Fed Chairman Bernacke announced today that he would add another purchase of US Treasuries bringing the total to nearly $4 trillion. That is nearly double the same amount held by China and Japan and nearly as much as held by ALL foreign countries. The September 2012 report from the Treasury (source below) confirms that both of the two largest holders had $2.285 trillion invested in our "junk".
For years, we have heard that China is buying us lock, stock and barrel and before we know it, we will all have to be speaking Chinese. What a piece of malarkey! We have been sold a bill of goods and for one, Tom is tired of it. The reality is that China has been reducing its purchases over the past year, not greatly but the numbers have continued to fall.
Our government is on a spending binge that can only end the same way a drunken sailor's ends, bankrupt, penniless and in shambles. We cannot tax our way out and spending cuts necessary to achieve our goals would be met with universal protest. Folks, there is no way to solve the problem.
In the current crisis, the "leadership" in Washington will come up with some "fix" either before or after we go over the fiscal cliff. The problem is that it only will put a band-aid on a broken foot. We will continue to face financial problems until there is no longer a way out. Just like the drunk who promises that his ways have changed everything will be fine until he goes into the next bar which means the next budget plan by the government.
We, as a country, are spoiled. Our legislators have lavished generous plans on top of more benefits for years and now it has come time to pay for them and the cupboard is bare. ObamaCare, Medicare, Social Security, welfare, to name just a couple are drowning us. We need a major surgery and are willing only to take an aspirin.
It is time to prepare for the worst that your mind can conceive and then multiply it by ten! Think of the German economy in the 30's, that is where we are heading! It is not if, but when!
Conservative Tom
Here are the sources:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
http://finance.yahoo.com/news/fed-seen-pumping-assets-4-050000764.html
For years, we have heard that China is buying us lock, stock and barrel and before we know it, we will all have to be speaking Chinese. What a piece of malarkey! We have been sold a bill of goods and for one, Tom is tired of it. The reality is that China has been reducing its purchases over the past year, not greatly but the numbers have continued to fall.
Our government is on a spending binge that can only end the same way a drunken sailor's ends, bankrupt, penniless and in shambles. We cannot tax our way out and spending cuts necessary to achieve our goals would be met with universal protest. Folks, there is no way to solve the problem.
In the current crisis, the "leadership" in Washington will come up with some "fix" either before or after we go over the fiscal cliff. The problem is that it only will put a band-aid on a broken foot. We will continue to face financial problems until there is no longer a way out. Just like the drunk who promises that his ways have changed everything will be fine until he goes into the next bar which means the next budget plan by the government.
We, as a country, are spoiled. Our legislators have lavished generous plans on top of more benefits for years and now it has come time to pay for them and the cupboard is bare. ObamaCare, Medicare, Social Security, welfare, to name just a couple are drowning us. We need a major surgery and are willing only to take an aspirin.
It is time to prepare for the worst that your mind can conceive and then multiply it by ten! Think of the German economy in the 30's, that is where we are heading! It is not if, but when!
Conservative Tom
Here are the sources:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
http://finance.yahoo.com/news/fed-seen-pumping-assets-4-050000764.html
Corporate profits hit record highs in the last quarter, and ALL of the growth came from the financial sector, thanks in no small part to QE1, 2, 3. So, now we have QE4, with QE5 whenever Wall Street calls for it…..
ReplyDeletehttp://theeconomiccollapseblog.com/archives/qe4-the-big-wall-street-banks-are-already-complaining-that-qe3-is-not-enough
---David (OWS)
Anytime government tries to run an economy i.e. Russian planning, it has not worked. We should learn that.
ReplyDeleteTom, government does not run the economy. Wall Street runs the government, and uses the government to run the economy. That is what I mean when I tell you that WALL STREET RUNS THE ECONOMY. Wall Street has 4 seats on the Fed committee that sets monetary policy, and they have a revolving door between Goldman Sachs, et. al. and appointments to Sec. of Treasury.
ReplyDeleteI was just reading an article about QE3 and Pimco. As soon as the Fed announced that they would be buying $40 billion a month in mortgage-backed securities with no end in sight, Pimco calculated that there are only around $8 billion in new (i.e., good) mortgage-backed securities generated a month and so the rest of the MBS that the Fed would be buying from Wall Street are their toxic mortgaged-backed securities still on the books from the 2008 Great Recession. So Pimbo borrowed $88 billion in order to buy mortgage-backed securities to sell to the Fed. The media is saying that QE4 is to lower mortgage interest rates, but the main benefit for Wall Street is unloading their crap derivatives onto the Fed and also getting the stock market and commodities markets pumped up by the Fed driving money out of the bond markets by buying trillions in Treasuries to depress their interest rates to record lows.
--David
David, interest rates cannot go any lower. Fed rates are .25%, yes that is 1/4 of a percent!
ReplyDeleteThe Fed, as I read, is buying US treasuries, not MBS.
We both agree that we are screwed as a country due to the "managing of the economy" by anyone. No one, no group, no company is so smart that they could predict anything when it comes to the economy, consistently.
Yes, I was talking about QE3 used to buy Wall Street derivatives. And I know the Fed rate is at .25%, but I was referring to interest rates on Treasury bonds. The yield was at 2.04% a year ago, and now down to 1.62%. Wall Street would like to have the Fed drive it even lower with QE4.
ReplyDeleteYou can't change government by electing Republicans or Democrats, because both parties are controlled by Wall Street. The only solution is break the hold that investment banks have over government. And the key to doing that, as you and I have discuss before, is serious campaign finance reform. How to do that? I don't know, but the impetus must come from outside, not inside.
--David
That is why I have been a supporter of the Tea Party for at least four years!
ReplyDeleteWall Street loves the Tea Party. Unregulated banks have wrecked the U.S. economy over and over with their "bubbles" (1893, 1929, 2008), and the only times they didn't was when we had fairly effective regulations on them (1933-1980) to prevent it. Tea Party would just make the problem worse, taking us back to the 19th century banking environment. If you want to agitate against Wall Street political power, join OWS.
ReplyDelete--David (OWS)