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Posts Tagged ‘quantitative easing’

Uhh, I think some thing big (and bad) happened in September 2008.

We changed course.  Was that the change you hoped for?

That is an awful lot of printing…

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Thanks to Zero Hedge for the chart:

Federal Reserve Balance Sheet Update: Week Of January 13, $1.070 Trillion In UST Holdings

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Looks like this G20 meeting is going to be very “interesting” and maybe a turning point…

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Russia to `Insist’ U.S. Coordinate With G-20 Members on Monetary Measures

Russian President Dmitry Medvedev will “insist” on global coordination of any so-called quantitative easing measures by government when he meets with counterparts from the Group of 20 nations this week.

Such actions will need to be planned in advance in order to avoid creating risks for other markets and economies, senior Kremlin economic adviser Arkady Dvorkovich told reporters in Moscow today.

Russia will also argue against instituting targets on current account surplusses or deficits, Dvorkovich said.

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China will be key to how this all ends…

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U.S. dollar printing is huge risk -China c.bank adviser

Nov 4 (Reuters) – Unbridled printing of dollars is the biggest risk to the global economy, an adviser to the Chinese central bank said in comments published on Thursday, a day after the Federal Reserve unveiled a new round of monetary easing.

China must set up a firewall via currency policy and capital controls to cushion itself from external shocks, Xia Bin said in a commentary piece in the Financial News, a Chinese-language newspaper managed by the central bank.

“As long as the world exercises no restraint in issuing global currencies such as the dollar — and this is not easy — then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament,” he said.

(more…)

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We are entering very dangerous waters.  The backlash will be severe, we are already seeing the effects…

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QE2 risks currency wars and the end of dollar hegemony

As the US Federal Reserve meets today to decide whether its next blast of quantitative easing should be $1 trillion or a more cautious $500bn, it does so knowing that China and the emerging world view the policy as an attempt to drive down the dollar.

By Ambrose Evans-Pritchard, International Business Editor
Published: 9:56PM GMT 01 Nov 2010

QE2 risks currency wars and the end of dollar hegemony 

QE2 risks currency wars and the end of dollar hegemony Photo: AFP

The Fed’s “QE2” risks accelerating the demise of the dollar-based currency system, perhaps leading to an unstable tripod with the euro and yuan, or a hybrid gold standard, or a multi-metal “bancor” along lines proposed by John Maynard Keynes in the 1940s.

China’s commerce ministry fired an irate broadside against Washington on Monday. “The continued and drastic US dollar depreciation recently has led countries including Japan, South Korea, and Thailand to intervene in the currency market, intensifying a ‘currency war’. In the mid-term, the US dollar will continue to weaken and gaming between major currencies will escalate,” it said.

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Here we go, its official.  Watch for price increases over the next 3-6 months…

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Fed to Spend $600 Billion More To Help Boost US Economy

The Federal Reserve launched a controversial new policy on Wednesday, committing to buy $600 billion more in government bonds by the middle of next year in an attempt to breathe new life into a struggling U.S. economy.

Sheet of US one hundred dollar bills
Don Farrall | Digital Vision | Getty Images

The decision, which takes the Fed into largely uncharted waters, is aimed at further lowering borrowing costs for consumers and businesses still suffering in the aftermath of the worst recession since the Great Depression.

The U.S. central bank said it would buy about $75 billion in longer-term Treasury bonds per month. It said it would regularly review the pace and size of the program and adjust it as needed depending on the path of the recovery.

In its post-meeting statement, the Fed described the economy as “slow”, and said employers remained reluctant to add to payrolls. It said measures of inflation were “somewhat low.”

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We are at a dangerous point this week.  Under the cover of all the election hype, the federal reserve is making probably the biggest decision in this century…remain watchful, stock up on food & water, make sure you fill up your cars with gas…pray, trust in God.  It is going to be quite a ride…

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Watch for what the Fed does today, headlines from Drudge on fed’s decision…

Treasury estimates $362B in borrowing for quarter...

Bernanke Faces More Congressional Scrutiny After Republican Election Gains...

PUMP: Fed Likely to Announce $500 Billion of Purchases...

'Biggest decision in decades'...

Fed easing may means 20% drop of dollar value...

'The end of dollar hegemony'...

Sen. Gregg: 'We're Greece' in a Few Years...

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Concerns from China on our openness to devaluing our dollar through the printing press (i.e. quantitative easing.)

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Dollar printing feeding China inflation: minister

Rampant issuance of dollars by the United States is saddling China with “imported inflation”, Chinese commerce minister Chen Deming was quoted as saying by state media on Wednesday.

“Given the current situation, companies have thought ahead and prepared for exchange rate fluctuations as well as an increase in labour costs,” Chen said, according to the state-run China Business News.

“But because the issuance of dollars is out of control, and international commodities prices are continuing to rise, China is confronted with imported inflation, which has created major uncertainties for businesses,” he said.

The comments came ahead of a meeting of the US Federal Reserve next week at which the central bank is expected to announce additional stimulus measures.

(more…)

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