Federal Reserve Turns on Another Money Faucet
Federal Reserve to start buying $60 billion of USA Treasury Bills per month at least through the second quarter of 2020.
Some people would call this QE 4:
Quantitative easing: is a fairly recent “unconventional” (not natural) monetary policy in which a central bank purchases government securities or other securities with funds they print directly from the market in order to increase the money supply and encourage lending and investment.
The original announcement by the NY Fed is currently not available as their website went down for maintenance—however a Canadian Youtuber (the Money GPS) took a snapshot before the announcement became unavailable.
These funds are in addition to the Fed having to pump 35-75 billion per day in the USA bank overnight Repo market. The Fed has also just said that they will extend the emergency (my word) overnight repo cash infusions through at least January.
QE History:
Since the last recession the Fed has had to print and purchase 4 Trillion USD. You can find this yourself by searching for:
“FRED — Assets Total Assets: Total Assets (less Eliminations from Consolidation)”
One should notice since the last big recession in 2008 the Fed has printed dollars and then used that money to purchase 4 Trillion (with at “T”) dollars worth of assets (mostly US Treasury bonds). This printing of dollars also mirrors the rise in US stock markets and property values over the same time period. This strongly hints that the rise in property values and stocks during that time is not a natural rise due to market forces or business activity, but instead at least partly due to currency debasement/inflation and corporate loans/stock buybacks.
FYI: The other 120+ central banks in the world have likely done the same as the USA’s FED since the GFC, the majority of the world’s central banks move in relative similar manners. However, in many cases the interest on their local government bonds might even have NEGATIVE yields (interest rates) and thus why they also purchased US stocks. (See my previous article https://kenburridge.com/stock-portfolios-and-retirement-accounts-overvalued/).
References:
The Money GPS
NY Fed Statement
Federal Reserve Bank of New York
Operating Policy
Statement Regarding Treasury Bill Purchases and Repurchase Operations
October 11,2019
Board of Governors of the Federal Reserve System
Press Release
Statement Regarding Monetary Policy Implementation
October 11,2019
Disclaimer: This post is for informational and entertainment purposes only— it is not financial advice or is in anyway intended to provide any financial recommendation.
“Independent News Reporting by Ken Burridge”
Independent journalist, blockchain and sustainability activist, EV of the Year Judge, photographer, and author that has published over 1500 articles. Mr Burridge’s travels have taken him to over 40 countries and 300+ major cities. He is originally from the USA, but has been residing in Australia for the last eight years. Connect to Ken Burridge on: Twitter, steemit, facebook, minds, Linked in, Uptrennd, official website
