The TRILLION Dollar Bail Out That You Never Heard About...

[Flesh Thorn]

I wonder why this didn't make the news yesterday?


Fed expands rescue with trillion-dollar plan
Bank shifts quantitative easing strategy into high gear; will buy $300-billion in Treasuries, $750-billion of mortgage-backed securities

KEVIN CARMICHAEL

March 19, 2009

OTTAWA -- The U.S. Federal Reserve is launching a brave new assault on the financial crisis, pledging more than $1-trillion (U.S.) in a bid to lower borrowing costs by purchasing market debt, including government notes.

Chairman Ben Bernanke and the nine other members of the Federal Open Market Committee ended a two-day meeting yesterday with a plan to fight the recession and counter "some risk" of deflation.

Catching many investors by surprise, Mr. Bernanke and his most senior lieutenants unanimously endorsed an immediate move to quantitative easing, an approach to monetary policy that generally means flooding the financial system with new money to stimulate broad buying and selling.

The Fed will do this by purchasing over the next six months as much as $300-billion of longer-term Treasury securities that set the tone for pricing throughout the credit markets.

By becoming a big-time buyer of government debt, Mr. Bernanke is betting that he can reduce yields, causing a ripple effect that sparks demand in an economy that the policy makers said yesterday "continues to contract."

Weaker yields on relatively safe government debt might also stoke demand by causing investors to seek better returns in other assets such as corporate debt.

The Fed also will expand existing programs aimed more directly at mortgage rates. The U.S. central bank will purchase an additional $750-billion of mortgage-backed securities issued by housing agencies Fannie Mae and Freddie Mac, and another $100-billion of debt issues by those agencies.

Mr. Bernanke's version of shock and awe met with immediate results - all positive.

The Standard & Poor's 500 index jumped 2.1 per cent to 794.35 at the end of trading in New York, while Toronto's S&P/TSX composite index closed 69.5 points higher at 8,629.1, up for a seventh session in a row and rising 15 per cent during that time.

Perhaps more important to Mr. Bernanke, the yield on 10-year U.S. government debt plunged a half a percentage point to 2.51 per cent, the biggest dropped since at least January, 1962, according to Bloomberg News.

If that display of confidence holds, yesterday's announcement could go down as the day policy makers finally got the upper hand in the struggle with the financial crisis, some economists said.

"This is a turning point," said Mark Chandler, a fixed-income strategist at Royal Bank of Canada in Toronto.

"The Fed has shown now that they will do whatever is necessary to avoid deflation," he said.

The Fed is resorting to quantitative easing because its benchmark lending rate is already near zero, a level at which the federal funds rate likely will remain for "an extended period," policy makers said in yesterday's statement.

While Mr. Bernanke had said he was considering resorting to buying government debt, many economists said they didn't expect him to move so soon.

The U.S. central bank may have been encouraged by its counterparts in Britain, where the Bank of England has successfully lowered borrowing costs by purchasing government bonds and corporate debt.

Japan's central bank yesterday expanded purchases of government notes and this week said it would begin making subordinated loans to banks.

The rush to quantitative easing increases the odds that the Bank of Canada will follow suit, economists said.

Earlier this month, Governor Mark Carney reduced Canada's benchmark interest rate to 0.5 per cent and said that he would present a potential quantitative easing strategy when the central bank publishes its next quarterly report on April 23.

"The prospect of the Bank of Canada actually going forward with credit and quantitative easing has increased substantially now that the theories have been successfully tested in several countries," Eric Lascelles, an economist at Toronto-Dominion Bank, said in a report yesterday.

CENTRAL BANK INITIATIVES

With benchmark lending rates near zero, central banks are now trying to lower credit rates by printing money, a strategy called alternatively quantitative or credit easing. Here's what some are trying:The U.S. Federal Reserve

Over the next six months, the Fed will buy up to $300-billion (U.S.) of longer-term Treasuries. The Fed also said it will spend an additional $750-billion on mortgage-backed securities issued by Fannie Mae and Freddie Mac and another $100-billion (US) on debt issued by those agencies. The Bank of Japan

The Japanese central bank says it will buy ¥1.8-trillion of government debt each month, up from a previous commitment of ¥1.4-trillion. Japanese policy makers also said this week they will offer banks as much as ¥1-trillion in subordinated loans.

The Bank of England

Chancellor of the Exchequer Alistair Darling has given the central bank authority to buy as much as £150-billion of assets with newly-created money. The central bank plans to spend most of the first sum of £75-billion on gilts.

The Bank of Canada

Governor Mark Carney is developing a quantitative easing plan, which the central bank intends to release in its next quarterly economic report on April 23.

[Looon]

We are fucking doomed.

No vote on this shit either.

[rgrokelley]

We are fucking doomed.

No vote on this shit either.

The Federal Reserve is a private bank, with a government sounding name. They print the money used the United States, so they have a ton of power. They can lower or raise how much the dollar is worth by just printing more. Years ago they assumed control of all the gold that was once in Fort Knox, to use as collateral. No Congressman can get them to audit it so no one knows where the heck it is now. The only Senator that actually tried was Ron Paul, but he is just one guy and got nowhere.

Fucking amazing.

[Oto-Man]

If you don't own some gold (even a little) by now...you are wrong....
I don't mean gold futures....I mean GOLD.....hard metal shit.

