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THE Goldman Sachs Thread (merged)

Discussions about the economic and financial ramifications of PEAK OIL

Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Wed 03 Nov 2010, 14:40:23

Sixstrings wrote:So "just" monetizing the federal deficit is good news to you?

That's about the same - or less - than they did in FY 2010.

I personally don't think they needed to do it at all, but I also don't think the act of doing it will result in some sort of Doomsday.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Daniel_Plainview » Wed 03 Nov 2010, 14:50:17

It's interesting how some people claim that the US is in a much-sooner-than-expected RECOVERY, and yet the Fed finds it necessary to continue to implement such drastic policies as ZIRP and QE2 just to keep the economy on life support. If the "recovery" is so fragile that it requires extreme measures of ongoing life support, then it really isn't a "recovery" at all.

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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Wed 03 Nov 2010, 14:52:48

^
That conclusion presumes the Fed is all-knowing and smarter than anyone else - a presumption which is up for debate.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Daniel_Plainview » Thu 04 Nov 2010, 09:41:08

OilFinder2 wrote:^
That conclusion presumes the Fed is all-knowing and smarter than anyone else - a presumption which is up for debate.


No, my statement assumes that the Fed has access to more economic data than perhaps anyone, and when the Fed undertakes draconian life-support measures like QE and ZIRP, it does so based on its analysis of this data. Can you name any person/entity that is privy to more sources of information about the US economy than the Fed? Can you identify anyone whom Congress and Obama rely on more than the Fed?

In any case, the Fed has concluded that the US's so-called "recovery" is either nonexistent, or it is so weak, anemic, shallow and fragile as to require the continued infusion of extreme life-support measures.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Plantagenet » Thu 04 Nov 2010, 09:55:12

Daniel_Plainview wrote:It's interesting how some people claim that the US is in a much-sooner-than-expected RECOVERY, and yet the Fed finds it necessary to continue to implement such drastic policies as ZIRP and QE2 just to keep the economy on life support. If the "recovery" is so fragile that it requires extreme measures of ongoing life support, then it really isn't a "recovery" at all.


Its a very weak, jobless recovery but that hasn't stopped Obama and the MSM from trying to convince people that everything is great. ----- I expect now that the election is over the "happy talk" from Obama and the dems and the MSM will stop for a while.

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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby vision-master » Thu 04 Nov 2010, 10:51:23

All this partisan mud slinging talk is meaningless @ this point.

FYI: you all know planted is a wealthy frat boy trust funder.......
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Thu 04 Nov 2010, 14:39:24

Daniel_Plainview wrote:No, my statement assumes that the Fed has access to more economic data than perhaps anyone, and when the Fed undertakes draconian life-support measures like QE and ZIRP, it does so based on its analysis of this data. Can you name any person/entity that is privy to more sources of information about the US economy than the Fed? Can you identify anyone whom Congress and Obama rely on more than the Fed?

In any case, the Fed has concluded that the US's so-called "recovery" is either nonexistent, or it is so weak, anemic, shallow and fragile as to require the continued infusion of extreme life-support measures.

The Fed has no more access to any more data than anyone else. There's such a huge amount of data on such a huge variety of things, there isn't really anything that no one can't find somewhere, or anything that someone couldn't create themself which derives or extrapolates from existing data (lots of people doing that!).

What exactly do you have in mind? What data might exist that the Fed would be interested in that is not published somewhere?

Here's what I mean. If you can think of something that might be useful data economically, you can find it somewhere:
http://www.economagic.com/fedstl.htm
http://www.economagic.com/feddal.htm

The reason Congress and the Prez get so such input from the Federal Reserve is because . . . well, they're the US central bank, and they're supposed to consult with one another. The governments of all nations with central banks do the same thing.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Mesuge » Thu 04 Nov 2010, 17:15:23

Boy, are you for real?
http://www.auditthefed.com/about-the-audit/

FED is a typical criminal racket owned by private (&international) bankers, no audits available and ownership structure to be known. And pls. don't respond with something uber-silly like that POTUS person and Congress supposedly controls them.. :lol:

Btw. classic central banks of sovereign nations (non US rest of the world) are something completely else, although participating in the prevailing scheme to large extent as well, since petrodollar is global reserve currency and medium of exchange.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Thu 04 Nov 2010, 19:48:12

FED is a typical criminal racket owned by private (&international) bankers, no audits available and ownership structure to be known . . .

