Fed to buy up to $300B long-term Treasury bonds

Fed to buy up to $300B long-term Treasury bonds

news.yahoo.com

WASHINGTON – The Federal Reserve announced Wednesday it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt.

In addition, the Fed said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets.

The recession that began in December 2007 already has snatched a net total of 4.4 million jobs and has left 12.5 million searching for work.

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So if I understand correctly, and someone please correct me if i'm wrong.

FED makes a bank account that doesn't really exist for the U.S Treasury and gets back bonds in return.

So the question arises, why do this?

Why take this route, is it because nobody wants to lend the U.S. money anymore? Has global confidence over the FIAT currency vanished?

How can directly expanding the money supply with nothingness not force the country into having a zimbabwe like currency value? How can it NOT happen?

news.yahoo.com
(visit the link for the full news article)