Monday, November 8, 2010

Dallas Fed Governor on Richard Fisher on QE 2.0

By now, anybody who hasn't woken up from their American Idol-induced zombie status knows that Fed Chairman Bernanke last week announced US Treasury bond purchases of approximately $75 billion/month until the end of June, 2011--or $600 billion.

Which makes Dallas Fed Governor Fisher's proclamation that the Fed will actually purchase US Treasuries at a pace of $110 billion/month extremely curious and alarming. Did Bernanke just commit perjury before the world? In case the website is altered for an "oversight", I have included the following text. And if my blog gets taken down, well, it's not like it hasn't occurred before at "strategic times." I hear black helicopters above.

My perspective, as with those of all other members of the FOMC, was given a thoughtful and fair hearing at the table. After deliberation, the majority of the committee concluded that under current and foreseeable conditions, the better approach was to purchase $600 billion in Treasuries between now and the end of the second quarter of next year, on top of the amount projected to replace the paydown in mortgage backed-securities. The math of this new exercise is readily transparent: The Federal Reserve will buy $110 billion a month in Treasuries, an amount that, annualized, represents the projected deficit of the federal government for next year. For the next eight months, the nation’s central bank will be monetizing the federal debt.

OK, let's do the math: 8 months x $110 billion = $880 billion. Not $600 billion. The Fed isn't just lying to us anymore behind fancy phrases and shadowy statistics. THE FED IS OUTRIGHT LYING TO OUR FACES.

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