The Federal Reserve Bank has just announced that it will be spending upwards of $ 40 Billion per Month on a Going Forward Basis, for an Indefinite Future, purchasing ,,Mortgages'' from ,,Banks and Financial Institutions.'' This, in the Opinion of the Federal Reserve Bank, is going to stimulate the Economic Recovery in the United States because the Economy has been ,,growing'' according to the Chairman of the Federal Reserve, Mr. Ben Bernanke, at an ,,Unsatisfactory Rate.''
http://www.nytimes.com/2012/09/14/business/economy/fed-announces-new-round-of-bond-buying-to-spur-growth.html?_r=1&nl=todaysheadlines&emc=edit_th_20120914
First of all, it should be noted that a reasonable Assumption would be, the Decision, as ratified by the Federal Reserve Bank is the Brainchild of Mr. Bernanke, who was a Professor of Economics at Princeton University specializing in the 1929-1933 Great Depression. Mr. Bernanke, we have noted elsewhere in this Column, has just returned from a Conference in Jackson Hole, Wyoming, a Place renowned for its Beauty and known to most Americans from Photographs and Motion Pictures.
http://economywatch.nbcnews.com/_news/2012/09/13/13846702-bernanke-aims-at-job-market-in-latest-bid-to-revive-faltering-recovery?lite
The Stock Market reacted jubilantly to the Fed's Decision by immediately jumping more than 200 Points to an All Time High. Some Financial Analysts characterized the Decision as a ,,Sugar Pill for the Stock Market.'' Others, characterized the Short Sightedness of Mr. Bernanke's Decision and the Disconnect which appears to exist between his Area of Academic Specialization and the Decisions which he appears to be making. It should be noted, this Action comes in the Heels of the Fed's Program of ,,Quantitative Easing'' a Term coined by Mr. Bernanke as well. The Results of the Quantitative Easing Plan have been described by many as highly questionable in Value.
These Actions could remind one of some of the Words used by former Secretary of the Treasury Henry Paulsen, of Goldman Sachs Fame, who alluded, no, not alluded, emphasized that the Fed had at its Disposal ,,Tools'' (words reminscent of some Kind of an Auto Mechanic or Woodworker's Toolbox) in order to handle Financial Situations.
Those of us who are far less well versed than Mr. Bernanke on Economic Policy Matters can likely make a following simple Arithmetic Calculation: the Money that the Fed would be giving Banks, in exchange for purchasing Mortgages of Questionable Value (most likely, at full Face Value or possibly even at a Premium - Hey! It's not easy to spend $ 40 Billion per Month when you've got only one Month to do it!), that Money actually amounts to roughly $ 1.250,00 for every Man, Woman and Child living in the United States, rich or poor, young or old, in one Word, everyone. Unlike Banks, many of these People would spend their Money, creating Jobs, rather than use them for questionable Financial Investments, Executive Compensation or ,,Conferences'' in Exotic Locales, such as Jackson Hole, Wyoming.
Of course, everyone would have to sign a Promissory Note (at near Zero Interest Rates, as the Banks would be doing) to pay the Money Back and those who can, will, just as the Banks would; those who cannot, will not, just as the Banks would not.
http://www.welt.de/finanzen/article109233809/Boersianer-surfen-auf-Monster-Geldwelle.html
Interestingly, both Presidential Candidates did not express any Concerns or Opposition to Mr. Bernanke's Decision; true, Mr. Bernanke can act independently, without Accountability to the President; however, in the Absence of the Expression of an Opinion by the President or his Opponent, Mr. Bernanke may well take such Silence as a taciturn implicit ,,Carte Blanche'' that his Decision is an appropriate one. We are wondering if Mr. Bernanke made the Calculation, or Analysis, whether seeking an alternative Method of spending $ 40 Billion Monthly (assuming that such Money should be spent), would not do more to ,,Stimulate the Economy and create Jobs'' rather than a Plan to purchase Mortgages, including potentially worthless Mortgages, from Banks.
http://www.nytimes.com/2012/09/14/business/economy/fed-announces-new-round-of-bond-buying-to-spur-growth.html?_r=1&nl=todaysheadlines&emc=edit_th_20120914
First of all, it should be noted that a reasonable Assumption would be, the Decision, as ratified by the Federal Reserve Bank is the Brainchild of Mr. Bernanke, who was a Professor of Economics at Princeton University specializing in the 1929-1933 Great Depression. Mr. Bernanke, we have noted elsewhere in this Column, has just returned from a Conference in Jackson Hole, Wyoming, a Place renowned for its Beauty and known to most Americans from Photographs and Motion Pictures.
http://economywatch.nbcnews.com/_news/2012/09/13/13846702-bernanke-aims-at-job-market-in-latest-bid-to-revive-faltering-recovery?lite
The Stock Market reacted jubilantly to the Fed's Decision by immediately jumping more than 200 Points to an All Time High. Some Financial Analysts characterized the Decision as a ,,Sugar Pill for the Stock Market.'' Others, characterized the Short Sightedness of Mr. Bernanke's Decision and the Disconnect which appears to exist between his Area of Academic Specialization and the Decisions which he appears to be making. It should be noted, this Action comes in the Heels of the Fed's Program of ,,Quantitative Easing'' a Term coined by Mr. Bernanke as well. The Results of the Quantitative Easing Plan have been described by many as highly questionable in Value.
These Actions could remind one of some of the Words used by former Secretary of the Treasury Henry Paulsen, of Goldman Sachs Fame, who alluded, no, not alluded, emphasized that the Fed had at its Disposal ,,Tools'' (words reminscent of some Kind of an Auto Mechanic or Woodworker's Toolbox) in order to handle Financial Situations.
Those of us who are far less well versed than Mr. Bernanke on Economic Policy Matters can likely make a following simple Arithmetic Calculation: the Money that the Fed would be giving Banks, in exchange for purchasing Mortgages of Questionable Value (most likely, at full Face Value or possibly even at a Premium - Hey! It's not easy to spend $ 40 Billion per Month when you've got only one Month to do it!), that Money actually amounts to roughly $ 1.250,00 for every Man, Woman and Child living in the United States, rich or poor, young or old, in one Word, everyone. Unlike Banks, many of these People would spend their Money, creating Jobs, rather than use them for questionable Financial Investments, Executive Compensation or ,,Conferences'' in Exotic Locales, such as Jackson Hole, Wyoming.
Of course, everyone would have to sign a Promissory Note (at near Zero Interest Rates, as the Banks would be doing) to pay the Money Back and those who can, will, just as the Banks would; those who cannot, will not, just as the Banks would not.
http://www.welt.de/finanzen/article109233809/Boersianer-surfen-auf-Monster-Geldwelle.html
Interestingly, both Presidential Candidates did not express any Concerns or Opposition to Mr. Bernanke's Decision; true, Mr. Bernanke can act independently, without Accountability to the President; however, in the Absence of the Expression of an Opinion by the President or his Opponent, Mr. Bernanke may well take such Silence as a taciturn implicit ,,Carte Blanche'' that his Decision is an appropriate one. We are wondering if Mr. Bernanke made the Calculation, or Analysis, whether seeking an alternative Method of spending $ 40 Billion Monthly (assuming that such Money should be spent), would not do more to ,,Stimulate the Economy and create Jobs'' rather than a Plan to purchase Mortgages, including potentially worthless Mortgages, from Banks.
