After rate cuts: The Fed's new ball game (begun to print money to finance its liquidity programs)

[sabra]

Source: CNN

With rate cuts doing little to help boost the economy, the Fed has begun to print money to finance its liquidity programs. But that could spell disaster down the road.


NEW YORK (CNNMoney.com) -- After what is likely to be the last in a long series of interest rate cuts Tuesday, the Federal Reserve is expected to continue its new, perhaps more effective monetary strategy: printing lots of money.

The Fed traditionally uses its rate-cutting tool to encourage lending and boost the economy. But despite a staggering 4.25 percentage points of cuts since September 2007, the economy has not improved - in fact, it has gotten worse, drifting in to a recession last December.

Economists expect the Fed to produce one more cut to its benchmark funds rate at the conclusion of its Federal Open Market Committee meeting Tuesday, trimming the rate to 0.5%, the lowest level on record. Whether one last rate cut will help stimulate economic growth remains to be seen.

At any rate, the Fed will likely continue to use its new favorite tool, quantitative easing, "Fed-speak" for pouring new money into the economy.

Read more: http://money.cnn.com/2008/12/15/news/economy/credit_market/index.htm

[DJ13]

1. Nothing will help until our government (& the Fed) get the balls

... to publicly confront our finance industry like the Europeans are doing about accepting bailout money tied to increasing their lending but hording it instead.

Unlike the EU we seem gutless when it comes to the big moneyed banking industry.

[tama]

9. Nothing will help

until they get balls with chains tied to their ankles.

My best advice for the not so gutless is to start a mass movement spreading WANTED posters of all of these criminals and making citizen's arrests. And if the courts refuse to put them in jail, I won't mind if street courts decide to lynch them.

[pattmarty]

2. WELL, hello Weimar Republic, where we can all use our wheelbarrows to buy bread.

[Canuckistanian]

4. I'm investing in wheelbarrows

Just in case....

[pattmarty]

11. See, the entrepreneurial spirit is roaring back!!!

[dabenpb]

5. I am glad I got ahead

of the curve then and got a Weimaraner. :)

[CatholicEdHead]

3. How soon before we are the new Zimbabwe?

[Mark D.]

6. I Have Said This Before

Expecting the Federal Reserve to fix the problem is like sending Godzilla to fix power lines. As Dennis Kucinich angrily pointed out in the debates before the bailout, we have to get rid of this debt-based fiat currency system. We have to nationalize our currency, issue it backed by only our government as Lincoln did (and died for doing). Beating back the bankers will allow us to pay off our debt entirely as Andrew Jackson, a Democrat, was the last president to do (and he almost got killed for it, the failed assassin admitted he was sent by European (Rothschild, likely) bankers. JP

Morgan Chase (ie. the House of Morgan and Rockefeller combined, the US version of Rothschild) is once again the largest bank in America. Not even counting Morgan Stanley, the powerhouse investment arm that speculated us into 4-5 dollar a gallon gas recently. The Morgan hedge funds caused most of the sub prime collapse that caused most of our economic distress. It allowed them to absorb smaller banks and gain power as it did in the Great Depression Morgan helped create, to help create the Federal Reserve he wanted with the help of Warburg & Schiff. To help them reap the profits of two world wars they helped broker or finance.

Just follow the money. The top 3 banks in America control 1/3 of all banking money in America, and it's more than the top 5 did just a year ago. We are on the way to 8.5 trillion total new debt thanks to the Federal Reserve 'loans' it won't disclose to who (ie. likely Morgan and other elite banks) that WE have to payback. WE lend bankers money (lend, ha ha, you don't lend someone something they keep for free and YOU have to pay back) so they can MAYBE lend us money for businesses and consumers. The more money is consolidated the more powerful these institutions for the fall of just one could collapse the economy.

They hold us hostage, they are the terrorists, this is blackmail. The only solution is to throw them more money, they say, or else. The 700 billion was a red herring for over 10 times more being given to them. Well over 300 times less is being asked for now to help protect millions of blue collar jobs in the auto and related industries, and we need months of hearings, a reduction in the amount, and GOP stonewalling.

