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I live in the Phillippines for 2.5 years now very happily.
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Dark Skinny
“Denial ain’t just a river in Egypt…” - Mark Twain
Recent Posts
- Will the US Govt. Devalue the Dollar ?
- Where’s the Gold, Ben ?
- A Supreme Victory for Special Interests
- Stiglitz, Sarkozy: A Dollar Reserve System No Longer Makes Sense
- McCain Gets It, Obama Doesn’t
- Short-Term Debt and the Greenspan-Guidotti Rule
- Swine Flu Myths and Tales
- New and deadlier Swine Flu mutation reaches the US
- Tiny Mauritius Tells US To Shove Its Dollar, Buys Gold Instead
- Lies, Fake Gold and a Rogue Nation
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March 30th, 2009 at 3:42 pm
i love your blog and respect your insight.
i keep grazing across articles (since last december) in which it is stated that the Federal Reserve wants to create its own bills - the clips never get much press beyond that…
I was wondering what implications this may have on the United States? Is this unconstitutional? What might the results be?
here is the most recent excerpt on bloomberg:
full article: http://www.bloomberg.com/apps/news?pid=20601087&sid=am2iOTHhmoo4&refer=worldwide
Fed Bills
To help raise rates when the time comes, the Fed wants the power to sell its own debt as a means of mopping up some of the funds it’s pumped into the economy. San Francisco Fed President Janet Yellen said last week: “I would feel happier having it now.”
Yellen noted that there are other steps the Fed could take. One option would be long-term reverse repurchase agreements, where the central bank borrows cash from Wall Street dealers, putting its mortgage-debt holdings up as collateral.
“Every single member of the FOMC is right on top of this, including Bernanke,” said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York. “The problem is they are spilling over into credit allocations; they are risking Congress stepping in.”
March 31st, 2009 at 5:35 am
Matt….Many thanks for your comments.
The Fed alchemists are always looking at new ways to create money out of the vapour. Trouble is, this is like trying to resolve a bad credit crisis by using more credit and debt as the means. Won’t work, it must only prolong the agony I think. This is also why the likes of China, Russia and the Middle East - all the countries with a budget surplus and savings - are so against the US govt. and Fed policies. Simply put - these countries don’t want their surplus dollar dollar savings and Treasuries value “inflated away” by the Fed’s Quantitative Easing(QE). But America’s Keynesian policies dictate that they have to follow this economic path because they have no more capital reserves of any worth left. So I guess they have no choice.
My guess is that it won’t be long before the likes of Japan, UK, Europe and the Middle East also start protesting about how the American govt. is using quantitative easing policies to massively dilute the worth of the dollar’s value.
A US Treasury bubble has already been forming for a while and, last week, the UK’s Bank of England(who have also recently adopted similar QE policies like the US) failed to auction its Treasuries at the price they wanted. This will also happen at the US Treasuries auctions soon.Then how will the US govt. be able to pay or fund their huge fiscal, foreign and national debts?