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To: Archie Meeties who wrote (121532)	6/9/2009 2:32:38 PM
From: axial	Respond to of 206191

Fair enough Arch. That view also qualifies, as everyone wonders whether the glass is half-empty or half-full. As to whether additional money is being created (a separate question) the Fed itself stated "Yes", and attempted to reassure all that when inflation begins to be a problem, it will then withdraw liquidity from the economy: thus preventing hyperinflation. If true, that will stall economic growth, as interest rates rise in what is now a credit-based economy with huge debt. Jim

To: Archie Meeties who wrote (121532)	6/9/2009 3:13:25 PM
From: 8bits	7 Recommendations Read Replies (1) \| Respond to of 206191

The government is not printing money, even though this is what you'll might hear in gold bug blogs, faux news, or the internet. It is issuing debt, and people are buying it By definition the Fed is monetizing debt which for all intents and purposes is printing money. However the important question would be how much are they monetizing and how much is this offset by asset deflation. en.wikipedia.org "Debt monetization occurs when a nation's central bank (for example, the Federal Reserve in the United States) "buys" government bonds. [1] If a government's expenses exceed its tax revenue and nothing is done, the government will draw resources (capital) out of the private market. Since there is a limited amount of capital available in the market, there will be less available to fund business growth if the government takes out a substantial portion. If the debt is monetized, the capital is thereby returned to the private market." washingtonpost.com "The decision by the Fed to buy government bonds and mortgage-related securities is designed to lower borrowing costs for home mortgages and other types of loans, thereby stimulating economic activity. The central bank, effectively, will print more money to pay for the purchases." ft.com "The Federal Reserve on Wednesday stunned investors by announcing plans to buy $300bn of US government debt, triggering a plunge in bond yields and the dollar. In a further display of aggression, the US central bank also said it was more than doubling its purchases of securities issued by housing giants Fannie Mae and Freddie Mac to $1,450bn. It said it now expected to keep interest rates near zero for an “extended period” of time" The rise in asset classes due to montezition, whether is it commodities, stocks, houses, etc. is classic economic behavior.

To: Archie Meeties who wrote (121532)	6/9/2009 3:16:52 PM
From: 8bits	4 Recommendations Respond to of 206191

Here's an interesting question: What is the ROI on the investments made by the issuance of treasuries? For AIG, so far nothing. Also there has been a fair amount of money thrown at the FDIC. The TARP money is being paid by higher fees and issuing stock in the secondary market.

To: Archie Meeties who wrote (121532)	6/9/2009 4:31:27 PM
From: JimisJim	Respond to of 206191

Archimedes: agreed... debt issuance is not the same as printing money... but you have to make allowances for people who might think they are the same because on 60 Minutes Sunday night, there was Ben being asked if he's printing money and he replied that in effect he was... then explained that actually he was simply entering numbers in a computer that increased the $$$ deposit with the FED and that it was "just like printing money." Only it isn't... 60 Minutes then added to the confusion by cutting immediately to video of $5 bills being printed while the voice over said something like the FED generates a profit for the US Tsy... Instead of explaining the very important and tricky concept of what Ben had just said about simply entering numbers in a computer to increased deposit balances with the FED vs. printing money, the story simply cut to a completely different aspect of whatever the story was about (I missed the first part and at this point got fed up -- pun intended -- and switched channels to the time and temperature channel which was both more useful and more entertaining. Jim

To: Archie Meeties who wrote (121532)	6/9/2009 5:13:28 PM
From: SuperChief	3 Recommendations Read Replies (1) \| Respond to of 206191

>The government is not printing money What the heck is the difference between printing and creating when the created money will NEVER be paid back? Cut from today's Mogambo Guru: An upshot is that all of this “quantitative easing” of SDMM, and the reference to the anagram, is that most of the money that the Fed is creating is used to buy government debt! This increases the national debt, so it is not surprising that Agora Financial’s 5-Minute Forecast reports, “Your family’s share of the government debt is now over half a million dollars. A record $546,668, to be exact”! Naturally, I am thinking that at 5% interest, each family owes, in addition to the $546,668 principal, a princely $27,333.40 in interest this year alone! Fortunately for the government, they do not have to actually tax each family $27,333.40 this year because the government will just sell more Treasury debt,bought by the Federal Reserve with money they created just for the purpose. Unfortunately, the family will pay it anyway, except in the form of higher prices as all this new money creates inflation in consumer prices! The 5 says that they were quoting a USA Today study, which claims that each American family’s share rose 12% in 2008. That’s $55,000 in new government debt last year for every U.S. household – thousands more than the median household annual income.” Perhaps as a result of all this bankrupting idiocy, the London Times reported that Treasury Secretary Geithner told the students at Peking University during his visit to China that “we believe in a strong dollar,” and that all the trillions of dollar’s worth of US debt owned by the Chinese “are very safe.” If he had been addressing the usual kind of American morons that big-shot officials usually address, like the Economics Club of New York, Princeton, Harvard or Congress, then the audience would have sat there, dumbfounded, before applauding politely and saying, “Duuuhhh! Okay!” But in China, Geithner’s speech was greeted with laughter! Hahaha! This shows that the Chinese are very perceptive and not stupid, in contrast to the USA, as this is the kind of response that it really, really, really deserves. If Mr. Geithner really wanted to act smart, he would ask the Chinese why they have suddenly added their growing hoard of gold to their money supply. And if the Chinese wanted to be gracious hosts, they would have told him. If he had asked me why I am buying gold, I would have told him, “Because this investing stuff is easy when a Federal Reserve creates 13% of GDP so that the federal government can spend a third of GDP! Whee!”