To: ahhaha who wrote (404379 ) 5/8/2010 8:12:08 AM From: Real Man Respond to of 436258 Well, I tried to learn, but the answer was too complicated for me to grasp. -g- My only disagreement was about the extent of Fed MBS and Agency operations, their buying them permanently for their own account as part of Quantitative Easing policy, just as they stated they did. I still don't understand why permanent buying of treasuries for SOMA is printing, while permanent buying of MBS or Agencies for SOMA is not electronic printing. Nothing says this is temporary. IMHO if the Fed creates digital money in it's own account to buy shit down the road, while that shit stinks and is worthless, they did print. I saw the only difference in your claim that this shit does not really stink, and they will dispose of it properly in due time. You also claimed this will be done in 1 to 28 days, which is wrong. Maybe it will be done eventually, which is what Ben keeps claiming, but I doubt it. That shit stinks really bad, and cannot be sterilized. Now shit got transferred on the government account, so the government will blow. The bag of shit will explode. That's SHTF situation, and that's how really Fed fighting "outliers" ends. The first "outlier" was 1987 crash, when the "PPT" and Greenspan put (the machine to fight outliers) were created. They were utilized for 23 years to make these markets synthetic or Gaussian, shave off the outliers (which are a natural part of free markets), and thus create a big one eventually. It happened in 2008. That required over 20 Trillion in guarantees and 1.75 Trillion in new money. Now the government blows up and we will all be swimming in shit. -NG- Why? Because the shit did not disappear. It sits on the govt. account now. The claim that this does not affect the sovereign credit rating of the United States is wrong. The amount of shit is huge. However, 3 rating agencies will always rate it AAA until it actually blows up, just as they did with subprime bonds. Printing has similar effects on sovereigns, it was concealed by the Fed. If the Fed prints to buy treasuries from banks, not on auction, nothing happened. If the Fed prints to buy MBS and Agencies, so banks can clean up reserves for freshly minted bogus AAA treasuries, nothing happened. WRONG! Something did happen.