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Die, Bank of America

Discussion in 'Sports and News' started by hondo, Jun 18, 2013.

  1. The Big Ragu

    The Big Ragu Moderator Staff Member

    Our Federal Reserve has more than $3.5 trillion in assets on its balance sheet that it will never be able to unload, and it has been creating false prosperity and several new asset bubbles -- similar to what led to the housing collapse the Fed helped cause in the first place.

    Among it, is $1.2 trillion in mortgage-backed securities that the Fed has been buying up as part of QE3. It is the biggest holder of government-backed mortgage bonds -- and it is singlehandedly keeping interest rates artificially fixed low by trying to stoke "economic recovery" that has not been reaching main street five years later anyhow. The money it is creating out of thin air has simply been propping stocks up and creating a false prosperity in the housing market. We still haven't replaced half the jobs lost during the collapse -- REAL economic recovery.

    The real purpose here, though, really has little to do with economic recovery. It is to try to inflate away the debt created by our politicians through all the corruption -- with more corruption. Destroying our currency. Our debt is three times what it was before the housing crisis, but our interest government payments are the same thanks to our central bank selling out our future. It is playing a reckless game of trying to inflate away the spiraling debt by loading up its balance sheet with bonds that there is no market for without them propping up these markets and keeping interest rates low to allow your Congressman to keep at it. The minute they step out -- or this reckless game catches up to them (and it has to at some point), interest rates are going through the roof, and we will have a whole new collapse with our government finally dealing with a serious fiscal crisis we can't kick down the road anymore.

    You CAN NOT keep interest rates at zero artificially and be out there buying $85 billion in bonds every month to trying to suppress rates, WITHOUT creating inflation -- either inflation that is not being measured by the CPI or a shitstorm that is going to be unleashed on the country when we have to finally pay the piper.

    Keep in mind, the Fed does not hedge that MBS position. When (and it will be a matter of when -- regardless of whether a Fed Chairman wants it or not) rates spike, it is going to be a mess. The Fed now owns more than 20 percent of all agency mortgage bonds. A decade ago it owned zero. When the market implodes, it is going to be holding the bag and we will all pay the price.
     
  2. LongTimeListener

    LongTimeListener Well-Known Member

    I agree. I think. :)
     
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