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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: ggersh who wrote (44989)	4/11/2012 7:12:09 AM
From: Real Man	Read Replies (1) \| Respond to of 71456

Yeah, the prime example is QE2 lite. In layman terms, if the mortgage (MBS) is paid in full by the home ower ( typo intended), the Fed uses the money to rotate to treasuries. If not paid, the Fed PRINTS the principal and interest on that defaulted mortgage, then buys the treasuries with it! According to the Fed, the second scenario never happens ( yet we do know that a lot of properties the fed so owns are in foreclosure), because their crappy MBS are AAA -vbg- In the first process the Fed does a coupon pass and new money is NOT printed. In the second process the mortgage in default gets monetized and money is printed. The accountability of the Fed is such that it is not possible to determine exactly when the use of electronic money printer is triggered.