, 2012 7:58 pm

    To further buttress: From Investopedia,

    "There is also an argument that QE has psychological value. Experts can generally agree that quantitative easing is a **last resort for desperate policy makers**. When interest rates are near zero but the economy remains stalled, the public expects the government to take action. ( Really? Many said Let.Them.Fail! ) Quantitative easing, even if it doesn’t work, ( and it hasn't ) shows action and concern on the part of policy makers. Even if they cannot fix the situation, they can at least demonstrate activity, which can provide a psychological boost to investor confidence."

  4. backwoodsconsr on December 12th, 2012 8:04 pm

    It's a triumph of politics over economics. It's more important for the politicians to look good than to do good. Gotta get reelected if they don't do anything else.

  5. Truesoldier__ on December 12th, 2012 8:13 pm

    Exactly. They never learn that once you are in a hole stop digging. I swear the plan these morons have is to keep digging till they hit the bank of China.

  6. backwoodsconsr on December 12th, 2012 8:16 pm

    There's no money in the Bank of China. It's all been loaned to Obama.

  7. Truesoldier__ on December 12th, 2012 8:18 pm

    Well duh, they are digging to the bank of China so that they can put money, from QE, back into the back so there will be money to borrow.

  8. Truesoldier__ on December 12th, 2012 8:19 pm

    MW…speaking of Benghazi. I just saw some news on it. DoD admits that they did have live drone feed of Benghazi, but they didn't pipe it into the WH. Of course this only creates more questions than answers.
    http://p.washingtontimes.com/news/2012/dec/11/def

  9. backwoodsconsr on December 12th, 2012 8:21 pm

    Oh, so the Bank of China has become a Chinese laundry.

  10. Truesoldier__ on December 12th, 2012 8:30 pm

    Bingo!

  11. Marshall_Will on December 12th, 2012 8:43 pm

    Read once on ZeroHedge it's been estimated the entire "value" of the liquidity, contracts, options and funky 'derivatives' floating around out there in cyber-space equal to approx. over 4 X what the entire freaking PLANET is worth..!

    So obviously the answer here is to print more money? My trading buddies kidded around that the Fed should issue Futures Unlimited Contract Tranches as to when/IF they'll ever reach a deal on the Fiscal Abyss? I said well, what will we CALL them, and they said, easy!

    FUCT's! ( Sorry ladies… )

  12. Marshall_Will on December 12th, 2012 8:51 pm

    “You get a lot of good information from a surveillance aircraft, but it doesn’t necessarily provide you a complete and instant picture of what is happening on the ground. If you’re going to undertake military action, you’d better have solid information before you decide to take the kinds of steps that are required to effectively complete a military mission of this sort.”

    Right, like waiting for HD and 5.1 Digital Sound Surround (TM) to kick while the popcorn gets buttered as troops are getting their azz kicked. That'd by my call every time!

  13. Truesoldier__ on December 12th, 2012 8:55 pm

    Hey they were waiting for the Blu-Ray release so they would know what would happen.

  14. Marshall_Will on December 12th, 2012 8:56 pm

    Just wanted to add, we've been way too compliant letting, nay, GREASING the Snake Charmer-in-Chief drive the narrative about what THEY are doing when there's actual, physical evidence to be shared.

    We need to start treating Carney, Clinton, Holder and the whole damned bunch like the flunky sycophants they are. We're only interested in what DROVE their comments, hardly their comments/pulp themselves.

    Suck the life out the newscycle by yourselves!

  15. backwoodsconsr on December 12th, 2012 9:15 pm

    That reminds me of the old joke about what happened to Maybelline. Max Factor.

  16. Marshall_Will on December 12th, 2012 9:23 pm

    Why, were they planning a sequel?

    Benghazi II: The Final Humiliation

  17. Truesoldier__ on December 12th, 2012 9:26 pm

    No kidding, but I doubt it will be subtiltiled "The Final Humilation" as we are stuck with P'BO for 4 more years (and we know the GOP doesnt have the stones to do anything to stop him). More likely title

    Benghazi II: The Road to Damascuss

    On a more serious note, I saw today the cover of the Army Times has a story about new deployments for the Army. They are looking to start focusing on the Pacific with deployments to New Zeland and Australia (and no this is not an Onion parody story).

  18. Marshall_Will on December 12th, 2012 9:30 pm

    Must say, as jaded as I am, I've never heard that one! My debauchery ( I've labored a lifetime toward ) is now complete!

    What's always ground bubble bloggers is TPTB always worked off the broad assumption that "These CONSUMERS -got- their $'s out of the deal! What do you think drove all those good years while Boosh was in office?? All those home equity loans that wound up getting Harley's and ahem, elective surgery. So it's not like 'they' didn't get anything out of the deal!?"

    And that's been the attitude from Day 1. We were being treated 'collectively" when many of us have done nothing but made the payments or paid the damned house OFF. Again, 80% of the loan damage came from (20) zip codes. Primarily in BLUE States…

  19. Marshall_Will on December 12th, 2012 9:58 pm

    I know this game. I've played it well. When you're a stockbroker at a firm and you're on a hot streak, everyone follows you around the office, wanting to know "What's his SECRET?"

    So they're all coat tailing off you, what you drive, what you eat. Is he using a website or research firm I don't know about? It starts to freak you out so you show up early/late on random days. Trade in your practical car for something, exotic. Tell people you're thinking about a divorce, quitting, going back to school!

    Anything to take the focus of what you're DOING and on superfluous distractions that won't get your competitors anywhere! O'Drama's leading from behind, along-side whatever, is about as indicative of his intentions as "finding the other teams playbook by chance".

  20. jeffythequick on December 13th, 2012 1:19 am

    When/if the conservatives ever take over again, we'll get the blame.

    This is like some 17 year olds dumping a septic pump truck all over a mansion, and when the adults get home, they complain about the stench.

    I fear this will take a long time, and/or a world war to clean up, except someone will have to rescue us, not us rescuing the world.

  21. Marshall_Will on December 13th, 2012 3:03 am

    Did I hear that rumor right? Trading buddy said the Icelanders just overthrew their government! Nothing to corroborate just yet but if any can flesh that out..? After the way their bankers/gov. f'd them over, all I can say if it's true..,

    "YES WE CAN..!" ( too? )

  22. SignPainterGuy on December 13th, 2012 3:58 am

    I looked around, but all I found was that LiLo`s probation has been revoked, faces 8 months in jail ! She just WILL NOT behave herself !
    ;-)

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