U.S. FEDERAL RESERVE MAY BUY U.S. TREASURIES
December 2nd, 2008This doesn’t make any sense. The U.S. Government authorizes the Fed to create money out of thin air, which it will then use to buy up the debt of the U.S. Government that nobody else wants?
Is anyone who is currently holding U.S. Treasuries even reading the news? The auctions are going to fail, so the debtor is just going to snap his fingers and create the money to buy the debt that nobody else wanted to buy?
How does the dollar not collapse on this?
The Bloomberg piece focuses on similarities between monetary policies in the U.S. and Japan, and highlights a couple, “Bernanke-San,” references, but there’s just one tiny fact that the article doesn’t mention. Japan is the third largest creditor in the world. Where does the U.S. rank, on the current accounts balance list? Scroll down. Keep going. More. Down. Down. Until it stops. That’s right. Out of 164 countries on the list, the U.S. is dead effing last, meaning that it is the largest debtor in the world.
And the U.S. Federal Reserve is going to start buying U.S. Treasuries?
Tell me another one.
Via: Bloomberg:
Federal Reserve Chairman Ben S. Bernanke signaled he’s ready to dig deeper into the central bank’s toolkit after cutting interest rates almost as much as he can, opening the door to a shift by policy makers this month.
Bernanke yesterday said he may use less conventional policies, such as buying Treasury securities, to revive the economy, because his room to lower the main U.S. rate from the current 1 percent level is “obviously limited.” Even so, reducing the rate is “certainly feasible,” he said.
Policy makers may decide at their next meeting Dec. 15-16 on the details of carrying out such a shift, which might resemble the “quantitative easing” strategy the Bank of Japan pursued in 2001-2006 after driving interest rates close to zero. The Fed chief’s readiness to rely more on adding reserves to the banking system prompted JPMorgan Chase & Co. economist Michael Feroli to refer to him as “Bernanke-san” in a note yesterday.
“This sets the stage for the Federal Reserve to be more formal in its adoption of quantitative easing,” said Vincent Reinhart, the Fed’s director of monetary affairs until last year and now a scholar at the American Enterprise Institute in Washington.
The Bank of Japan is the only major central bank in modern times to rely on quantitative easing — the strategy of injecting more reserves into the banking system than needed to keep the target interest rate at zero.
Fed’s Balance Sheet
Steps Bernanke has taken so far have prompted some Fed officials and economists to say the central bank is already pursuing such a policy. With an array of emergency-loan programs aimed at easing the worst credit crisis in seven decades, Bernanke has expanded the Fed’s balance sheet to $2.11 trillion as of last week, more than double the year-earlier level.
Feroli, a former Fed economist, headlined his research note yesterday: “Bernanke-san goes further down the path of Quantitative Easing.”
Bank of Japan Governor Masaaki Shirakawa said in May that while the strategy “was very effective in stabilizing financial markets,” it had “limited impact” in remedying Japan’s economic stagnation because banks wouldn’t lend and companies wouldn’t borrow.
Bernanke himself didn’t use the quantitative easing term in his remarks yesterday to the Austin, Texas, Chamber of Commerce. If he does officially adopt the new approach, it will require a change in the way the policy-making Federal Open Market Committee conducts its business, Reinhart said. The FOMC, which currently votes on the level of interest rates, may now find itself debating the size of the Fed’s balance sheet and struggling to find ways to communicate that decision to financial markets, he said.
Stocks Sink
Investors didn’t immediately take to the prospect of a new strategy yesterday. While Treasuries extended gains after Bernanke’s remarks, stocks slid the most since October, wiping out more than half of last week’s rally. The Standard & Poor’s 500 Index sank 8.9 percent to 816.21, with financial stocks in the index tumbling a record 17 percent as a group.
The Fed chief’s comments coincided with the determination by economic scholars yesterday that the U.S. recession began one year ago this month. That declaration came from a committee of the National Bureau of Economic Research, a private, nonprofit group based in Cambridge, Massachusetts.
The U.S. economy “will probably remain weak for a time,” even if the credit crisis eases, Bernanke said yesterday in his speech. While the Fed can’t push interest rates below zero, “the second arrow in the Federal Reserve’s quiver — the provision of liquidity — remains effective,” he said.
Buying Treasuries
One option is for the Fed to buy “longer-term Treasury or agency securities on the open market in substantial quantities,” Bernanke said. “This approach might influence the yields on these securities, thus helping to spur aggregate demand.”
Should purchases of Treasuries fail to accomplish the Fed’s goals, “there’s very much a likelihood that they could expand the range of assets that they buy,” said former Atlanta Fed research director Robert Eisenbeis, now chief monetary economist at Cumberland Advisors, in an interview with Bloomberg Television.
