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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (112153)	4/5/2012 9:16:51 PM
From: RetiredNow	Read Replies (2) \| Respond to of 149317

There are multiple ways to stimulate the economy: deficit spending, ZIRP, Treasury and Mortgage bond purchases by the Fed, etc. They aren't the same thing, but they all amount to artificial stimulus that distorts pricing signals and results in malinvestment. And btw, the Fed bought up 61% of all Treasury debt in 2011. Treasury debt is sold to finance the deficit. When the Fed purchases Treasury debt, the way it works is they credit the Federal Reserve banks with money created out of thin air and charge them zero percent interest. The FedRes banks use that free money to buy Treasuries and pocket the spread between the zero they pay on the loan and the 2-3% coupon on the Treasury. This is tantamount to the Fed printing money to finance the deficit. Do you understand the consequences of this? Surely, you must understand that this is not a good thing and that our whole economy and all the citizens within will pay a very large price for this for decades to come.