$600B money bomb dropped on Wall Street

That sound you hear is the hum and clatter of printing presses fully engaged, running at top speed and spitting out fresh new greenbacks:

The Federal Reserve, in a dramatic effort to rev up a “disappointingly slow” economic recovery, said it will buy $600 billion of U.S. government bonds over the next eight months to drive down interest rates and encourage more borrowing and growth.

Many outside the Fed, and some inside, see the move as a ‘Hail Mary’ pass by Fed Chairman Ben Bernanke. He embraced highly unconventional policies during the financial crisis to ward off a financial-system collapse. But a year and a half later, he confronts an economy hobbled by high unemployment, a gridlocked political system and the threat of a Japan-like period of deflation, or a debilitating fall in consumer prices.

The mysterious economic manouevre (or as I prefer to call it, “financial arabesque”) known as “Quantitative Easing” is explained in further depth here, and more amusingly by Matt Taibbi, below:

The Adventure of the $18 Loaf of Bread, coming soon to a grocery store near you.

5 Responses to “$600B money bomb dropped on Wall Street”


  1. 1 RossK Saturday, November 6, 2010 at 9:03 am

    JJ said:

    “….The Adventure of the $18 Loaf of Bread, coming soon to a grocery store near you…”

    Precisely.

    .

  2. 2 RossK Saturday, November 6, 2010 at 9:05 am

    Whoops, sorry.

    I think the Brothers Krupp bashed my keyboard for a moment there.

    Here’s where I was really pointing.

    .

  3. 3 JJ Saturday, November 6, 2010 at 9:27 am

    RossK – That post of yours is scary stuff 😯 but that is what’s happening. Maybe not to the extent of the Weimar Republic, but on that same road.

    I’m fastening my seat belt for a rough landing.

  4. 4 RossK Saturday, November 6, 2010 at 12:29 pm

    JJ–

    You really think there will be a landing rather than a crash this time?

    .

  5. 5 JJ Saturday, November 6, 2010 at 7:33 pm

    There’s always a landing, it’s just a matter of how rough it is. I suspect it’ll be sort of like bouncing off the tarmac a few times before sliding to a final crash in a pile of smoking ruins.

    Have a nice day 🙂


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