If that was true, it would support my earlier statement where I said:
OilFinder2 wrote:That conclusion presumes the Fed is all-knowing and smarter than anyone else - a presumption which is up for debate.

If the Fed was a criminal racket whose main purpose was to serve international bankers, would it not be conceivable they could be erring in undertaking QE2? Perhaps the economy is doing better than they are stating, but they are undertaking QE2 for some other ulterior motive?
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Revi » Thu 04 Nov 2010, 20:46:34

QE2 is to drain all us middle class people of our savings. We're all supposed to enter the casino now (the stock market) and pony up our retirement. The 2% gain in everything today is supposed to get us worried that our money will be worthless by Christmas (which it may be), so we need to spend it.

C'mon. Quit being such a worrywort. Come on into the casino.

It got me a bit worried today. I was thinking of some crazy move, but I think I'll try to figure out a smart way to jump. I just bought OIL for my 403 tsb about two weeks ago and it's already up about a buck.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby gollum » Thu 04 Nov 2010, 21:11:16

Took a little spare cash and bought 11 silver dollars today, we can't get at our retirement but we keep very few other dollar assets anymore.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Daniel_Plainview » Fri 05 Nov 2010, 07:04:38

OilFinder2 wrote:
Daniel_Plainview wrote:No, my statement assumes that the Fed has access to more economic data than perhaps anyone, and when the Fed undertakes draconian life-support measures like QE and ZIRP, it does so based on its analysis of this data. Can you name any person/entity that is privy to more sources of information about the US economy than the Fed? Can you identify anyone whom Congress and Obama rely on more than the Fed?

In any case, the Fed has concluded that the US's so-called "recovery" is either nonexistent, or it is so weak, anemic, shallow and fragile as to require the continued infusion of extreme life-support measures.

The Fed has no more access to any more data than anyone else. There's such a huge amount of data on such a huge variety of things, there isn't really anything that no one can't find somewhere, or anything that someone couldn't create themself which derives or extrapolates from existing data (lots of people doing that!).

What exactly do you have in mind? What data might exist that the Fed would be interested in that is not published somewhere?

Here's what I mean. If you can think of something that might be useful data economically, you can find it somewhere:
http://www.economagic.com/fedstl.htm
http://www.economagic.com/feddal.htm

The reason Congress and the Prez get so such input from the Federal Reserve is because . . . well, they're the US central bank, and they're supposed to consult with one another. The governments of all nations with central banks do the same thing.


My point is obvious and I'm not sure why we're not connecting: the Fed has the incentives, resources, and ability to analyze economic data to a degree equal to or greater than any other person or entity. As you note, the Fed also has a duty to do so. In addition, the Fed has a duty to make informed, thoughtful, and circumspect decisions. Therefore, one can assume that when the Fed undertakes an action which is considered extreme and draconian, and which will be scrutinized by every country, every scholar, and every pundit, it does so only after having seriously considered all relevant economic data.

The Fed has concluded that Obama's beloved "recovery" is either nonexistent, or it is sufficiently fragile as to require potent injections of ongoing life-support. When an economy is on emergency life-support, any claim that it is in a "recovery" must be rejected.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Fri 05 Nov 2010, 08:52:31

My point is obvious and I'm not sure why we're not connecting: the Fed has the incentives, resources, and ability to analyze economic data to a degree equal to or greater than any other person or entity.

That's where I disagree. At the very least, other government entities (the Treasury Dept, the Commerce Dept, etc) have the same ability. In addition, universities and large companies like Goldman Sachs have the same resources and abilities. And they all use the same data, which is available to everyone, a sample of which I posted above.

In addition, the Fed has a duty to make informed, thoughtful, and circumspect decisions.

That does not mean they're going to be correct. Are you prepared to tell me the Fed is infallible?

Therefore, one can assume that when the Fed undertakes an action which is considered extreme and draconian, and which will be scrutinized by every country, every scholar, and every pundit, it does so only after having seriously considered all relevant economic data.

