Actually Fed's buying more than 85 billion / month: "According to data compiled by Bloomberg, the Fed’s balance sheet has been increasing at an average rate of $91.9 billion each month during 2013 – yes, more than the $85 billion headline number. While the Fed has been buying assets at a rate of $85 billion per month, they have also been further adding to their purchases by investing earned interest and proceeds from maturing bonds. The largest single monthly addition to their balance sheet in 2013 was during the month of April when the Federal Reserve added $114.7 billion of assets, almost $30 billion more than the stated purchases of $85 billion. These monthly additions vary given the timing of maturing bonds but the accommodation provided by the Fed is much larger than the headlines suggest." It must some day end, but perhaps not while Bernnake is commanding the ship of state. He could be reappointed, if willing, but I think too smart to serve again and be there when the ship sinks. For a year or so, I have been saying the Fed has a tiger by the tail, with lots of risk to the economy if it lets go. Lets hope that with slow and slight incremental relaxations of that grip, the tiger will not notice enough to quickly turn and eat years (decades?) of economic progress. Doing the release too slowly as the debt grows has great risk too - the Bond Vigilantes are already saddled up and ready to ride.
OK, where is the Bloomberg article? Where does Bloomberg say the Fed is purchasing more debt than it discloses? The Fed's earnings expands it balance sheet too. As it purchases more debt, it earns more interest. But the monetary effects are exactly the opposite of Fed debt purchases. Fed debt purchases put money into the economy, earned interest removes money from the economy. Yet both expand the Fed's balance sheet. http://www.bloomberg.com/news/2013-09-18/fed-refrains-from-qe-taper-keeps-bond-buying-at-85-bln.html
Google search on words like: "Fed adds 114.7 billion" turns up many hits, most with exact same wording as in my post. Looking at their dates, etc. leads me believe this is the original source: http://www.sprottgroup.com/thoughts/articles/a-taper-in-a-teapot/ I quoted from. Please note neither they nor I said they were quoting Bloomberg - only "according to data compiled by Bloomberg" ... Your point is nearly correct,* the Fed was adding an average of $91,9 billion per month to its balance sheet but most if not all that 91.9-85 = 6.9 billion was interest payments "removed,"* not added, to the economy. (Slightly canceling some of the QE stimulus.) At least the fed will not take loses on the interest paid it when it tries to lower balance sheet - it will on many of the private bonds/mortgages (once called "toxic trash"). I think the fed's balance sheet has assets = 3.7 Trillion (or 3700 billion) and they are earning 6.9x12= 82.8 billion per year or 2.2% rate of return on their capital, but will have larger loses on the weak or defaulting mortgage bonds when they try to sell of hold to maturity. * Actually little of it is removed from the economy as most of the Fed's assets are US Treasury bonds - so their interest payment are not removed from the economy, but freshly "printed" thin air money.
No, my statement was entirely correct. If you want to know how much money the Fed is adding the economy you use the correct measurement which is the Fed money supply numbers - not the Fed balance sheet. It helps to know what you are talking about.
