Re: Fed again takes steps to boost market liquidity

On Mar 13, 9:14 am, Rita <R...@xxxxxxxxxxx> wrote:
On Thu, 13 Mar 2008 12:38:52 GMT, Rumpelstiltskin



<PleaseDoNotReplyByEm...@xxxxxxxxxxx> wrote:
On Thu, 13 Mar 2008 07:21:56 -0500, Gary <n...@xxxxxxx> wrote:

On Wed, 12 Mar 2008 19:57:50 -0700, Rita <R...@xxxxxxxxxxx> wrote:

On Wed, 12 Mar 2008 17:42:59 -0700 (PDT), mg <mgkel...@xxxxxxxxx>
wrote:

I think I read somewhere that the Fed's rescue attempts were now up to
about 3/4 of a trillion dollars. It's not hard to imagine that they'll
go way beyond that. A few trillion for the banks, a few trillion for
Iraq and the oil companies, a few trillion for rich tax payers. After
awhile it all starts to add up and in the meantime people that work
for a living and people who are retired are seeing their expenses go
up and their income stay the same or go down.

May I ask a dumb question. Where does the money come from the Fed
makes available? What if the borrowers default? In other words,
how does this work. Do they get actual money or credit on the Fed?

They have a printing press in Washington that they laughingly refer to
as the "US Treasury". You say the Forger in Chief needs a
trillion dollars ? Just a second !

The serious part is that when Bernanke runs off an extra trillion,
it devalues the People's money by that much. We are now not only
faced with inflation -- but watered down money. Oh, well -- the
alternative was to tax the hedge fund managers and war profiteers --
and we can't have that. How would they pay for McCain's
presidency ?

I'm so happy that some people understand this, even though
most still don't, or at least they behave and think day-to-day as
though they didn't.

I would still like to have my questions answered in some detail.
Please? Was the money just created out of thin air? Was an
extra trillion that didn't exist before suddenly produced?
I want to know the mechanics.

I'm not sure exactly how this works, but I think they simply issue
government bonds in exchange for the phony collateral. So, I'm
guessing what happens is that the Fed borrows the money in the form of
printing bonds in order to loan it to the banks, then if the banks
default it becomes a permanent part of the national debt. I believe
that the huge national debt combined with the low interest rates (and
the trade deficit) are probably what is causing the dollar to drop and
inflation to rise. So, the Fed's actions probably just add to the
problem from the point of view of the consumer.


.

Relevant Pages

  • Re: Fed again takes steps to boost market liquidity
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    ... about 3/4 of a trillion dollars. ... Do they get actual money or credit on the Fed? ... They have a printing press in Washington that they laughingly refer to ...
    (soc.retirement)
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