No need to stop printing cash as far as Ben Bernanke is concerned today's Federal Reserve Open Market Committee statement reads:
To support a stronger economic recovery and to help ensure that inflation, over
time, is at the rate most consistent with its dual mandate, the Committee will
continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45
billion per month. The Committee is maintaining its existing policy of
reinvesting principal payments from its holdings of agency debt and agency
mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
Which translates into a continuation the $40 billion of mortgage backed securities and $45 billion of Treasury Bond purchases per month under it Quantitative Easing 3 scheme yep $85,000,000,000 EVERY MONTH or $271 per person every month (includes printing for the kids!). Ben Bernanke is just printing the cash because ultimately its the easiest thing to do (After all congress hates raising raising taxes and cutting government expenditure involves pain today for gains in the future). Ben prefers the easy route today for a huge mess in the future when he won't be in office. The bond market bubble is gonna blow up once the markets start realising all this printing leads to inflation requiring higher bond yields not lower bond yields...Below a nice video from Reuters on the Fed's dodgy balance sheet explosion.
To support a stronger economic recovery and to help ensure that inflation, over
time, is at the rate most consistent with its dual mandate, the Committee will
continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45
billion per month. The Committee is maintaining its existing policy of
reinvesting principal payments from its holdings of agency debt and agency
mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.
Which translates into a continuation the $40 billion of mortgage backed securities and $45 billion of Treasury Bond purchases per month under it Quantitative Easing 3 scheme yep $85,000,000,000 EVERY MONTH or $271 per person every month (includes printing for the kids!). Ben Bernanke is just printing the cash because ultimately its the easiest thing to do (After all congress hates raising raising taxes and cutting government expenditure involves pain today for gains in the future). Ben prefers the easy route today for a huge mess in the future when he won't be in office. The bond market bubble is gonna blow up once the markets start realising all this printing leads to inflation requiring higher bond yields not lower bond yields...Below a nice video from Reuters on the Fed's dodgy balance sheet explosion.
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