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The Fed admits it’s running low on ammunition

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posted on Jan, 3 2013 @ 05:06 PM
Fed says it’s running out of bullets: Marketwatch

For the first time since the financial crisis started five years ago, the Federal Reserve has at last made its first signal that its extraordinary loose monetary policy will start to get tougher.

To be sure, the change isn’t gigantic. There’s no sense that interest rates will increase from the near zero levels that have lasted for over four years.

And the Fed only last month initiated a new bond-buying program, to top off a plan to add more mortgage-backed securities that had only been around since September.

But, the minutes show, the central bank is starting to say, enough is enough. Of the crowd that supported bond buys, a few say they should continue until the end of the year, and several said it could stop, or slow, well before then.

There are two possible alternatives. One is that the Fed is expecting a big upturn in the economy, so that there just won’t be a need for more juice in the form of bond purchases.

That’s not really the case, however. The Fed only expects the unemployment rate in the mid-7% range by the end of the year, from 7.7% in November. And they don’t forecast any serious inflation issues, either.

So the alternative explanation is that the Fed just doesn’t think there’s much benefit to bond buys for the broader economy. The minutes say the program to buy MBS has been “effective” but also that the benefits were “uncertain” and that risks are growing as the balance sheet rises.

To put it differently: the Fed thinks the economy isn’t that great and there’s very little inflation to worry about, but its primary program to improve the economy doesn’t do very much.

It’s a clear admission the Fed is running out of gun powder. And that’s quite a shot it has fired to the markets.

What do ATSers make of this turn in policy view from members of the Fed? I like this article because it is the only one I have seen in the media that suggests the Fed is admitting its programs are becoming less effective.

There's speculation that the Fed might be seeing an improvement in the economy over the next months as this article suggests and challenges, to the Fed becoming increasingly concerned over risks from the continued exercise of their programs.

Anyone else have other thoughts or considerations?

posted on Jan, 3 2013 @ 05:12 PM
The most important thing to remember about the fed is that their charter runs out this year. Don't let your congress critters extend the charter. The last 100 years with the fed controlling our money has been an unmitigated disaster. The dollar has lost ~97% of it's value.

posted on Jan, 3 2013 @ 05:25 PM
reply to post by surrealist

The "Federal Reserve" is a failed experiment.

And guess what, they were created to avoid financial melt downs (allegedly), yet every major financial catastrophe has occurred during their watch. They have either caused or prolonged every financial implosion in our nation's history.

They are clueless not only about economics in general, but even about their OWN policy.

edit on 3-1-2013 by gladtobehere because: (no reason given)

posted on Jan, 3 2013 @ 05:32 PM
I have always had a problem with a private organization being involved in the monetary system of a sovereign stinks of corruption and cronyism.

I think it is time for our nation to take over it's monetary supply...period. I am not pleased with the Fed stacking up debt on the backs of citizens when we have absolutely no voice in the matter. They print money (so to speak), give it to the banks and then send the Bill to the USA gets added to our debt....and then...the money they printed and gave to the banks gets loaned out to us "commoners" for interest....are you watching this? They are printing money, sending you the bill and then loaning you back "your money" for interest...

If no one can smell the sh!t here....well...sorry....your olfactory senses must be severely damaged...
edit on 1/3/2013 by Jeremiah65 because: (no reason given)

posted on Jan, 3 2013 @ 05:33 PM
End the Fed.

Enough said.

posted on Jan, 3 2013 @ 05:59 PM
reply to post by surrealist

the [FED) Reserve is just playing the branches of government... the FED is urging the deficit spending congress & administration to spend-spend-spend so as to get a good head of steam in inflation

the FED as it is now with some $3 Trillion in bad bank paper has exhausted all its means to disburse financial largesse to the member TBTF banks & market makers... the $80 Billion the FED averages on fees for allowing the printing presses to run 24-7 making devalued Dollars for the administration & Congress to spend is on a converyor belt motion a guaranteed income to help balance the completely Red Balance Sheet accrued since the 2007-2008 implosion

the FED is throwing out a bait dead fish to troll the lawmakers...
Because in 2013 pretty much no Sovereign Nations will be buying US Bonds or Treasuries
So as the last resort the FED will need to absorb the extra $80 Bn monthly in national debt bonds/treasuries because the Banks will not buy them directly either, the risk is too high that another downgrade is in the immediate future

the whole twisted and snarled financial system is beyond repair... watch the FED trade the USA debt paper for national resources and real property & take over things like National Parks in the near future

posted on Jan, 3 2013 @ 06:07 PM
How can a budget, economy, checks & balances, or efficiency exist

when the directive is utter, corrupt use of power toward total inequality & for the most part extermination of much of the world?

posted on Jan, 3 2013 @ 06:15 PM
reply to post by surrealist

lets continue to wake up the people to the truth!!

no longer will the average peoples ignorance be their strength!!

in 2013!!!

now even their own policies have NOT!!

and will NOT help!!

get the word out!!

posted on Jan, 3 2013 @ 06:29 PM
from there web site

from what they say it's never going to go away

posted on Jan, 3 2013 @ 06:32 PM
reply to post by surrealist

They could always hypothecate some hypothetical gold or borrow some real ammo from DHS and sell it into the market also.

posted on Jan, 3 2013 @ 08:48 PM
Previous to the financial crisis, the Australian Dollar was sitting at about $0.74 US dollars and has been for a long time with some fluctuations. Now it is sitting at around $1.04 US Dollars. I have not been keeping track of how the USD relates to other currencies, but it is a clear sign of increased inflation and devaluation compared to Australia.

Many parts of the world where hit hard by this crisis, so maybe the US is doing better than some, worst than others in terms of its currency value. I have not researched enough to provide an informed conclusion on the actual state of US inflation, but know that printing more money has its effects and risks.

posted on Jan, 5 2013 @ 08:51 AM

Originally posted by CosmicCitizen
reply to post by surrealist

They could always hypothecate some hypothetical gold or borrow some real ammo from DHS and sell it into the market also.

I guess they are talking about issuing a Platinum Coin now....not the American Eagle Platinum coin but one coin for a Trillion Dollar denomination that the Treasury would put on deposit with the Federal Reserve as collateral to avoid the laws regarding printing of paper money. Talk about "smoke and mirrors" (make that platinum backed instead of silvered mirrors).

posted on Jan, 10 2013 @ 07:10 AM
Just because we hear and see information on the news, in the papers and on the net, doesn't mean it's good information. Information does not equal fact.

I love how folks who know nothing about what the Fed does, other than what they hear on the news think they know it all.

I heard it on the news so it must be true...... Some guy who claims to be a Fed insider leaks some information... so it must be true. Really? Ignorant much?

A misunderstood, non-profit organization whose mission is to promote sound growth and financial stability, who contributes millions to local communities, other non-profits, the region in which they operate and the nation through high quality research, regulatory oversight, financial services... oh, did I mention "free" financial services to consumers? and through leadership and innovation.

For those of you on your "end the Fed" wagon... go ahead and end the Fed and see what happens to your banks, your money...

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