The Federal Reserve sharply stepped up its efforts to bolster the economy on Wednesday, announcing that it would pump an extra $1 trillion into the financial system by purchasing Treasury bonds and mortgage securities.
Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air. But the moves on Wednesday were its biggest yet, almost doubling all of the Fed's measures in the last year.
The action makes the Fed a buyer of long-term government bonds rather than the short-term debt that it typically buys and sells to help control the money supply.
It's as if the Federal Reserve has become its own seperate government. No debate. No vote. No oversight. No tranparency. Just print it.
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2 comments:
Print Baby, Print. I remember Bdaddy always had a fight over the "Free Parking Rule" in Monopoly, wherby all the community chest, chance and tax money went to the "pot" Land on Free Parking, win the Lotto.
"It's not in the rules, and causes inflation" he told me when I was very young.
So what happens when there are no rules?
Cookin' his steak rare tonight and wishin you was here, 'Dawg
Thanks 'Dawg, wish I was with you too. But enjoying burgers, b-ball and beer at the local dive with KT and Dean was a decent substitute.
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