Why is the fed fighting a fire with gasoline?

[Manedwolf]

Fed announces new U.S. mortgage-support program
Tue Nov 25, 2008 8:23am EST

WASHINGTON, Nov 25 (Reuters) - The U.S. Federal Reserve, in another massive life-support intervention for the U.S. financial system, on Tuesday announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to buy consumer debt securities,

The U.S. central bank said it would buy up to $100 billion in debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, the government-sponsored mortgage finance enterprises.

The Fed also said it would buy up to $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae. (Reporting by Mark Felsenthal, Editing by Chizu Nomiyama)

http://www.reuters.com/article/marketsNews/idUSWEQ00042320081125

They say they want to do this to "free up lending". But the people with good credit scores can still get loans, it's the people who are subprime who this would "free up" to borrow more, especially if the banks are assured of getting any losses back courtesy of taxpayers.

“This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally,” the Fed said.

In other words, they haven't learned a damned thing.

WHEN DOES IT END?!

[Jamisjockey]

But its the American Right, insured by the government, to own a home!!  And a new car!!

[Ben]

But its the American Right, insured by the government, to own a home!!  And a new car!!

And run a ski resort, and own a movie studio, because they're asking for "bailouts" now too. It's becoming surreal.

[Sindawe]

And run a ski resort, and own a movie studio, because they're asking for "bailouts" now too. It's becoming surreal.

Is anybody really surprised at this?  It is just Matthew Lesko writ large!  So hurry and get your FREE MONEY NOW!!!

[Standing Wolf]

WHEN DOES IT END?!

When the last individualist bows his head, kneels, and accepts socialism; until then, we'll be taxed and squandered into purported "prosperity," disarmed, and reminded daily by the neo-aristocrats we're moral and intellectual dinosaurs.

[Manedwolf]

But its the American Right, insured by the government, to own a home!!  And a new car!!

Wait till they start bailing out car loans to "keep people in their cars".

[Tallpine]

Where is the Fed getting all this "money"

[Manedwolf]

Where is the Fed getting all this "money"

From our future, when everyone's taxes start looking like those in the Eurozone. They just pushed the "MORE DEBT!" button again, as if that'll solve anything. Full speed ahead over the cliff.

The national debt is out of control. They've broken the system and are collapsing it. At this rate, the dollar WILL implode, we'll do an Argentina, the US will lose its credit rating from AAA to AA or even lower, and we'll go into a serious, serious depression under the heel of socialism.

And Obama? Obama is talking about creating jobs building roads. There's your future career, shoveling asphalt. A glorious future.

I don't even know what to think. This is now completely out of control.

[Nick1911]

Where is the Fed getting all this "money"

It's unsubstantiated, but I've heard that the Fed has printed several billion dollars in the last 3 months.  Does anyone have some hard numbers on this?

When an organization creates the wealth, the value, of 10,000 peoples life work, what does that mean?  What implications does that hold?

[Tuco]

There is no solid ground beneath our feet.

There's your future career, shoveling asphalt. A glorious future.

It's honest work, and I'm sure, under the big O Obama, it'll pay 30 dollars an hour.   

[MicroBalrog]

There is no solid ground beneath our feet.

It's honest work, and I'm sure, under the big O, it'll pay 30 dollars an hour.   

The problem will be taking it all home:

[RocketMan]

Here is a Russian political analyst's take on the US financial situation.  A few years ago I would have said he's just another Russian nut.  Now I'm not so sure.

http://www.drudgereport.com/flashrur.htm

[Racehorse]

There is no solid ground beneath our feet.

It's honest work, and I'm sure, under the big O Obama, it'll pay 30 dollars an hour.   

Yeah, the only problem is that a loaf of bread will cost $30.

[Perd Hapley]

Why is the fed fighting a fire with gasoline?

'Cause if they didn't, TERRIBLE THINGS would happen.  TERRIBLE THINGS!  I can't even tell you how terrible.  It would be too TERRIBLE. 

So just shut up and pay your taxes to The Obama. 

[TommyGunn]

Gaaawwwd, I sure hope our economy remains strong enough to resist all these attempts by the kakistocracy to "fix it"

[RevDisk]

It's unsubstantiated, but I've heard that the Fed has printed several billion dollars in the last 3 months.  Does anyone have some hard numbers on this?

When an organization creates the wealth, the value, of 10,000 peoples life work, what does that mean?  What implications does that hold?

That's a bit off.  Money is not really created by just printing more physical greenbacks (well, it is, but not enough to significantly alter stuff) like the days of yore.   We use fractional reserve banking (Wiki) to actually grow the monetary supply.  The total number of printed dollars is an extremely low percentage of existing wealth. 

Uncle Sam isn't printing money out of thin air, they're borrowing the money.  Which means we have to repay at some point.  With interest.

[MicroBalrog]

RevDisk: And the Fed also creates money by LENDING it. They can inflate M3 directly.

[vaskidmark]

Don't worry about how much money is being created out of thin paper, or what it will be worth.  There's a plan for us all to not only survive, but to prosper.



stay safe.

skidmark