You can get 2 economists to look at the exact same set of economic data and come up with 2 different conclusions. Unless you're prepared to answer 'yes' to my question of infallibility above, then you have to conclude that the Fed might - just might - be incorrect in making its QE2 decision, and that they decided to undertake QE2 because their predisposition is toward pessimism and/or it was the politically correct thing to do.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Daniel_Plainview » Fri 05 Nov 2010, 10:03:04

OilFinder2 wrote:
My point is obvious and I'm not sure why we're not connecting: the Fed has the incentives, resources, and ability to analyze economic data to a degree equal to or greater than any other person or entity.

That's where I disagree. At the very least, other government entities (the Treasury Dept, the Commerce Dept, etc) have the same ability. In addition, universities and large companies like Goldman Sachs have the same resources and abilities. And they all use the same data, which is available to everyone, a sample of which I posted above.


It's not merely ACCESS TO data that's relevant; the Fed's analysis, interpretation, and use of the data is key. By way of illustration, here's a partial list of Fed publications.

A
Annual Percentage Rate Tables, vols. I and II
Annual Report
Annual Report: Budget Review

B
Bank Holding Company Supervision Manual
Bank Holding Company Performance Reports
Bank Secrecy Act Anti-Money Laundering Examination Manual
Beige Book
Bulletin (Federal Reserve)
Buscando la hipoteca más favorable: compare, verifique, negocie

C
Capital Adequacy Guidelines (Board regulations)
Commercial Bank Examination Manual
Consumer and Community Affairs Handbook (Regulatory Service)
Consumer Compliance Handbook
Consumer Guide to Check 21 and Substitute Checks
Consumer Handbook on Adjustable-Rate Mortgages
Consumer's Guide: Credit Cards
Consumer's Guide to Mortgage Lock-Ins
Consumer's Guide to Mortgage Refinancings
Consumer's Guide to Mortgage Settlement Costs

E
Examination Manual for U.S. Branches and Agencies of Foreign Banking Organizations

F
5 Tips: Avoiding Foreclosure Scams
5 Tips: Dealing with a Home Equity Line Freeze or Reduction
5 Tips: Getting the Most from Your Credit Card
5 Tips: Improving Your Credit Score
5 Tips: Protecting Your Checking Account
5 Tips: Protecting Your Home from Foreclosure
5 Tips: Shopping for a Mortgage
Federal Open Market Committee Rules | Order Form
Federal Reserve Act
Federal Reserve Bulletin
Federal Reserve Regulatory Service
Federal Reserve System: Purposes & Functions
FFIEC Information Technology (IT) Examination Handbook
Finance and Economics Discussion Series

G
Government Performance and Results Act (GPRA) Reports
Guide to Business Credit for Women, Minorities, and Small Businesses
Guide to the Flow of Funds Accounts

H
Home Mortgages: Understanding the Process and Your Right to Fair Lending
How to File a Consumer Complaint about a Bank

I
Interest-Only Mortgage Payments and Payment-Option ARMs--Are They for You?
International Finance Discussion Papers
International Journal of Central Banking

K
Keys to Vehicle Leasing: A Consumer Guide

L
Looking for the Best Mortgage: Shop, Compare, Negotiate
Lo que usted necesita saber: Nuevas normas para el uso de tarjetas de crédito que entrarán en vigencia a partir del 22 de agosto
Lo que necesita saber: Nuevos reglas de sobregiro para las tarjetas de debito y las tarjetas de ATM
Lo que necesita saber: Nuevas reglas para las tarjetas de crédito eficaz Feb. 22
Lo que usted debería saber sobre las líneas de crédito con garantía hipotecaria
Lo que usted debería saber sobre sus cheques

M
Models & Monetary Policy: Research in the Tradition of Dale Henderson, Richard Porter, and Peter Tinsley
Monetary Policy and Reserve Requirements Handbook (Regulatory Service)
Monetary Policy Report to the Congress
Monthly Report on Credit and Liquidity Programs and the Balance Sheet

O
Other Reports to Congress

P
Payment System Handbook (Regulatory Service)
Privacy Choices for Your Personal Financial Information
Protecting Yourself from Overdraft and Bounced-Check Fees
Protéjase de los cargos por cheques rebotados y sobregiros
Purposes & Functions
Putting Your Home on the Loan Line Is Risky Business

R
Regulation Pamphlets

S
Securities Credit Transactions Handbook (Regulatory Service)
Staff Studies
Statistical Digest
Statistical Releases
Surveys and Reports

