“To provide support to mortgage lending and housing markets, and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt.”
Translation:
"
To provide support to mortgage lending and housing markets,"
To provide cover for insolvent lending institutions, who cannot loan out the trillions we've already handed them, because:
1. They need it to cover the
smoking hole where their balance sheet used to be, and...
2. To assure them that continuing their unsafe, idiotic program of loaning to anything warm and walking,
We're going to give them Trillions more!
"and to improve overall conditions in private credit markets,"
Because we have to make it look like the only way out of this is to create more debt, not get rid of bad debt, we are going to keep up the facade that the problem lies somewhere else besides insolvent banks.
So....
"
the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt."
They are going to hand more of our grandchildren's money to these banks, making it "our debt" so they can do it all over again.
It didn't work, it won't work, and never will work, because it's driving the wrong end of the machine.
Plus, even former Fed Chairman Alan Greenspan is beginning to panic about the dollar’s decline, warning that total U.S. private and public debt — now at 84% of GDP and still soaring — is “very dangerous” and threatens both long-term Treasuries and the dollar.
Insanity.
First off; 84% of GDP.
Bring that home for a sec...
Try to get along when you make $1,000 a week, and your credit card minimum payment equals $840 a week. Then someone comes along and says the way out, is to borrow
more!
And you just nod your head because he is an "expert".
The credit markets are dead for two reasons.
1. see the sentence above about a smoking hole.
2. Joe average is the only one in this food chain who is doing
exactly the right thing!
He is staying home.
Not borrowing more.
Paying off what debt he has.
Maybe saving a little, if he can.
Bernanke is a madman, doing the wrong things, and frantically waving his hands because it isn't changing anything. Telling folk it is, in the face of things getting worse. The last thing he needs is more money to do it with. What he needs is a rubber room and a Thorazine drip.
Fred