Not exactly the same - you and he are on the same page. Adjust semantics so it seems innocuous. However, leading up to the question, he describes it just fine. "We go into the computer and add a few numbers to the accounts". So yeah, you're not running the printing press and minting fresh $100 bills, it's just done electronically. Give it up already.
Here's Bullard admitting it as well.
LOL, ok.
It's not exactly
that simple to get hyperinflation. If there was credit demand and the money was leaving the balance sheets of the banks in order to be lent out, and that money was driving demand for goods and services, you'd see a huge spike in inflation. But because it isn't - because it's resting there and instead being used to increase leverage and drive risk assets for return, all you've seen is a rise in asset prices with no demand follow up. Ie, just because housing prices rebounded and all those hedge funds decided to get into the rental market (and now rent homes as investment companies) it didn't drive more buyers to the housing market - outside of the funds. All that was done is to create a bubble in prices - which, once the funds begin to bail (and they have) will bust all over again. It's not healthy demand creation.
It doesn't matter what the Fed buys. I don't understand why you cannot grasp this. Whatever they buy, they give money for - money which gets used for something else. So they might as well have done so on their own and just bought the end asset. If they buy crap from the banks, they free up money the banks have to use elsewhere. I won't even get into the "discounted securities" argument, because that's a load of bunk. They paid pretty close to top dollar, and then gave the banks a dealer commission for selling the stuff, and then pay interest on the money they gave the banks which is parked at the Fed. Quite a deal.
Also remember that any bank can borrow money at essentially 0% and turn that money into returns by buying assets. If I could borrow an almost limitless amount of free money and then just buy bonds yielding 3%, that's "essentially printing money" too.
Extraordinary is the understatement of the decade.
How do you get that these securities are illiquid? When the Fed buys the 7 year or the 10 year notes, or even recently issued Treasury debt of any denomination (as it does frequently) that's not illiquid securities! In fact, there have frequently been issues in liquidity in the market because the Fed has bought so much, and everyone else now has to scramble to find good collateral whenever there are market stress issues - a situation the Fed has created.
The Fed will never sell them off, because it will never be able to without shocking the market. And by never, I mean 5-10 years out. Who knows what happens after that, or if there's not some sort of financial catastrophe and what the lunatics do then.
Again, worthless doesn't matter. The Fed created money, and then gave that money to the banks (which the banks turned around and did other things with). It created money. Printing or electronically, it doesn't matter. Money was
created. Vast sums of it.
Not necessarily. That would depend on the velocity of money. Feel free to educate yourself with
Hussman's viewpoint on it.
The Fed won't be able to do anything to combat inflation until they accept the fact that when they do, they will pop the bubbles they created. And they are unwilling to do so. This is why Bullard panicked when the S+P just recently fell 4%. A measly 4% after a more than 200% run up, and Bullard begins to panic.
See where Bullard calls for an end to accommodation, but then panics after the market responds. Proving
without a doubt the only metric the Fed is looking at is the market.
That was to illustrate how hilarious Bernanke is in the public's eye, and to show you how the man contradicts himself regularly - admitting that they are printing. "So, you're printing money?" "In effect, yes."