T
There's a Lot to Learn about Money (188 KB PDF)
Trading and Capital-Markets Activities Manual
User's Guide for the Bank Holding Company Performance Report
Utilizar su hogar como garantía para un préstamo es arriesgado

W
What You Need to Know: New Credit Card Rules Effective Feb. 22, 2010
What You Need to Know: New Credit Card Rules Effective Aug. 22, 2010
What You Need to Know: New Overdraft Rules for Debit and ATM Cards
What You Need to Know: New Rules for Gift Cards
What You Should Know about Home Equity Lines of Credit
What You Should Know about Your Checks
When Is Your Check Not a Check? Electronic Check Conversion

You can get 2 economists to look at the exact same set of economic data and come up with 2 different conclusions. Unless you're prepared to answer 'yes' to my question of infallibility above, then you have to conclude that the Fed might - just might - be incorrect in making its QE2 decision, and that they decided to undertake QE2 because their predisposition is toward pessimism and/or it was the politically correct thing to do.


The point is not whether QE2 was the right decision; the point is that, after much deliberation, the Fed became gravely concerned about the moribund and deteriorating economy so as to necessitate the invocation of an extreme and desperate remedy -- a remedy that is completely inconsistent with a healthy recovery. If the economy were amid a true recovery, ZIRP and QE2 would not be necessary.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Revi » Fri 05 Nov 2010, 13:51:25

The price of silver held today at $26.50, which is well over two dollars more than a couple of days ago. The price of oil seems like it will stay over $86, which is a three or four dollars higher than a couple of days ago also. It seems like the QE 2 left us with at least 5% inflation.

Watch for the price of food, gas and everything else us peons buy to go up at least that much in the very near future.
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Sixstrings » Fri 05 Nov 2010, 14:04:27

Revi wrote:It seems like the QE 2 left us with at least 5% inflation.


That's a troubling thought. 5% instant inflation with each iteration of Quantitative Easing. We all know QE2 isn't the last.. heck, it's just a couple days old and Wall Street is already talking about QE3. :roll:
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Fri 05 Nov 2010, 14:19:41

Daniel_Plainview wrote:By way of illustration, here's a partial list of Fed publications . . .

You just shot yourself in the foot. In fact I was hoping and thinking you would do this. Recall that you said:
No, my statement assumes that the Fed has access to more economic data than perhaps anyone

And now you say:
It's not merely ACCESS TO data that's relevant; the Fed's analysis, interpretation, and use of the data is key.

So at first you said it was the Fed's access to data that no one else has which made them special, but now you're saying, 'Oh, it's not really just the access to data that's important.' So, is it access to data that's special, or not?

You then produced a list of publications by the Fed. Did you actually read through the list? I mean - seriously - do you know how many companies and agencies in the US write (mostly un-read) tomes like this?

"Consumer Handbook on Adjustable-Rate Mortgages"
"Regulation Pamphlets"
etc.

LOL! :lol:

There's nothing special about any of those. Anyone with knowledge of economics can produce anything on that list you created, and then some. If you browse through academic economics journals you can find a heckuva lot more insightful and rigorous analyses than the stuff in your list.

Daniel_Plainview wrote:The point is not whether QE2 was the right decision; the point is that, after much deliberation, the Fed became gravely concerned about the moribund and deteriorating economy so as to necessitate the invocation of an extreme and desperate remedy . . .

You have once again made an assumption that the Fed's reading of the economy was correct. This is what is in dispute, and you are avoiding the issue. Please answer for me once again: Can the Fed be fallible? Or are they infallible? If, as you all but admitted, the Fed may not have made the right decision, then the conclusion would be that the Fed is, in fact, capable of making incorrect decisions, and it is therefore possible that QE2 was completely unnecessary because the economy is recovering sufficiently to not need any additional stimulus.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby Daniel_Plainview » Fri 05 Nov 2010, 15:53:12

OilFinder2 wrote:
Daniel_Plainview wrote:By way of illustration, here's a partial list of Fed publications . . .

You just shot yourself in the foot. In fact I was hoping and thinking you would do this. Recall that you said:
No, my statement assumes that the Fed has access to more economic data than perhaps anyone

And now you say:
It's not merely ACCESS TO data that's relevant; the Fed's analysis, interpretation, and use of the data is key.

So at first you said it was the Fed's access to data that no one else has which made them special, but now you're saying, 'Oh, it's not really just the access to data that's important.' So, is it access to data that's special, or not?