Yes it does; The Fed is not the only source of "thin-air" money creation, in this interrelated global economy: Please Register or Log in to view the hidden image! ~ 10 TRILLION dollars worth of thin-air money produced in five years - 2 Trillion per year rate, which is accelerating with CURRENT damage to the less developed economies (China not included) and FUTURE damage to the economies producing the thin air money. Mainly via collapse of their currencies, ( soaring real assets prices when expressed in terms of those currencies). - I. e. near "run-away- inflation with destruction of the purchasing power of saved money. The Fed and other central banks (again China excluded) have a tiger by the tail - their real economies are far below their potential. Never before in history have such a small fraction of their labor forces been actually working - productive, and many of those working are trapped in low pay, dead-end Big Mac jobs or only work part time. The government revenues have NEVER been so large, but are burdened by largest ever welfare costs (1 in every 5 Americans on food stamps, disability or other public assistance with Social Security payout rapidly growing. >10,000 baby boomers retire each day!) - Much of the corporate taxes paid are on incomes earned in Asia, (especially China), with more solid economies and (except for China), much lower average age populations (For example, more than half of all Indonesians are less than 30 Years old!) with rapidly growing real salaries (China no exception here - real purchasing power growing by low double digits, not shrinking as in the US and EU. (If one only looks at short term trends, not over the recent decade, one can argue that in last year, 2012, the purchasing power of US salaries was flat.) US and EU can only not forever consume more than they produce, with China, et. al. financing the difference. The day of reckoning is coming and when "paying the piper for the lovely dance" starts, and the collapse will be sudden, if history is a guide. I'm sticking with my eight year old predictions that day of reckoning is on or before Halloween 2014, with less than 7% margin of error (+ or -7 months on the 8 years, 96 months old prediction.) China is rapidly reducing the need to sell to US (down from 42% to 16% of its exports in only five years) as it grows it rapidly growing trade with others and gets, more slowly than the CCP would like, to be an economy based on the domestic buying, not exports. When China is ready, it will back its RMB bonds with gold and pay a higher interest on them than US can afford. China will buy more than 1000 metric tons of gold this year and is world's largest producer of gold (at least 40% more than #2 by estimates of others, but true production is a very high state secrete.) China wants do as US has done for decades - pay for cost of imports over value exported (the trade deficit) with printed paper, that all the world's central banks and oil exporters will prefer to dollars. (Higher, interest + gold back Chinese bonds). As I have posted for many years, the day is now soon coming when China will tell US and EU: Go to Hell. We don't need to sell to you so no longer lend the money for US & EU to buy with, or finance your deficits. (Our Chinese factories are running at capacity just to supply those trading partners who can buy Chinese goods without loans and the rapidly expanding Chinese domestic market.) The Fed (and other major central banks) have a tiger by its EQ tail. Just the hint, in May.June 2012, that the trapper would end in September 2013 nearly doubled the US 10 year bond interest rate. Significant actual taper will triple rates making paying the interest of the by then 17 trillion dollar US deficit nearly impossible, except with greatly increased rate of thin-air money "printing." I.e. QE3 is accurately called "QEinfinity."
You know, I have never had any vender refuse to take my “thin air” money. I have never had an employee refuse to take my “thin air” money. Ah yes China just cannot wait to take their economy back into the Stone Age. The market always over reacts…nothing new there. The market misread the Fed. It would be stupid to end QE at this time. The economic data does not warrant ending the QE now – especially considering the Republican funding and default drama now going on in Washington.
Why do you think world's largest creditor nation is headed for the stone age? This is where rich China is going. - It looks more like a high tech future than the stone age to me.Please Register or Log in to view the hidden image! World's most beautiful and efficient airport (Linear design has internal shuttle trains to move passengers and their bags quickly to their gate from parking lot) was built for the Chinese Olympics in less time than England spent just in public hearings for a minor expansion of Heathrow Airport! The main section of the airport is slightly more than a kilometer long. Please Register or Log in to view the hidden image! This energy efficient train goes faster than all prop-type, air planes > 500Km /hour. China's world's fastest and largest network of rail is expected to move 10.1 million Chinese on 1 October 2013 for the "moon" week holiday peak travel. Please Register or Log in to view the hidden image! For scale, note the large earth mover at edge, bottom center. Eastern and central parts will be operational in 2014 after more than a decade of