We have useless hearings to pass 700 billion, and we have almost 8 trillion total expected lending with not a hearing, or even being told where it's going, by a private bank (The Fed) that tells us it is above having to tell us these things (because, it, along with Morgan/Rockefeller, really runs America). When will this madness end? They own the media that feeds us a steady stream of 'Sports' and 'Reality TV' and pollutes our kids with smut and violent video games. Doom high score. Mafia Wars on My Space.

Near-alcoholic / diabetic bottlehead beer-gut macho men who drive SUVs to illustrate their lack of size somewhere else who can tell you the score of dozens of college football games, and have fantasy football for when the season is over who can't find Iraq or even the USA probably on a map. Girls who go from texting-while-driving (or doing anything) Miley Cirus clones to vapid Paris Hiltons who can't even cook in a microwave, but can get 300 different colors and sparkles done on their nails.

Dozens of people who say the solution for the middle east troubles is 'just nuke it'. Who voted for McCain because Palin was hot. Who preferred Bush over boring Gore because he would be better to have a beer with. Who say Obama is a (Muslim, Christian-black-activist (at the same time! wow), Kenyan, British, Terrorist, Arab, Gay, what's next, Raelian? Martian?) to call him anything but the word they want to use, but can't because of 'political correctness' they hate. The newest excuse to justify bigotry. I digress.

This is what we are up against and put the above group of compliant Faux Snooze lovin' sheeple together and you get a majority of the US population. And they wanna CUT education. Great! Until most of them learn what's really going on, we won't have the informed majority as seen in Europe. If France put through an overtime law like Bush scammed us with that favored corporations and screwed blue collar workers who put in extra hours there would be a protest so big it would shut down the nation's business, and the law would be repealed. It was met with barely a whimper here.

You'll hear more stand up jokes about Clinton's adultery than proper discussion about hundreds if not thousands of 'small steps' in the wrong direction Bush took that 20 Obama administrations probably couldn't get to roll back all of. All empowering the elite, at the expense of the poor and the many in the middle class becoming poor. Have big announcements of the Fed doing this and that, it's moot. None of THEM are really sweating. They have trillions locked up. Warren Buffet may be the richest individual, but Morgan/Rockefeller can shift trillions around as can the Fed like its nothing.

The estimated 100-500 trillion dollar stockpile of looted loot Rothschild hoards, thanks to the IMF robbery - and history of war profiteering, and bookkeeping for the Holy Roman Empire / Crusades plunder, could eliminate all debt worldwide, shelter and feed and educate everyone in the third world 20 times over. But many have no clue on this. It's not taught in school. The big three (Rothschild, Morgan, Rockefeller) have done more damage to the world than any three people in history, including the pawns they financed in Hitler, Stalin, and Mao.

To learn that war is for profit, and this has happened since the French Revolution. To learn that usury is a formula for perpetual debt and consolidation of currency. That most of the 'regime changes' 'revolutions' and assassinations have been committed by those who work with or for the bankers or the entities that do government bidding on their behalf, from the CIA to to Mossad. To understand that wedge issues are how they keep us distracted and infighting vs. forming a united front to demand our rights and benefit humanity.

[Esra Star]

14. Well said Mark, thanks for that. nt

[Plucketeer]

15. Well said, Mark

Too bad those who'd understand what you've said (let alone SEE IT) are a tiny minority.

[natrat]

17. wow that was a killer rant- A+

[w4rma]

20. K&R for this post. (nt)

[chimpymustgo]

29. Fantastic post.

[reclinerhead]

31. Wow, thanks!

I'm all fired up now for my morning walk to work!

[happygoluckytoyou]

7. on the bright side... i own no stock... no gold... no cash... just watching the fun

e

[truedelphi]

8. confess to somewhat the same attitude

Our retirement fund was spent on medical needs. Seemed tragic at the time, but we might be one of the few who actually saw their pension being used for soemthing other than lining the Ponzi-scheme fund managers sweet little offshore accounts.

[Hydra]

10. Ironic, isn't it?

I've never appreciated being poor so much in my entire life- I don't have to worry how much is being stolen from me, as I have nothing to steal.

People here busting a gasket trying to save their nest eggs by demanding more money for Bushco...it was surreal.

[Alcibiades]

12. I have no assets and a bundle of debt

Which also describes many others in the US--come to think of it, it also describes the government.

[elfin]

13. Why do they hate Geezers?

We depend on CDs for interest to add to SS and if we are lucky, pensions and IRA.

