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As Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy
Posted By admin On September 14, 2012 @ 2:21 am In Featured Stories,Money Watch,Tile | Comments Disabled
We predicted last week  that Bernanke would launch QE3 this week.
Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per month  …indefinitely.
Bernanke claims that the main justification for QE3 is to boost employment. This is slightly ironic, since Bernanke’s policies are largely responsible for creating high unemployment in the first place .
This is in addition to numerous other easing programs. As CNBC notes :
In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.
“These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative,” the Fed statement said.
And the Fed isn’t stopping there :
“There’s strong hints that they’ll do Treasurys next,” Joe LaVorgna, chief economist at Deutsche Bank Advisors, said in a phone interview from London. “They’re pulling out all the stops to try to get this economy to gain some traction and, most important, to get unemployment down.”
As we said in 2008: welcome to the Fed’s Weekend at Bernie’s .
P.S. Yes … if you’re a homeowner, you will probably want to re-fi.
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URLs in this post:
 predicted last week: http://www.washingtonsblog.com/2012/09/the-fed-is-expected-to-launch-qe3-next-week.html
 $40 billion dollars of mortgage-backed securities per month: http://www.cnbc.com/id/49018964
 just another bailout for the big banks: http://www.washingtonsblog.com/2012/03/big-banks-continue-to-suck-at-the-government-teat-with-never-ending-stealth-bailouts.html
 we would be out of this economic slump by now: http://www.washingtonsblog.com/2009/09/steve-keen-out-thinks-larry-summers.html
 responsible for creating high unemployment in the first place: http://www.washingtonsblog.com/2011/07/confirmed-federal-reserve-policy-is-killing-lending-employment-and-the-economy.html
 try to artificially prop up asset prices: http://www.zerohedge.com/news/punchline-his-own-words-bernanke-advocates-blowing-asset-bubbles-antidote-depression
 proven: http://www.washingtonsblog.com/2009/03/the-geithner-summers-bernanke-plan-to-prop-up-asset-prices-has-failed.html
 absolute failure: http://www.washingtonsblog.com/2009/08/bis-slammed-federal-reserve-and-other-central-banks-for-blowing-bubbles-and-then-using-gimmicks-and-palliatives-which-will-only-make-things-worse.html
 despite widespread assumptions: http://www.washingtonsblog.com/2012/05/liberal-stimulus-draconian-austerity-two-sides-of-the-same-coin.html
 the Fed’s Weekend at Bernie’s: http://www.washingtonsblog.com/2008/09/the-feds-weekend-at-bernies.html
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