intense construction and testing. The Nile flow is just over 80 cubic kilometers per year. (reference at: http://www.google.com/#fp=b1848aaff8811878&q=annual flow of nile river) and a cubic Km is 1000^3 cubic meters, or Nile moves 80 billion cubic meters vs. China is moving 44.8 billion cubic meters. I.e. the Nile moves less than twice as much water as China will but the Nile moves its water slightly more than twice a far. No other man-made water project come even close (not even within 3%) to what China has done to improve the economic health of the nation as world moves into the era of water shortages! China's "half Nile" does a trick nature's Nile can't do: It delivers water to the Beijing area 45 meters higher than its source! (2.8 billion kWh/year pumping energy) China started funding studies for this world's largest water project in 1950s! Lake Powell and Lake Mead supply much of the water needed by S. W. USA and they are going dry. The US does not have an organizational structure to solve its largest water problem, with Congress mainly interested in the next election and not funding multi-decade-long water projects with first benefits long after they have left office. With cost of ~10% of China's 62 billion dollars, US could transfer water from the Great Lakes, mainly via existing rivers, to save the South West from disaster, but that will not be done by Congress. I.e. without running water in their homes, many now living in the US's SW will be in the stone age, but not China - It is just a question of when, not if, as Congress can't even agree on immediate needs, never on funding a critical project like assuring the SW USA has water to drink as completing that project would take at least 20 years. Scripps Institution of Oceanography / University of California, San Diego says: "... There is a 50 percent chance Lake Mead, a key source of water for millions of people in the southwestern United States, will be dry by 2021 if climate changes as expected and future water usage is not curtailed, ... Without Lake Mead and neighboring Lake Powell, the Colorado River system has no buffer to sustain the population of the Southwest through an unusually dry year, or worse, a sustained drought. In such an event, water deliveries would become highly unstable and variable, ..." From: http://scrippsnews.ucsd.edu/Releases/?releaseID=876
I don't and I didn't say they were. But if they were to do what you claim they are doing, they would be taking their nation's economy back to the Stone Age.
I asked why you say that, not for a second unsupported assertion. The value of the RMB is INCREASINGS wrt the dollar, now that it is no longer pegged to the dollar: Please Register or Log in to view the hidden image! A few years before 2009, it took >8 RMB to buy a dollar now only 1/0.162 = 6.17 will. SUMMARY: you have no support for your wild claims! Sept 21 edit with better, only day old, graph and others predictions: Please Register or Log in to view the hidden image! US consumption rate as percent of GDP or income, almost sure, is near 100% as using debt / credit cards, etc. allows, at least for now, Americans to live beyond their means.
LOL Now that we're in the 5th year of the "Recovery" (for the rich) from the "Great Recession" and all those 5 year old "Green Shoots" the Fed has planted have now grown into strong oak forests of productive investment.... Is that the case Joe|? FACT: The Federal Reserve Chairman is clueless. EVIDENCE: He had absolutely NO IDEA that in the year 2013 he'd still be pumping nearly $100 billion* a year into this sick economy with no end in sight. We are the rodents in the Fed 'Chairman's behaviour psychologist experiment running in real-time. Yeah, let's trick Citizens into thinking they 'feel' wealthier and willing to take on more debt. You know, because tricking people into spending money they don't actually have to buy shit made in China they don't need is wonderful for the long term economy. FACT: Without free-markets people are left investing in projects blindly - which is why most businesses aren't bothering to invest in anything (outside of the police State apparatus). Joe, your blind faith in State Priest Ben is fanatical. Yes, thank you for our New Economy where the rich get richer and the poor are left dependant on the State. FACT: Enablers like Ben can't imagine life without the heroin addict, and the addict wouldn't have it any other way either. We'll just have to wait until the patient dies a long slow agonizing decades-long death. BillyT, IMO your prediction wouldn't be allowed to occur. The Progressive State will frog-march off the poor to die in WWIII before they allow the system they control to collapse. Communism didn't collapse the Chinese State, Cuba, North Korea, etc.... the fact is people will revert to living like basic animals first. Just visit inner city State run public housing to see the depths to which people will live. From a Progressives POV, those people are a nice crop of cannon fodder ripe for the picking. * edit by Billy T: I think you mean "slightly more than 1 Trillion" as 85 billion times 12 months = 1.02 trillion. While here, I note that history tends to indicate collapse occurs with surprising speed, not "a long slow agonizing decades-long death" and I expect no exception for the US. Sort of like a theater fire - all rush for the exit door and make the problem worse as they dump their bonds, etc.
