IMF poised to print billions of dollars in ‘global quantitative easing’

March 18, 2009 by · Leave a Comment
Filed under: Currency News 

This is a interesting article, what I want to know is how the IMF is getting the ability to issue currency like a central bank?  As stated in the article, they will be issuing SDR’s (Special Drawing Rights).  Here is a fun quote: “The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them.” and to take the cake “The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary.”  No need to be worried about secret plans via the “Shadow Banking System” when they are all being publicly displayed.

News:

The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis.

Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.

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Fed may monetize debt via purchasing Treasuries in days to ease credit

January 18, 2009 by · Leave a Comment
Filed under: Policy News 

We are have been hearing about this magical tool kit the Fed has at its disposal.  Now we find out it is the age old method of printing money by purchasing our treasuries from ourselves through the Federal Reserve.  This is injecting money directly into the economy.  

Once we get a recovery we will see inflation on the rise, it will begin because investors will have confidence and they will start investing.  Because of the de-leveraging process, production of many basic materials have come offline so that will create a lag effect that will be seen in much higher prices.  This is very bad fiscal policy and can result in hyper-inflation if we have too much money in the economy and people are to believe prices will continue to rise and they velocity of money increases to a rate that destroys the currency.  

News:

The Federal Reserve may purchase Treasuries within the next few days or weeks as it broadens its policy beyond interest rate cuts to ease credit conditions amid the worst recession in 25 years, according to UBS AG.

“Fed officials use every chance they get to highlight Treasury purchases as an important arrow in their quiver,” William O’Donnell, U.S. government bond strategist at UBS Securities LLC in Stamford, Connecticut, wrote in a research report today. “It now appears as if the Fed may use Treasury purchases as a blunt tool to bring loan rates down further. This makes it more likely that Treasury purchases come sooner.”

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With quantitative easing under way, where is M3?

December 1, 2008 by · 1 Comment
Filed under: Opinion 

Well it would be nice to see what this number would be at if they still published it?  Many other people has reconstructed data sets that try and emulate the old statistic.  From all they I have read, the M3 measure of the money supply would be in double digits.  That does not say much for inflation when the business cycle picks up again.  At the time of this writing, the Dow Jones Industrial Index lost 7.7% today alone.  

I believe people are losing confidence in the system and the information they keep being told.  We are bailing out bad institutions with good money and in turn, reducing the confidence in our currency with their bad assets which should of never been made whole.  Why do I have to accept $24,000+ in debt to people who got greedy and wanted to raise their relative advantage higher?  

Why are we saving a system that has created more wealth disparity than wealth itself?  I thought we are suppose to have life, liberty and the pursuit of happiness protected and not oppressed?  You can see it in all the currently writings by our press and government.  It is all about getting the credit (debt) flowing and not actually address the problem of deficit spending, incentification of profit over job creation & raising of living standard which is what drives consumption in the first place.  We actually encourage companies to send job overseas to make products for consumption in the U.S.  

Who are we actually benefiting in that situation, I would say the shareholders to the determent of our people.  I am not advocating stepping away from free markets with prudent regulation at all, but I am saying that we should take into effect what the costs and benefits are by focusing on consumption and not production.  We need to address the real problems and make a system that give equal opportunity to all its people.  From their a person can and will choose their path in life.

News:

With quantitative easing under way, money supply is going to become an increasingly important gauge.

Morgan Stanley notes the measure will be a key indicator of when ‘QE’ actually starts to kick in. Before adopting QE, all excess reserves created by the Fed were being hoarded by banks. Rather than increasing, the so-called money multiplier (the link between the Fed’s balance sheet and the money supply) had actually plummeted. The only other time this has happened is during the Great Depression, say Morgan Stanley. But there is reason to be optimistic.

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