Bernanke: QE3 is on the way...

[originalpckelly]

http://www.cnbc.com/id/43739458

"Federal Reserve Chairman Ben Bernanke told Congress Wednesday that a new stimulus program is in the works that will entail additional asset purchases, the clearest indication yet that the central bank is contemplating another round of monetary easing.

Bernanke said in prepared remarks that the economy is growing more slowly than expected, and should that continue the central bank stands at the ready with more accommodative measures.

'Once the temporary shocks that have been holding down economic activity pass, we expect to again see the effects of policy accommodation reflected in stronger economic activity and job creation,' he said

'However, given the range of uncertainties about the strength of the recovery and prospects for inflation over the medium term, the Federal Reserve remains prepared to respond should economic developments indicate that an adjustment in the stance of monetary policy would be appropriate.'"

[Starry Messenger]

1. "temporary shocks"

Remind me what we pay these people for again.

[enlightenment]

2. "Additional asset purchases" as stimulus.

So, more money funneled to the banks and corporations.

sigh

[divvy]

9. I expect the Fed to buy Municipal Bonds

That will keep borrowing rates low for states and municipalities, lessen the urgency for tax increases, and stimulate spending .... hopefully on infrastructure.

[PoliticAverse]

3. Prepare for higher food prices... n/t

[Skink]

4. Using tapayer money for something other than war.

good show.

[PoliticAverse]

6. Well the FED will use it to buy more Govt bonds injecting more $$$$s into circulation...

Time will tell how many drones are bought...

[originalpckelly]

8. It's not like that. Banks hold treasuries as assets, they are buying bank assets.

Not actually helping to fund the government directly.

The government already received the money when the big banks bought the treasuries.

[PoliticAverse]

15. Right, like QE2 where they bought the bonds on the open market from whomever...

[originalpckelly]

7. The Federal Reserve.

Not the government.

They are basically using the authority to create new money out of thin air, that's what quantitative easing is. It's basically "printing money" only in this case you buy something from a bank using new money.

[Ruby the Liberal]

12. Printing money for something other than war.

[Newest Reality]

5. Boondoggles!

Boondoggles! All the way down.

Redistribution of wealth much?

[originalpckelly]

13. That's what it is, but only in a time of rampant inflation.

When you're creating new money to balance off the destruction of money in the economy, it shouldn't actually cause very much inflation at all.

On the other hand, when you have inflation that goes beyond the destruction of money, then you are redistributing wealth to the people who are the new recipients of the money, by stealing the value of the money away from people who held older dollars that were worth more.

[kenny blankenship]

10. In other words: People whose income derive from paper asset trading will get richer

People who work for a living, on the other hand, will pay more for everything and probably lose ground because high unemployment will continue to depress wages.

Make ready to set sail: record profits for large corporations on the horizon!

[originalpckelly]

14. That's exactly what this is.

[OHdem10]

11. Last evening on one of the Business Channels, it was very clearly

explained that our present "growth rate" is dangerous.

While we are growing, it is such a low rate, that 3 quarters
of this slow grouth means we have fallen back into recession.

Our next growth rate is crucial. Must be above 2%.

Therefore, the Fed has to be prepared. Since the Republicans
will not hear of stimulus which would be the best way to head
off a second fall over the cliff, the Fed must act.

Money has to be kept circulating through the economy. QE# sill
do this, but it helps Wall ST more than Main St. Typical fo
the Republicans to keep Wall ST going and to hell with Main
St.

Bernanke has to act. If you could talk to him, I bet he
would tell you he would rather see Stimulus going to
the country. This would mean work projects. People
earning money circulates the money better and more effectively
for everyone.


Added. We have had 2 quarters of too slow growth--one more
quarter of this weak growth and we are in a double dip.

[divvy]

16. The Fed can help main street by buying Municipal Bonds

It would lower borrowing rates, and ease the urgency for tax increases. Draconian cuts would be avoided and schools may get a little more funding.

[lapislzi]

17. Bernanke's building a boat?

Better be a life raft.

[spin]

18. It's an ark for the rich CEO's and Wall Street bankers. (n/t)

[Cali_Democrat]

19. LOL!!

He's like drug addict.

He needs to inject that high grade monetary heroin!

[jimmyflint]

20. CEOs, bankers, wall street, must need to increase bonus pay.

In these tough economic times, we must do whatever we can to insure the rich don't share any of the burden. We must make certain the wealthy are able to weather this storm without so much as getting their hair mussed. Especially those elites of both political parties who worked tirelessly to export American jobs, they should get the just desserts they so richly deserve.


:sarcasm: :sarcasm: :sarcasm:


:sarcasm:

[Broderick]

22. Some of them sadly

have had to scale back the number of homes from 10 to 9, and the number of yachts from 4 to 3. I feel for them, and hopefully this infusion will help them get back on track.

[jimmyflint]

23. LOL

:spray: Terrible, just terrible.

[andym]

21. Monetary stimulus is much weaker than a fiscal stimulus, but still better than cutting spending

which will result in less economic activity. The Feds' action will be somewhat helpful, but a fiscal stimulus like FDR's or to some extent the 2009 Recovery Act is much more powerful. Fiscal stimulus is politically untenable now and we're moving in the opposite direction by cutting government spending during the recovery which will act as an anti-stimulus. Even Goldman-Sachs predicted the negative consequences of cuts to government spending: http://articles.latimes.com/2011/feb/23/nation/la-na-gop-cuts-20110224