US monetary policy is about to lead to disaster

will the $US collapse within 5 years?

  • Yes

    Votes: 6 31.6%

  • No

    Votes: 13 68.4%
  • Total voters
    19
  • Poll closed .
Central Banks across the world have frequently used quantitative easing (QE) as a means to introduce greater liquidity into the economy. However, QE has raised the risk of moral hazard: investors will take greater risks, knowing that the potential costs will be borne, in whole or in part, by others. Moreover, QE has increased asset prices, which in turn has severely affected the ‘prospective return’ on all assets.

I found a video that reveals some interesting facts about how central banks' interference has severely impacted global economies : http://multi-act.com/central-banks-moral-hazard-prospect-global-markets/
 
A marvelous and convincing font of disinformation from Trivedi. It will be quite effective. This wouldn't necessarily prevent me from investing with him. His company could be quite successful despite his rather pathetic understanding of economics. He is a good businessman. No doubt there.
 
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QE applied modestly will do good and has done good but this form of manipulation has taken the front seat in trying to 'change' current economic conditions. It just seems a bit desperate to me or are we still living in desperate times?
 
Fresh on the heels of Helicopter Ben's self promotion tour yesterday, someone named Pam Martens had this to say in an article:

".... on March 3, 2009, former Fed Chairman Ben Bernanke testified under questioning from Senator Bernie Sanders that “the Federal Reserve lends to healthy firms on a collateralized basis…” In reality, Citigroup was a financial basket-case at that point. Its stock closed that day at $1.22. It would take a court battle launched by Bloomberg News and legislation pushed by Senator Bernie Sanders to unearth from the Fed the fact that it had funneled over $16 trillion in cumulative loans to save the financial system. Citigroup was the largest recipient of those loans, with a take of over $2.5 trillion cumulatively, on top of $45 billion in TARP funds and over $306 billion in asset guarantees."
 
Since some folks here have said Bernanke was "brilliant" and an amazing Fed Chairman, I thought I'd post some of his greatest hits.

CQhBhdpW8AAgIXy.jpg:large
 
fhl said:
Fresh on the heels of Helicopter Ben's self promotion tour yesterday, someone named Pam Martens had this to say in an article:

".... on March 3, 2009, former Fed Chairman Ben Bernanke testified under questioning from Senator Bernie Sanders that “the Federal Reserve lends to healthy firms on a collateralized basis…” In reality, Citigroup was a financial basket-case at that point. Its stock closed that day at $1.22. It would take a court battle launched by Bloomberg News and legislation pushed by Senator Bernie Sanders to unearth from the Fed the fact that it had funneled over $16 trillion in cumulative loans to save the financial system. Citigroup was the largest recipient of those loans, with a take of over $2.5 trillion cumulatively, on top of $45 billion in TARP funds and over $306 billion in asset guarantees."
More...

I think that Martens article being quoted is likely at least partially incorrect in that some asset purchases are being confused with loans. Certainly, Bernanke is correct in describing the general practice. In general, the Fed avoids loaning to unhealthy banks, and all loans are collateralized, as Bernanke stated. During the financial crisis, the usual rules were definitely bent to some extent. Some banks had temporarily unhealthy balance sheets because not all of their assets could be realistically marked to market.. These banks were not generally rescued via collaterized loans. Instead their temporarily unmarkable assets were bought by the Fed at a discount and the bank's reserve account credited. Only certain kinds of assets could qualify. Those banks, and there were many, whose net liabilities exceeded their assets either went into FDIC receivership or were saved by buyers with sufficient assets stepping in and purchasing them. Citi may in fact be an exception as it was a huge bank whose failure would have been catastrophic. There was some notable failures among very large banks that could not meet Fed requirements and for whom no purchaser could be found, e.g. Washington Mutual, and Lehman Brothers.

The Fed does not give money to banks.

Here is the citation that fhl failed to give:
http://wallstreetonparade.com/ those who have an interest may want to read the original Pam Martens article and make up their own minds regarding the advisability of Fed moves during the financial crisis.This article however would not be the best source of accurate information.
 
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actually, if I remember correctly WAMU was eventually acquired out of bankruptcy by JP Morgan Chase. Which is like one criminal acquiring another. And those loans could have been Treasury Dept loans to Citi rather than Fed loans. I'm not going to research this further, but feel free to if so inclined.. I suppose the Fed could have operated as an intermediary facilitator between Citi and the Treasury, just as they did in the AIG cash for Stock deal -- a deal that incidentally yielded a significant profit to Treasury.
 
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piezoe said:
I think that Martens article being quoted is likely at least partially incorrect in that some asset purchases are being confused with loans. Certainly, Bernanke is correct in describing the general practice. In general, the Fed avoids loaning to unhealthy banks, and all loans are collateralized, as Bernanke stated. During the financial crisis, the usual rules were definitely bent to some extent. Some banks had temporarily unhealthy balance sheets because not all of their assets could be realistically marked to market.. These banks were not generally rescued via collaterized loans. Instead their temporarily unmarkable assets were bought by the Fed at a discount and the bank's reserve account credited. Only certain kinds of assets could qualify. Those banks, and there were many, whose net liabilities exceeded their assets either went into FDIC receivership or were saved by buyers with sufficient assets stepping in and purchasing them. Citi may in fact be an exception as it was a huge bank whose failure would have been catastrophic. There was some notable failures among very large banks that could not meet Fed requirements and for whom no purchaser could be found, e.g. Washington Mutual, and Lehman Brothers.

The Fed does not give money to banks.

Here is the citation that fhl failed to give:
http://wallstreetonparade.com/ those who have an interest may want to read the original Pam Martens article and make up their own minds regarding the advisability of Fed moves during the financial crisis.This article however would not be the best source of accurate information.
More...


Forbes
SEP 20, 2011 @ 01:26 PM 70,947 VIEWS
The Fed's $16 Trillion Bailouts Under-Reported



" The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis."



http://www.forbes.com/sites/traceyg...the-feds-16-trillion-bailouts-under-reported/
 
The fed is in complete BS mode. They're not contemplating raising rates. Right now they're plotting and scheming to implement nirp and print more money.


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