Saying that the recession continues to deepen, the U.S. Federal Reserve announced Wednesday that it would pump an extra $1 trillion into the economy by buying mortgage-backed securities and long-term Treasury issues.
"Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending," the Fed said, adding that it would "employ all available tools to promote economic recovery and to preserve price stability."
As expected, the Fed kept its benchmark interest rate virtually at zero. But in a surprise, it drastically increased the amount of money it will create out of thin air to thaw out the still-frozen credit markets that have cramped lending to consumers and businesses alike.
"out of thin air" sounds suspiciously like ...FREE LUNCHI don't think so.
Can confidence be manufactured out of thin air?
One trillion.... and 300,000,000 americans. Gee, let's see, isn't that about $3,300/person. Avg family with 2 kids. So send $12,000 per family.
Every home address, every apartment.
Feel more confident now?
What will we do? Pay some bills, put it in the back until WE are ROCK SOLID CERTAIN things are getting better, or against losing our livings? Then it just ends up in the banks anyway, as the same multiplier that the Fed wants to send right to them. Except we feel better.
So if you want to create inflationary pressures, and/or increase taxes based on interest with magic money go all the way populist and have the treasury just write checks to the folks.
Sounds stupid right? You think their plan is less stupid?
"Listen they are all sitting around with theories going ..'Well we have to do SOMETHING'.Maybe that's even right.
But maybe we should stop, think, and not react, but measure what we are doing so far..because so far all our rush has done is things like pump money into a company who insured mortgage backed risk with other banks and national treasuries which our govt then panicked about stiffing if that company (AIG) went belly up because home values fell, and the policies had to be paid - so instead they STUCK ALL OF US, and now are trying to distract us from that with a stupid $160 mil in bonuses, talking about other stupidities like unconstitutional bills of attainder, in case we might stop and think about WHAT THEY REALLY DID.
Value the debt to other nations and banks more than they did our money.