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Thread: Federal Reserve Plans to Buy Government Debt

  1. #21
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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by BulletWounD View Post
    No. It's backed up soley by the laws of supply and demand.
    Well, the purchasing power of the said note.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

  2. #22
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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by Goldenboy219 View Post
    Yes, but it is counter productive for the FRB to enact policy that would be harmful (in the long run) to their balance sheet, and thereby association, the US economy itself.
    This is true if all the share holders, profiteers, etc are American. But maybe not so much if they're foreign, right?

    I really do not care for them either, but regardless of my partisan sentiment, they are a big player in the markets (for better or worse) and we now are dependent on them to guide the economy (for the time being). Deflation is much nastier than inflation; hyperinflation cannot exist in the US unless they begin buying $10's of trillions of assets in a short time.
    I just think their power is perhaps too big and unchecked. If they can "fix" the economy they can also purposely "break" the economy if there was some incentive to do so. If there is no foreign interests or shareholders tied to the federal reserve then there's not as much reason to worry, but do we know if there are foreign interests involved?

    It does allieve them of political control. Congress does not know how to guide an economy.
    Maybe not but it's dangerous to just "take orders," and allow a virtually private bank to own our government debt.


    To be honest, i am actually surprised they had the balls to go all in at this stage. I have to applaud Bernanke, as he fuels up his fleet of helicopters ready to dump liquidity at any and all costs.
    It seems like all the financial folks are surprised which is why it's worrisome.
    Last edited by talloulou; 03-19-09 at 03:36 PM.

  3. #23
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    Re: Federal Reserve Plans to Buy Government Debt

    This is why running of huge deficits unless its absolutely required should never happen. We shouldn't have been going into a crisis with debt. Barring a crisis like this or WW3, there is no excuse not to at least have a balanced budget. This is a where decades of deficit spending leads us.

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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by rathi View Post
    This is why running of huge deficits unless its absolutely required should never happen. We shouldn't have been going into a crisis with debt. Barring a crisis like this or WW3, there is no excuse not to at least have a balanced budget. This is a where decades of deficit spending leads us.
    Don't forget, DEBT IS WEALTH.

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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by rathi View Post
    This is why running of huge deficits unless its absolutely required should never happen. We shouldn't have been going into a crisis with debt. Barring a crisis like this or WW3, there is no excuse not to at least have a balanced budget. This is a where decades of deficit spending leads us.
    Right.

    Why would we sell our government debt to the fed reserve? If we're in debt then we're in debt. So the feds buy some of the debt and do they give the money to our government? Then the government presumably uses the money to pay off debt?

    How does the fed buying government debt flood the economy with money?

  6. #26
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    Re: Federal Reserve Plans to Buy Government Debt

    It's odd to watch a country I once thought to be invincible fall apart around me.
    "An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it." - Gandhi

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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by EgoffTib View Post
    It's odd to watch a country I once thought to be invincible fall apart around me.
    The illusion of invincibility was one that needed to be shattered at some point in time. It's definitely in our best interest.

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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by EgoffTib View Post
    It's odd to watch a country I once thought to be invincible fall apart around me.
    I bet people said the same thing at the onset of the great depression.

  9. #29
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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by BulletWounD View Post
    The illusion of invincibility was one that needed to be shattered at some point in time. It's definitely in our best interest.
    Quote Originally Posted by winston53660 View Post
    I bet people said the same thing at the onset of the great depression.
    Agreed. Being only 19, this kind of collapse is better preparing me to deal with problems in the future and taking away what little "ignorant innocence" I had left about our country.
    "An error does not become truth by reason of multiplied propagation, nor does truth become error because nobody sees it." - Gandhi

  10. #30
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    Re: Federal Reserve Plans to Buy Government Debt

    Quote Originally Posted by EgoffTib View Post
    Agreed. Being only 19, this kind of collapse is better preparing me to deal with problems in the future and taking away what little "ignorant innocence" I had left about our country.
    We are a strong industrious people we will get through this.

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