There You Go Again- $600 Billion More in Fed Purchases?

The Fed is signaling in many ways that it plans to start a new program of printing more  money soon (Quantitative Easing 3 although it should really be QE-4 because of Operation Twist). By using the new money to buy bonds, they will get the new money into government hands if they buy new bonds, or private hands if they buy existing bonds. The Fed already owns more US government debt (bought with newly printed money) than all the foreign owners like China and Japan combined. It’s so convenient for the government to be able to sell bonds to itself using money newly printed for the purpose.

In the article below, the new president of the San Francisco Fed, John Williams, says that a QE-3 should be open-ended, no target amount of money stated in advance. This would eliminate the now embarrassing QE 1-2-3 sequence and avoid the necessity of eventually having to announce QE–10, QE–100 and so on. There is little doubt that the Fed will eventually get to the equivalent of QE–10 if not higher.

John Williams is a PHd economist who has headed research at the S.F. Fed. His appointment continues the now well established trend of turning the nation’s money over to the care of academics with no experience outside the academy. Given his training, he knows perfectly well that there is no evidence any of the prior quantitative easings/money printing exercises  have worked. If he were honest, he would also admit there is little reason to think they should work. This is all faith-based, and the advanced economic degree is just used to obscure that.

Click here the article.


Hunter Lewis

About Hunter Lewis

Hunter Lewis is co-founder of AgainstCronyCapitalism.org. He is co-founder and former CEO of global investment firm Cambridge Associates, LLC and author of 9 books on moral philosophy, psychology, and economics, including the widely acclaimed Are the Rich Necessary? (“Highly provocative and highly pleasurable.”—New York Times) He has contributed to the New York Times, the Times of London, the Washing­ton Post, and the Atlantic Monthly, as well as numerous websites such as Breitbart.com, Forbes.com, Fox.com, RealClearMarkets.com, and Townhall.com. His most recent books are Crony Capitalism in America: 2008–2012, Free Prices Now! Fixing the Economy by Abolishing the Fed, and Where Keynes Went Wrong: And Why Governments Keep Creating Inflation, Bubbles, and Busts. He has served on boards and committees of fifteen leading not-for-profit organizations, including environmental, teaching, research, and cultural and global development organizations, as well as the World Bank.

8 comments
Peter McGuire
Peter McGuire

Goverment spending has never helped the economy. TARP didn't help and neither did the stimulus. Less spending by the goverment and lower taxes is the only thing that will help. Shrink the size of the federal goverment enact a fair or flat tax and quit spending money you don't have.

Elma Mabry
Elma Mabry

Harry R. Vonzel, Try the word shore. Your ignorance is showing in more than one way. When the Fed prints more money, the money you have is worth less.

Dan Kern
Dan Kern

Harry - Apparently you believe that the continuing printing of fiat currency is a GOOD thing? Perhaps it is YOU who needs education about the effect of printing phony money and continuing to monetize our own debt. No country has ever survived that combination.

Harry R Vonzel
Harry R Vonzel

Far to many people do not understand economics or the GDP... government spending sures up an ailing economy...always has and always will.... The UK has sured up their economy and Europe is doing the same... bot stating "they will do whatever it takes" to sure up their economies and jobs! Norquist ...get the He$$ out of our house!

Aidan Haggerty
Aidan Haggerty

There's too many chiefs and not enough lower ranks in the Fed.

SeniorD
SeniorD

Losing a good paying job and replacing it with a “summer job” is still a job on all Gov't. charts, but it is quite different for the economy, which is why I believe that the US is in TWICE as much trouble as the Gov’t. stats seem to say… Until the Fed MAKES the Big Banks lower mortgages rates so Seniors (who have no jobs) and those with good mortgage payment histories can all refinance at lower rates, our financial situation will continue to get worse. The Fed can either do this by asking the Big Banks to loosen their too strict requirements or simply set up a national lending mechanism to do it and under cut the Big Banks… Until the Big Banks are forced to “Do Business” they will just continue to enjoy almost free money to pay with and invest it GROWING bigger, what incentive do they have to CHANGE?

Bart Smith
Bart Smith

dont forget the 12 trillion thats not paid for and no one knows where the moneys going to come from

SeniorD
SeniorD

The reason that most people cannot now refinance their mortgages is that the Banks are being too restrictive in who can qualify for any type of home loan or home equity loan! Most Seniors now “do not qualify” since they have no “job” income and that is the most important criteria for loan approval now. I think of it as "Senior Discrimination". The Big Banks don’t want to end this UNFAIR PRACTICE, since they are getting free money from the Fed and don't want that to stop, ever! If The Banks were forced to make loans at 1% above the rate that they were borrowing money from the Fed at, then almost everyone would then be able to refinance their mortgages and we would be “out” of this home loan ME$$, because then regular folks and seniors would have enough money to fix up and or make their home more energy efficient, which would provide much need jobs in the construction trades and that would lead to yet more job "spinoffs" as our economy rebounded… Why should the Big Banks be able to borrow for almost nothing while charging their customer 4% or more? This is a Fed enabled Financial RIP-OFF…