This shit has been tried EXACTLY 28 times in history...it has failed EVERY SINGLE TIME!!!!
You can't print money with no value to pay off a loan (to yourself) that is already backed by money with no value...that is why we were on the gold standard in the first place (killed that during Carter I think?)

http://www.goldline.com--not" onclick="window.open(this.href);return false; an endorsement..no comp for me....just the best prices to put real gold in your gun safe...even if it's $100 a month, they will ship it out to you....

good luck gents

[another damn texan]

We are fucking doomed.

No vote on this shit either.

The Federal Reserve is a private bank, with a government sounding name. They print the money used the United States, so they have a ton of power. They can lower or raise how much the dollar is worth by just printing more. Years ago they assumed control of all the gold that was once in Fort Knox, to use as collateral. No Congressman can get them to audit it so no one knows where the heck it is now. The only Senator that actually tried was Ron Paul, but he is just one guy and got nowhere.

Fucking amazing.

x2 I approve of this message. Read all about it in The Creature From Jeckyll Island.

[Bcosniper]

This shit has been tried EXACTLY 28 times in history...it has failed EVERY SINGLE TIME!!!!
You can't print money with no value to pay off a loan (to yourself) that is already backed by money with no value...that is why we were on the gold standard in the first place (killed that during Carter I think?)

Heres a brief history of the demise of the gold standard. By the way did I mention that we are all screwed. Sorry...just saying.


The International Monetary Fund

At the conclusion of World War II, the United States and Great Britain created the International Monetary Fund (IMF). That body set a "value" of $35 per ounce for gold. Other countries participating in the IMF were required to maintain their currencies at a specified parity against the dollar, thereby tying much of the world to a dollar standard that was in turn tied to a gold standard.

That system, however, fell apart after debilitating inflation in the 1960s caused a run—as countries began exchanging dollars for gold from the U.S. Treasury when world gold prices exceeded the $35.00 value set under the IMF agreement—on U.S. gold stocks. President Richard Nixon announced on August 15, 1971, that the United States would no longer exchange dollars for gold under the IMF standard. Within two years, currency exchange rates were allowed to float against each other. These floating currency rates are set by market forces rather than the artificial parity rates set by the IMF, and change constantly in foreign exchange transactions conducted through banks and currency dealers. In 1975 the IMF eliminated gold as the basis for international monetary standards, and two years later, the prohibition against gold clauses was repealed, allowing private sales of gold.

[rgrokelley]

It is no secret that Obama's role models as the president is Lincoln and FDR. Great. One was so fucked up that he made half the country split apart due to his viewpoints, and then he led the United States into the bloodiest war in our history.

The other was so fucked up that he took a simple recession, and turned it into the greatest depression we've ever had due to his socialist policies.

Anyway, one of the things Roosevelt did was ban anyone from buying gold. He did this because folks who bought gold didn't need to rely on the government, or their private owned bank, the Federal Reserve, for their specie.

Gold really hasn't increased at all. Anything you could buy for an ounce of gold in the 18th century, you can buy now. Compare the cost of land, food, or other materials, and if there isn't a shortage (supply and demand), then it pretty much costs the same amount now in ounces of gold.

Paper money is pretty much a sham and the founding fathers said so. Paper money is merely an IOU for real money.

So, watch for Obama to try to outlaw gold and silver as it becomes more valuable than anything he can offer.

FDR would be proud.

[RRDTm3]

We are fucking doomed.

No vote on this shit either.

The Federal Reserve is a private bank, with a government sounding name. They print the money used the United States, so they have a ton of power. They can lower or raise how much the dollar is worth by just printing more. Years ago they assumed control of all the gold that was once in Fort Knox, to use as collateral. No Congressman can get them to audit it so no one knows where the heck it is now. The only Senator that actually tried was Ron Paul, but he is just one guy and got nowhere.

Fucking amazing.

Which leads us to .'s favorite flick............http://www.zeitgeistmovie.com/" onclick="window.open(this.href);return false;

[Ranger Bill]

We are fucking doomed.

No vote on this shit either.

We are not doomed. We will survive. But the price we are going to pay is going to be huge.

[Jim]

We are fucking doomed.

No vote on this shit either.

We are not doomed. We will survive. But the price we are going to pay is going to be huge.

Absolutly. Hope you have some gold & Silver stashed away.

[Oto-Man]

We are fucking doomed.

No vote on this shit either.

We are not doomed. We will survive. But the price we are going to pay is going to be huge.

Absolutly. Hope you have some gold & Silver stashed away.

Bill and Jim are both absolutely right...

We will survive...but the level (read as quality of life) of survival is going to be a very individual thing. More multimillionaires were created during the Great Depression (We should now call that GD1--since I feel GD2 is en route) than at any other time in our history...we also had more tragedy and hell for more Americans that at anytime prior or since...

We, as a people, will come out of it...but I can't even fathom what the country will look like 3...5...10 years from now...

Personally, my biz. is up...way up...I am doing better now financially than I have is 15 years, but I do not think it is going to continue (I hope it does).

The way I see it, I am lucky to even have a job right now...

Hope for the best...prepare for the worst...kinda simple...

If it recovers...great...if it doesn't for a while, and you are ready...you will be fine...


oto-out