Federal reserve admits total defeat

At last we have QE3 which will be just step one of an orgy of imaginary money printing -- with all of it likely to go to the US Banks in worst present trouble .
I believe the Fed knows that contagion will accelerate as Italy turns bottom up in the next few weeks and with Spain they will finally derail the EZ and present EU make up .That's when German , French and to a lesser extent UK Banks will take a pounding . That's when American Banks closely tied to top European Banks will be in the worst position since Lehman Brothers dived off the top balcony .


The Federal Reserve ended a crunch policy meeting Wednesday with a decision to extend existing stimulus measures until the end of the year, in a bid to tackle subpar US jobs growth.
The Fed's top policy committee answered market demands for more action to help the world's largest economy, by expanding a program designed to lower long-term interest rates that had been due to expire at the end of the month.
The central bank will continue to switch short-term US bonds for those dated between six and 30 years, a program worth $267 billion.
The Fed's move speaks to its concern that the recovery is still not strong enough to be self-sustaining.
Since the Fed's last meeting US unemployment has ticked up to 8.2 percent and the picture in Europe (Chicago Options: ^REURUSD - news) , particularly Spain, has grown bleaker.
Members of the Federal Open Market Committee (FOMC) acknowledged the grimmer outlook. "Growth in employment has slowed in recent months, and the unemployment rate remains elevated," the statement said.
"The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually."
Later Wednesday the bank is expected to lower US growth projections for the year from 2.7 percent.
Europe's debt crisis also appeared to have a bearing on the Fed's decision.
"Strains in global financial markets continue to pose significant downside risks to the economic outlook," the FOMC noted.
But the decision appears to have been fraught. According to a statement Richmond Fed president Jeffrey Lacker voted against the measures.
He "opposed continuation of the maturity extension program," the Federal Reserve said.
Wall Street, which had seemed unsure what to expect from the meeting, gave a cautious response to the news.
Recently members of the policy-setting committee have expressed vastly different views on whether the Fed can do anything meaningful to juice the economy, allowing speculation about the outcome of the meeting to run riot.
Some are likely to be disappointed.
Many of the bolder Wall Street analysts expected the Fed to charge to the rescue.
Societe Generale (Paris: FR0000130809 - news) economists predicted the Fed may have decided to spend $600 billion more on mortgage securities and US bonds to try to jump-start investment.
The more modest bond-swapping plan brings with it concerns that it may not carry a big enough bang, or any bang at all.
Although the Fed insists it has so-called bond purchases, or quantitative easing (QE), tools at its disposal, some -- even within the central bank -- wonder if they can offer much help for the 12.7 million Americans who are out of work.
Unemployment has been above eight percent for over three years despite the Fed launching a battery of innovative stimulus measures that pushed the limits of central banking.
The bank has already lowered interested rates to near zero, absorbed around $2 trillion worth of assets to buoy markets and tweaked bond holdings to lower long-term interest rates.
"We have long held the view that each new round of QE comes with diminishing returns. We nonetheless see the impact as positive if nothing else giving the reassurance of a pilot in the plane," said Societe Generale economist Michala Marcussen.


http://us.lrd.yahoo.com/_ylt=AjoZ.Z...region=screen_name&screen_name=YahooFinanceUK

 

It looks like China will own even more of us soon enough.

 

This where I would love to have a friend with a towering intellect who can see around corners .
Why?
This part of the plot could and was predicted over 18 months ago -- that the US could only scrape some economic dignity by using the Chinese to allow major devaluation and continuity of borrowing once other sources dried up .In return they will formally sacrifice the Federal Reserve , once the $ ceases to be world reserve currency . To all intents that is signed and sealed .
But this has all been formalised this last few weeks and it seems as though the US has conceded "everything" too quickly , quietly and secretly ( most Yanks here are in total denial of recent events).
I cannot believe the likes of Geitner and Bernanke would notionally sell out without having Plan B up their sleeves .
What is it ?

What does the US need to have , or be prepared to do , to avoid letting China take them over -- almost lock ,stock and barrel ?
Is it really the end of the American Empire and Dream ? Or are there twists ahead that we have not guessed ?
Any Genius idea ?

 

Get ready for a Global Currency...

 

From an economic standpoint, I'm not seeing much downside there.

 

Most of the downsides are non-economic.

 

It's quite elementary, ray.