At the same time, aiming to increase loans when banks still need to rid their balance sheets of bad assets “is a bit myopic,” Eisenbeis said. “They’re not going to expand lending when they’ve got a problem of leverage.”
Last week, the Fed announced two new programs aimed at unfreezing credit for homebuyers, consumers and small businesses. Those include a commitment to buy as much as $600 billion of debt issued or backed by government-chartered housing-finance companies and a $200 billion initiative to support consumer and small-business loans.
The Fed’s balance sheet “will eventually have to be brought back to a more sustainable level,” Bernanke said. “However, that is an issue for the future; for now, the goal of policy must be to support financial markets and the economy.”
Oh well, its going to get really interesting around here (as if it hasn’t been already). I am very much into following financial astrology.
You might think that’s dumb stuff but my thoughts and reading on this matter caused me to cash out of the stock market about a year ago at its apex. Not that matters, I’m just relieved to be out of that. Period.
I don’t know how to condense all I’ve read lately into a nice jivey post here, to be frank. I actually feel battered by the barrage of messages coming out of the astrological community. I am not able to sift and sort all of the information down to one nice compact message.
However, in addition to all of the other crazy stuff going on in the sky, Dec. 11-12 – from at least four sources look to be some very strange days indeed – ranging from false flag attacks to more financial HooHaa. Ben’s chart is in the picture.Capt.
Ben Bernanke pilots US onto rocks?
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Since I posted in March about Ben Bernanke’s challenging transits, the economic situation has deteriorated. I heard a report that Bernanke did confide to some source in April that he had “lost control” of things.
What he’s gone thru so far is a walk in the park compared to the hornet’s nest he’ll find himself in in mid-December. In the words of that movie,
“Houston…Ben Bernanke has a PROBLEM”.
I am targeting Thursday Dec. 11 and Friday Dec. 12 for things to blow up for our fearless Fed head. I don’t know how he can professionally survive. He’s in for a huge slam.
I’ve jotted down 18 rough transits, with the help of Sakoian and Acker, affecting Mr. Bernanke on those days. (I assumed a noon birthtime for his Dec. 13/53 Augusta GA birthday).
A lot of these transits are dynamite in nature and are aimed at some heavily afflicted natal planets, such as Sun, Moon, Mars, Jupiter, Neptune.
I zeroed in on Dec. 11th and 12th because the Moon will be in Gemini, providing strong headwinds, as it opposes his Sag. Sun and squares his natal Moon. Also, Mars will be conjunct his Sun, indicating that decisive actions of some kind are going to happen then & that danger can result from rash impulsive action, anger, impatience.
On these 2 days, Sun will conjunct Sun and because of an affliction, pride and egotism thrive. Might be a birthday he’ll not want to remember on the Sat. Sun square moon shows emotional upset and frustration, Sun opposite Jupiter (also repeated in natal chart) shows financial extravagance,over-expansion causing loss and later embarrassment.
Moon square moon is unfavourable for business and makes him moody and subject to inertia. Venus square Saturn shows he’s in for financial problems and disappointments, public relations and legal problems, selfishness in business, loss, difficulties.
There is a double whammy. Mars is opposite natal Jupiter, while transiting Jupiter is square a natally afflicted Mars. If I could write this in neon letters, it would say, “Trouble With Foreigners”. Does some nation pull the plug on the dollar or otherwise sock it to the United States Fed? I don’t have the birth chart of the US Federal Reserve in front of me, but I know that transiting Pluto is conjunct the Fed’s natal Sun and opposite its natal Pluto at this time, and on Fri. Dec. 11, transiting Mercury AND Pluto oppose that stressed Pluto. Back to the Jupiter/Mars mess Bernanke finds himself in, there’s evidence of empty promises, overexpansion in business, difficulties with institutions, corporate business problems (The Fed is a private company). He takes too much for granted, misdirects his energy, and could be unethical in business.
Jupiter is also square natal, afflicted Neptune, denoting that he has impractical emotional idealism, is escapist, and brings about his self-undoing thru unwise expansion.
Here come the heavies. You know that Saturn/Uranus opposition the economic astrologers are citing as a problem? That pattern fits like a glove into the birth chart of BB. On Dec. 11, 12, Saturn squares his Sun, bringing burdensome professional responsibilities, hard unsympathetic attitudes, emotional frustration. It’s a period of test and trial for him, depression, and difficulties with government agencies. It’s a poor time to seek favour from those in authority. Saturn also squares his Jupiter – sustained period of business and professional difficulty, loss of reputation, no support from authorities. He has to deal with a moral crisis and may compromise his principles for the sake of expediency. Saturn also probably opposes his natal Moon, imparting a lack of self-confidence and depression that has a paralyzing effect on him. More problems with government business, public relations, politics. (Saturn forms a ‘cosmic cross’ with BB’s Sun, Moon, Jupiter.)
