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Bernanke: But This One Goes to Eleven!



March 18, 2009 – Comments (6)

If crappy home loans got us into this mess (along with unrestrained consumer lending, now going bad at a rate not seen for decades) then surely the way out is...

More crappy home loans and more crappy consumer lending! (Along with purchases of treasuries... nothing like supporting the latest bubble!)

The Fed also said it will buy more mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac to help that battered market. The central bank will buy an additional $750 billion, bringing its total purchases of these securities to $1.25 trillion. It also will boost its purchase of Fannie and Freddie debt to $200 billion.

"This is not only going to keep mortgage rates low for a long period of time," said Greg McBride, a senior financial analyst at "The mere announcement may produce a honeymoon effect and bring mortgage rates down to even lower levels in the coming days."

It's clear Bernanke and co have zero ideas. I wonder how much time they spend praying that the same old snake oil will work a miracle this time around...

6 Comments – Post Your Own

#1) On March 18, 2009 at 4:33 PM, cbwang888 (25.43) wrote:

USD (currency) is doomed.

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#2) On March 18, 2009 at 4:52 PM, TDRH (96.53) wrote:

"But This One Goes to Eleven!" "When you need that little 'extra'."

Spinal Tap reference is classic!  

So interest rates drop......eventually they will rise with expected inflation/risk and people will be stuck in homes that they can only sell for less than they paid for.    Prices need to come.

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#3) On March 18, 2009 at 5:07 PM, whereaminow (< 20) wrote:

Inflation is a systematic (and unethical) policy of modern governments. It's even nicer for them when they can find a reason to inflate that is different than the standard, "we want to rob your wealth and give it to our bodies."

Inflation is a government policy. It's not some crazy result of misguided spending. It's not a rise in prices. That's the result of inflation.

Inflation is systematic debasement of the currency. It is purposeful action.  The people who get to use the new money first benefit (The Cantillon Effect) as the money goes through the economy in steps.

You, at the end, the consumer, get the short end. The employee gets the worst of it, as wages rise last. Double whammy!

The politicians, politically connected, the banks - they get to use it first. Then they keep inflating, and getting richer and more powerful.

This latest move is not a new policy. It's worse. We now have a culture that looks to inflation as a solution! Holy cow. How dumb must we have become to confuse evil with good?

David in Qatar


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#4) On March 18, 2009 at 5:08 PM, whereaminow (< 20) wrote:

LOL, "give it to our buddies."

If Bernanke could give it to his body, he'd be pretty buff by now :)

David in Qatar

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#5) On March 19, 2009 at 3:38 AM, AntiRL (< 20) wrote:



See that Smile.  It belongs to the Bond King himself Bill Gross who is Laughing his ass off to the bank.   

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#6) On March 20, 2009 at 5:27 AM, jester112358 (28.09) wrote:

Excellent points,  deflation is only a "threat" to the debtor/political class and those foolish enough to loan them money with no collateral.  For savers and people who actually own their home, car etc  (like myself), it just means your accumulated earnings will actually have future value.  That's something that makes a lot of sense-thus is anathema to government.  Government is the biggest deadbeat of all and its greatest fear?  It will get cut off from the gravy train by a refusal of the private market to buy its debt.  This is what is going to happen to the feds and is already happening to cities and states.  However, this bondholders strike may very well be precisely the negative feedback required to get the real economy functioning.

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