It isn’t a matter of planting trees. Ben Bernanke is not a horticulturist. He is a central banker. Well for starters, the economy isn’t sick. It is a growing economy. It isn’t growing as fast as we would like for the following reasons, reasons that have been repeatedly made known to you, Europe didn’t follow the US lead until just recently and as a result has been in a prolonged recession. Additionally, the US economy has been plagued and continues to be plagued by congressional fiscal ineptitude and profligacy. Threatening to shut down the government and run it into default as a political strategy doesn’t foment the confidence needed to accelerate growth. Unfortunately the only functional and competent economic policies have come from the Fed since Republicans took control of the House in 2010. And finally, the only one doing any tricking is you and folks like you. Bernanke is not deceiving or tricking anyone. People are feeling wealthier, because they are wealthier…one of those facts you like to ignore. So your supposed “fact” is just more nonsense. Ah, no. We have free markets. Just because that fact does not fit nicely into your ideology it doesn’t mean it ain’t so. I don’t have blind faith. I have facts, facts that you don’t like because they do not support your notions or ideology. LOL, a declaration, an opinion is not a fact. And your opinion here is not supported with evidence or reason.
Striking it Richer: The Evolution of Top Incomes in the United States Don't let FACTS get in the way of your blind faith Joe. AND unless you're going to claim UC Berkeley is a hot bed of radial conservationism, then you're claim we're all being manipulated by the far-right is baseless. Not that it'd matter, as data is irrespective of WHO gathers it, this data is actually from a Liberal (American Liberal) State/Public Research University. The FACT is it's been half a decade and the idiot psychologists who run the Federal Reserve are as clueless what to do today, as they were 5 years ago. FACT: Ben's models were USELESS, he couldn't even predict a few months into the future when he claimed he's start to 'tapper' the QE and had since started backtracking into QE infinity. This is NOT science Joe. It's ad hoc modelling and post-hoc useless explanation. On the one side we have sociopathic behaviour psychologists (like Bernanke) who think tricking people into spending money they don't have will 'turn the economy around' and on the other side we have psychopaths like Krugman who think WWIII / bombing and murdering women and children will 'turn the economy around'.
Yes facts are facts. And the fact is the wealthiest are getting wealthier…giving them more absolute power as you have and continue to advocate will not change that. In fact it will only make it worse. That is why I find your argument so disingenuous. Two, wealth inequality, income inequalities have nothing to do with the Federal Reserve. Those economic policies take place in congress. Shifting of the tax burden which began some 30 years ago from the wealthy and onto the backs of the middle class is in no small part one of the reasons for income and wealth inequality. Ah, no. Just because your ideology needs to discount and deny empiricism it does not follow scientific evidence does follow that economists are psychologists or that the Federal Reserve is clueless. The facts are, economists are not psychologists. They are economists. The facts are their analysis and methods have stood the test of time and the real world. Scientists cannot explain or predict many things because of exogenous and unknown information. That doesn’t mean they are not scientists. That doesn’t mean they cannot tell you if you walk off a cliff you are going to get hurt. Complicated systems need adjustments because of exogenous information. You cannot program a car to New York to LA without allowing for exogenous circumstances. And so it is with the economic policy. Ben cannot predict what congress will or will not do. But that doesn’t mean his economic models are useless. And this too has been explained to you many times over the years. But the fact is you need to deny and ignore this reality in order to continue to cling to your ideology. Ah no. On one hand we have a bunch of demagogic idiots and fools who don’t understand economics, business, empiricism or much else acting like they know something and attempting to rewrite reality in order to make sense of their ideology. And then we have Nobel Prize winning economists like Krugman who have spent their lives studying and quantifying data and using scientific method to develop hypothesis, theory and laws. People like Krugman don’t need to rewrite the dictionary. They don’t need to misrepresent people and facts. They don’t need to call economists psychologists. They don’t need to deny science. They don’t need to deny reality. And they don’t need to voice unsupported opinions and call them facts.