Once again, time to shop for stocks or bonds that SEEM to be from good companies and pay higher dividends than CDs.

I breathed a sigh of relief when my GMAC bond paid out at maturity, but really miss the %6.6 interest payments.

[natrat]

16. why do i get the feeling the goal of the junta is disaster?

[leftstreet]

18. K&R

[4dsc]

19. Wow, hyperinflation explained.... nt

[Odin2005]

22. Hyperinflation is not the problem, Deflation is.

That's why "Helicopter Ben" was talking about dumping dollars out of hellicopters. The insane fear about hyperinflation is Libertarian BS that has inflected the left because of how those nuts were telling everyone to buy gold.

[4dsc]

28. deflation now, hyperinflation later

Of course we are witnesses deflation now but I'm talking later next year when all those fiat dollars have been unloaded into the economy..

[Odin2005]

30. The anti-fiat currency rhetoic is the Libertarian nonsense I'm talking about

Increasing the money supply is how you stop deflation.

[Odin2005]

21. Good, The Fed sitting there doing nothing was part of the reason the Great Depression got so bad.

I see the "Fed is a evil conspiracy" nuts are moaning, already. :eyes:

[Pale Blue Dot]

25. I've bookmarked this thread.

Let's return one year from now and see who was right; shall we?

[Odin2005]

26. Okie-dokie. n/t

[truedelphi]

36. But the fact of the matter is that what is most important

About having a Plan is that the Plan be a decent and workable plan.

All this supposed BailOut has done is give 8.8 Trillion bucks to the very crooks and thieves that set up this country and the rest of the world for devastating losses.

Watch some of the Issa, and Kucinich YouTubes and hear what they say as they of grill Kashkari.

Then tell me what you think.

Giving the equivalent of $ 24K for every man woman and child in this country to the Wall Street robber barons is not any better than not doing anything - it is far worse. The top banks are buying the littler banks, yet no loans are being made to Main Street. Though Main Street will go down.

Meanwhile the big banks will be able to privatize any utility or institution that is out there - local water districts, local hospitals etc. When you and your family are paying $ 40 bucks a day for basic water needs, let me know how it all worked out for you.

[alcibiades_mystery]

23. For those who spent so many years telling us how Marx was wrong

Please go reread the analysis of money and surplus value in the Grundrisse. Every step of this latest crisis can be explained easily with precisely the descriptive categories set forth there. Dear liberal and capitalist economists: you're wrong.

[readmoreoften]

24. Thank you.

[DixieBlue]

27. This seems incredibly stupid and counterintuitive ...

And is incredibly depressing.

[JohnAB]

32. economy has improved

This innocent word "Trimmer"

Signifies no more than this, What if men were in a boat and one part of the company would weigh it down on one side,

another would make it lean as much to the contrary.

what has been seen with respect to the lack of correction is a economy oversight,

sleep at the wheel I to say, its been seen I would say!

Whether one last rate cut will help stimulate economic growth remains to be seen.

only if

its not used at key points that have a moult-able exchange effect on growth.

at the most basic needs and thats a ideal of a compromise give it too them ,
to use older terms,

give them the Brown seed compromise and they will be on your side.

[Beetwasher]

34. Is That English?

:shrug:

[beyond_the_pale]

33. Erin Burnett (CNBC): The only way to make money is leverage???

I am trying to understand the US banking and investment problem. Yesterday, Erin Burnett was commenting on the "first loss ever" posted by Goldman Sachs. She didn't think they would ever be the giant they once were because the only way they could make money was through leverage and that method is not possible anymore. She said this two times very clearly. In the past few months I've learned that leverage is defined as derivatives, swaps, CDO's also known as the financial weapons of mass destruction.

So, the only way our investors could make money was through imprudent leverage? We are doomed.

[high density]

35. Why are these idiots cutting rates again?

I think we need to get rid of the middle men (i.e. banks) and have the Fed lend directly to the people and businesses, if that is the ultimate goal of this monetary policy. The banks have already shown they do not want to play in this environment. The past year of throwing out more money and offering lower and lower rates has already proven to be ineffective at opening the credit gates at the banks.

[pinniped]

37. I highly doubt this is the first time the printers have been fired up.

This might be the only article in the past 8 years that mentions $$$$ being printed.