If even you are saying this, then there is something to this. Please explain the mechanism by which you think the Fed has caused the booble.
Powell Is Out.....
- Thread starter Rickshaw Man
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If even you are saying this, then there is something to this. Please explain the mechanism by which you think the Fed has caused the booble.
In the Bernanke style QE, the Fed would buy a pre-announced amount of Treasuries on the secondary market on a regular basis. This increases bank reserves, pushes down interest rates and of course supports bond prices, while the Treasury is needing to pair new Treasury issues with its deficits.
In the Powell version of "QE" , Powell has said it is not QE, fed makes collateralized loans to Large Investment Banks which use the borrowed money to buy assets (apparently whatever assets the IBs finds attractive, including equities, etc.). The loans then appear on the Feds Balance sheet as Fed assets.
In either case, there is really no new, net, permanent money being created. In Bernanke style QE, the money created by the fed to buy treasuries is a government liability. The fed is simply exchanging, in the private sector, one type of government liability (fiat money) for another type, an interest paying government liability called a Treasury Bond. In fact, this transaction actually reduces the net future Treasury liability -- as I see it.
In the Powell version of "QE" the Fed engages in a banking transaction. It makes a loan. New money is created when the loan is made, and the money disappears when the loan is paid off.
The only time there is net, new, government fiat money created is when the Fed net covers a Treasury overdraft. Overdrafts are created by deficit spending. Fiat money created this way is "base" or "outside money". The other kind of money is only temporarily created when a bank makes a loan. This kind of money is "inside" or "credit" money. The bulk of the money supply is accounted for by "inside money".
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what.
the.
fuck.
howcome I never heard of this till now.
So they can never pay those loans back because it would cause a market crash. WOW.
Also, do you have links to this?
I am sure Powell is much better than anyone Biden would appoint.
Nightmares of 'Fed chief (insert biden pick)' would be worse than Powell, who is at least reasonably competent.
Powell, I have no problem with.
Biden Kamala Harris Pelosi though, ... let's say I agree with fox news commentators.
Lessee.... for jokes, insert phrases:
Fed chief Bernie Sanders would....
Fed chief Kamala Harris would....
Fed chief Nancy Pelosi would...
Democrats are a fucking comedy show. High taxes. 30 year high inflation. Border flood of caravan 'migrants '. Afghanistan. China walks all over us. Record high crime, don't defund the police. Dumbass energy policies cutting pipelines so we get supply chain disruption. Wtf
Yeah trump's tweets were annoying but his policies were much better.
America is headed for deep shit with moron Democrats. Polls agree 38%
Nightmares of 'Fed chief (insert biden pick)' would be worse than Powell, who is at least reasonably competent.
Powell, I have no problem with.
Biden Kamala Harris Pelosi though, ... let's say I agree with fox news commentators.
Lessee.... for jokes, insert phrases:
Fed chief Bernie Sanders would....
Fed chief Kamala Harris would....
Fed chief Nancy Pelosi would...
Democrats are a fucking comedy show. High taxes. 30 year high inflation. Border flood of caravan 'migrants '. Afghanistan. China walks all over us. Record high crime, don't defund the police. Dumbass energy policies cutting pipelines so we get supply chain disruption. Wtf
Yeah trump's tweets were annoying but his policies were much better.
America is headed for deep shit with moron Democrats. Polls agree 38%
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It is a two-horse race between Powell and Brainard.
Probably they won't have a problem there, but of course there is some risk. They are in the business of making money. The IBs plan to pay back their loans from the Fed out of their profits.
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There are probably numerous places you can go for the information you seek. The best would be the The Fed's site, but of course it is difficult to get to the right place; there is so much there. You might try just doing a search on Jerome Powell and see what turns up. Or maybe "Powell and QE" Maybe even try the wiki article on him. They are often quite complete when it's a contemporary. I was always concerned that Powell was a little too close to Wall Street and the Banking industry. I'd give you a direct link if I could only remember where I first read about his QE that he denies is really QE.
Let me elaborate on this post above now that I have a moment. I suppose Powell is at least technically right when he says these loan programs the Fed is providing are not QE. Technically they could have similar net results as Bernanke QE, but practically speaking I think that's a bit of a stretch. I think these facilities opened by the Powell Fed are extensions of the facilities first used by the fed during the financial crisis, but there seems to be a loosening of the rules under Powell, which I am personally not very happy with. To be specific, there are a number of fed loan facilities. One such would be TALF, which stands for Term asset-backed-securities loan facility . Under TALF you will find such participants as Blackrock (BLK) for example. These loans are made at very favorable interest rates, to put it mildly. These are justified under the Powell monetary policy. But one can't help but question the justification. Frankly, I miss Bernanke. I wish he was back in charge. And please do not confuse a little knowledge with true expertise. I am not an expert on fed policy, I just know more about it than most. By the way, I believe TALF was originally to end in December last year. I don't know if it was extended.
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