Throwing caution to the wind, as I am prone to do, I'll step in between this interesting verbal gun fight, just to note that it is too early, probably by a decade or so, to know if Ben "did good or evil." We won't be able to answer that, imho, until the thin air money produced in vastly more volume than commerce requires and now sitting out side of the real economy is no longer hanging over it as a potentially destructive threat. As I have noted for at least a year, Ben has a tiger by its "QE tail" and what happens when that grip is released is yet to be seen.
Yes, that's right Joe and the bottom 99% ARE getting poorer. And get this - this is what YOU support. Do you get that? This is what YOU support. Not some hypothetical, but actual polices. So, you can continue to puke up this diarrhoea diatribe about how we're all being fooled by the right/GOP - but the FACT is YOU support the policies that are making the richest 1% very much richer and the bottom 99% poorer. Agreed? Good. You can hypothesize all day long that if we hadn't bailed out the TBTF / richest 1% then we'd all be pointing at fire and uttering Ugg Fire/ the "World would have Collapsed". But this is just Joe's supposition. It's what Joe "thinks". Joe thinks this because his TV set told him to think it. Joe has no facts, no evidence, only 5 years of propaganda, faith in the Central Bank Chairman, Love of the State and his personal conviction. It's called BLIND FAITH Joe. The FACT is the US media (owned by the richest 1%) made up the words Too Big To Fail (literally, they just made this bullshit up) and then they fed this word soup to you - and you ate it, and continue to believed them. Even as the evidence that the top 1% are taking the bottom 99% to the cleaners is presented to you, year after year after year. There you are buying into their bullshit. They offered you NO evidence Joe - they couldn't. They offered you NO proof Joe, they can't. We are LIVING their experiment in real-time. So, they simply told you what you were to believe and you lined up with the rest of the faithful and sang Hymns to the Central Bank right along with the rest of the Sheeple CONgregation. The truth is THEY wanted bailed out. AND bailed out they are - and some. The FACT is NOTHING is TBTF. We fought the Revolutionary War, the Civil War, World Wars - and guess what, the world did and does NOT stop turning. If we hadn't invented TBTF the world would NOT have collapsed. But the richest 1% would be a lot poorer and the bottom 99% a lot richer. So, when you look out your palace window at the poor getting poorer day by day - you should know you supported that and continue to support that.
Joe's logic is we're 5 years into the "recovery" and THAT'S why the Fed can't tapper - ever. Please Register or Log in to view the hidden image! The REAL reason why the Federal Reserve Chairman decided he's not going to tapper is because he swallowed a porcupine and while it went down easy enough, it ain't coming back up and out. Trillions of dollars in securities are easy enough to buy, to sell them is a different story. Fat Boy Ben must be looking out his palace window at the poor unwashed UNDERemployed masses and wondering if it'll be his castle they decide to burn to the ground (with him in it). He must be thinking about the trillions and trillions we have borrowed from the Asians to give away FREE Obama-phones and FREE ObamaCare, oh and those FREE roads we all love to drive on and how it's impossible to pay those loans back - now matter how many children we try to sell off. Nope, we're too busy working to pay for all our FREE gooberment to afford to have and raise children. There's simply not enough future labor left to sell off to the Chinese. Thus, the Fed will keep monetizing. In short, Fat Boy Ben is scared shittless. You can hear it in his voice as it cracks. He sound exactly like what he is - Clueless. Ben has never worked in the 'real' economy. He's played Scientist in University mathematical simulations where variables like 'feel good about my self'/wealth-effect are assumed to be as good as gravity or atomic mass. Not even the NSA can help him now. Ben is going to have to come face-to-face with the FACT that central planning (particularly by precious bureaucratic princesses) does not and can not work with anything more complex than a medieval agrarian village. Please Register or Log in to view the hidden image!
Yeah, and the "Great Recession" was ended by the "Great Federal Chairman" and if we ignore the FACT the top 1% are making all the gains while the bottom 99% are taken to the cleaners, then Joe's view of the world from his palace window is quite nice. So Joe? Are we still in the 'Recovery' from the Bankers robbing us and us bailing them out, or is that just over the horizon?