What the US needs to have are truly fiscally responsible people controlling the country's purse strings. Obama is on a spending spree the likes this country has never seen in its existence (with the possible exception of World War II) and Helicopter Ben is throwing too many greenbacks around.

It wasn't long ago when our federal government was able to live within this country's means, so it's possible to do it again. Whether or not American needs to pass a balanced budget amendment to make sure that happens is debatable, but knowing our politicians as I do, I think it is necessary (with a super-majority escape clause for national emergencies and wars).

Of course, once households and businesses start shedding the excessive amounts of debt they accumulated during the last decade and start spending again, this will help the government raise more revenues as the economy finally begins to recover in a manner consistent with past recoveries.

In the near term, two things need to happen - the Supreme Court needs to strike down ObamaCare and Barack Obama needs to get sent packing back to the Windy City. However, I''m not sure that will be enough - Democrats will probably have to lose control of the Senate before we can start dealing with our fiscal issues.

 

An understatement of epic proportions...

 

I wouldn't want to have to war a cap with a little red star on it, but other than that, I'm still not seeing much downside.

 

The Chinese are your masters already anyway. Best get used to firecrackers and the Year of the Rodent or whatever the hell it is.

 

The experience of the euro shows the problem with a divorce between fiscal policy and control of currency. Will never happen.

 

Really?

A couple years in the Laogai would change your tune...

 

Personal freedoms would eventually be nonexistent. Political freedoms would be the first to go.

Admittedly, our own politicians seem to be aiming for a similar goal.

Not completely, but yes, it's moving that way.

If nothing else, the Chinese do seem to budget far better than us.

 

The air has begun to come out of the Chinese bubble.

 

People TELL me I have personal freedoms but I don't really know that I have any that aren't tied to the dollar bill. What are the personal freedoms that I enjoy that the average Chinaman doesn't?

 

Exactly!

 

C'mon, you know that is a silly statement.

 

How is striking down HR3200 going to get rid of trillions in debt.. and stop the Chinese from buying U.S debt at higher interest rates ( China now has direct access to the U.S treasury..just like the federal reserve) We as a nation already spend about 400=billion in interest every year.. lol do you really think that repealing Obamacare with nothing to sensible to replace it is going magically save this country? You would better off suggesting that we repeal medicare part D and allow the U.S govvernment to bargain and shop around for the cheapest prices in medication... that would save us a good chunk a year.... right now.

You dont know it yet... but the U.S government has sold out the soveriegnty of this nation to the globalists.. its a done deal. In 5 years the dollar lose another 50% of its present value and will be in parity with the yuan. The yuan will be the new world reserve currency with a temporary partnership with the dollar. Teach your children to speak Chinese and work three times as hard for half the wages you earn now.

 

Default, hyperinflation. The debt is owned by the US government. It's not owed by the citizens of the United States.

The end of the American empire is a good thing. Empires are expensive and are never good for those without political connection.

 

You might begin by reading the First Amendment of the US Constitution.

Then, you might want to recall the horrific events of Tiananmen Square, as they unfolded in June of 1989...

 

The PRC has one of those too:

Article 35. Citizens of the People's Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession and of demonstration.



It's just words on paper.

 

But do you really imagine any consumer cares a flying fig who owns debt when everything they want to buy has risen in price and wages are broadly static ?
Inflation is just about manageable up to around 8% (few riots etc ). But after that , stock up and wear a crash helmet .
And Americans are all honoured members of debt -- after all , there is no government without citizens !

 

How so? Their only power is to ask that their notes be paid when they become due. Just like everybody else who holds US treasuries.

 

The Bill of Rights is a good place to start.

More than anything, it's a difference in the basic premise of government. While our government has expanded over time and certain politicians make continuous advancements against certain rights, our system is designed to limit government.

In China, the idea behind government is that it's supposed to run everything. Here, we try to leave more of that up to the private sector. Any expansion of government is viewed warily and questioned thoroughly.

We also tend to run things more locally. China doesn't have as much of a "states' rights" concept, although they do decentralize certain things out of practicality.

 

Typical Brit, clueless as to its own nations financial status. Austria, UK, Germany, France, Belgium, Portugal, Ireland, Greece and Italy all have higher levels of debt than the US. Look at External debt, debt owed to foreigners, as a percent of the nations GDP

US 14,710,000,000,000/ 15,040,000,000,000 or 98%
UK 9,836,000,000,000/2,250,000,000,000 or 437%
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html