My initial use of the term "access to data" was not meant to exclude other access-related concepts, such as the Fed's "analysis, interpretation, and use of the data." I'm baffled as to why you would focus on that.

In any case, can you offer an explanation why the Fed would undertake ZIRP and two rounds of QE (totaling multi-trillions) if the US economy were as strong and robust as you seem to allege? Do you feel that the Fed is incompetent? Do you feel that the Fed is compromised? Was QE2 a mistake? Is ZIRP a mistake? What should the Fed's discount rate be in a vibrant, growing, healthy, robust economy?
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Fri 05 Nov 2010, 20:28:57

Daniel_Plainview wrote:In any case, can you offer an explanation why the Fed would undertake ZIRP and two rounds of QE (totaling multi-trillions) if the US economy were as strong and robust as you seem to allege?

In any case, can you offer an explanation why the Fed would undertake ZIRP and two rounds of QE (totaling multi-trillions) if the US economy were as strong and robust as you seem to allege? Do you feel that the Fed is incompetent? Do you feel that the Fed is compromised? Was QE2 a mistake? Is ZIRP a mistake?

Now you're piling on the strawmen. I never said there wasn't a recession - obviously there was (DUH!). ZIRP and QE1 were undertaken in the early stages and depths of the recession and were understandable responses from the Fed. QE2 is another matter entirely.

As for QE2, I have never said it was 1999, or 2006, or 1986. We're in the fairly early stages of the recovery from a deep recession, and naturally many people are going to look at the data and be unsatisfied. In particular, people such as those at the Fed whose job is to, among other things, at least make it look like they're trying to do something, are probably going to be inclined to take some sort of action, regardless of whether such action is really needed, or will do any good. I do not think they're incompetent, it's just that their mandate is to "do something" if they think it will help, so that's what they've decided to do. Previous FOMC's and chairmen would have chosen not to do QE2. Paul Volker is one probable example. This goes back to what I said before: You can get 2 economists to look at the same set of data and come to 2 different conclusions. Just because the current FOMC has decided that conditions warrant "doing something" does not mean there is some objective truth that things are so bad that something needs to be done: There are a lot of judgement calls, market expectations, political considerations, and flat-out dice-rolling involved in decisions like this. Sometimes those decisions are good ones, sometimes they are benign, and sometimes they're poor decisions. You have yet to tell me if the Fed is infallible or not. If you agree with me that they aren't, then you've no choice but to admit the possibility that QE2 might be unnecessary. The Fed has made mistakes before, and they might be making another one again.

What should the Fed's discount rate be in a vibrant, growing, healthy, robust economy?

The strawman continues. Being in a "recovery" does not mean everything is super-duper-booming like it's 1999. Conditions like that don't occur until much later in a recovery (by then called an "expansion" - after GDP surpasses its pre-recession high). Right now it's more like . . . 1976, or 2003, or 1993, when the economy was recovering from recessions, but in the early stages of doing so (about a year or two after the official end), and a lot of economic stats were still quite bad even though things were getting better. You're basically accusing me of telling everyone it's 1999, when any intelligent and honest person can tell I'm trying to tell everyone it's more like 1993.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Goldman calls for $4 trillion QE2; dollar falls, food ri

Unread postby copious.abundance » Fri 05 Nov 2010, 20:41:14

BTW, let's for a moment pretend that the Fed is as smart as you claim they are. If in fact this is true, then the following is a must-read:

Deconstructing QE2: It's Less Than Meets the Eye
Today the FOMC told us they are prepared to buy an extra $600 billion of Treasuries over the next 8 months — about $75 billion per month. They did not commit, however, to buying this much:

The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.


In other words, the Fed is not going to make a big monster purchase of Treasuries that would flood the system with new money. They are going to dribble it out a little at a time, and might even decide to end the program after a month or two, should the economy and/or inflation show signs of picking up. This is almost exactly what I was hoping would happen.

[...]

Then read the rest of the article (and the comments, too!). In other words, there's a good chance the $600 billion figure is little more than a headline grabber designed to placate the markets (and the pols), but the reality of it is likely to be far less than the headline suggests.

And if this is true, it would indicate that the FOMC probably does think the economy doesn't need much more stimulus, but they've decided to make it look like they're "doing something" only because so many people and entities are expecting them to.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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