I’m not done. Uranus is square his Sun and Jupiter. Circumstances of his life are disrupted by forces beyond his control. Or he may destroy or abandon that which he’s built up through some foolish act. There’s unexpected problems, a lack of common sense, taking too much for granted, and more problems with foreigners. There’s a change of fortune.
Uranus may be conjunct Natal Moon, again disrupting his daily routine. Neptune is inconjunct natal Uranus.
If this guy was the pilot of a plane I was booked on, and I knew this, I’d be gettting the h*** off that plane. Since he is the pilot of the Federal Reserve, I am getting the h*** out of the stuff he’s in charge of – those Federal Reserve Notes, also known as US Dollars.
Update: I just got finished editing this for the 14th time and headed to a favourite alternative website, jsmineset.com. Their story of the day, Sat. Oct. 25, was about a hot shot who’s been right about the financial crisis so far and will go nowhere near US dollars, even saying there’s a good chance of a US currency crisis. I think him and me are both right. – U.
It is karma quite frankly, and you wouldn’t be on this planet and reading this now (at least I think) if you weren’t up for the game that’s about to unwind about now.
Eileen, I’ve made a few projections based on the transits to the natal chart of the US, which you can view here:
http://www.astrologyweekly.com/countries/usa.php
You can notice that Neptune in Virgo squares Mars in Gemini in the US chart. This square is kind of interesting in itself, since both signs are ruled by Mercury (communications), and a Mars/Neptune square reflect a very energetic focus on deception and self-deception. This would tend to be in areas involving communication, but also in 7th and 9th house matters–contractual relations, alliances, foreign relations, education, and big government.
In other words, the US has a challenging condition in the natal chart, from the get-go.
What we have going on now, in the way of transits, is very serious afflictions to these two natal planets (Mars and Neptune in square).
Transiting Saturn and Uranus are forming squares and oppositions to these two planets. The first time this condition formed was on election day–November 4th.
On February 5, 2009, we’ll see the same affliction occur again (only more exactly), and again on September 15, 2009.
In late November/early December, 2009, a Pluto/Saturn square afflicts the US’s natal Venus. By November 2010, Saturn will join Pluto in afflicting the natal Venus.
Just after Christmas of this year (2008), we see Mars/Pluto conjunct in Capricorn, directly opposite the nation’s natal Venus.
So what does this mean?
Uranus/Saturn afflictions to the natal Mars/Neptune square historically occurred during the following periods:
The early months of 1781, during the Revolutionary War; July/August of 1862, during the Civil War; 1966-67, during the Viet Nam War protests; 1987, during the Iran-Contra hearings.
Pluto afflictions to natal Venus have marked the following historical events:
The last time Pluto afflicted the US’s natal Venus was in 1971. Jupiter was involved (conjunct Pluto) in August, 1971, when Nixon closed the gold window. The Pluto affliction didn’t become exact until December, 1971, when the dollar was devalued.
None of this tells us anything we didn’t already know: We are in the midst of a historic crisis. Our currency and financial system is in trouble.
That Mars/Neptune square in the US’s natal chart says something about the national character. This is an aspect that, in an individual, would suggest an addictive personality. Neptune rules drugs, alcohol–and liquids of all kinds, including oil. Neptune also rules dreams and fantasies, movies, and anything removed from reality, whether involving deliberate deception, or simply amusement and diversion. Mars square Neptune shows an excessive focus of the energies on Neptune-type things.
And we find Neptune in the 9th house of foreign affairs, higher education, the federal government, and religion. This says something about the character of the national fantasy life–who and what we think will be our salvation–and also who’s fooling us, and who we’re fooling.
That Web Bot Project which supposedly forecasts the future based on subtle shifts in internet chatter has been calling for an earthquake in Vancouver on Dec. 12. Except, that’s crazy. It makes me suspect that they don’t really derive all the forecasts from their web crawler algorithm. How do they align a time access for these events anyway. Do they search for people writing about things and including “Jan. 9, 2009” or 9/1/09? http://www.december212012.com/articles/news/Web_Bot_Predictions_for_2008_2009.htm
Eileen, if you’re still out there (I mean viewing this discussion), here’s the next date to watch: December 27th, 28th, and 29th.
As I mentioned in the above post, Pluto comes into a conjunction with Mars at that time, and this conjunction opposes the US’s natal Venus.
I mentioned above that the Pluto/Venus involvement has coincided with currency devaluation in the past.
The reason I’m not selecting one of the three days listed is because that would involve some close calculations I don’t have time to make. I.e., I believe the ephemeris tables are for GMT (Greenwich Mean Time), plus I would have to convert this to our time to get the exact time that the Moon enters into the Mars/Pluto conjunction. Looks like the Moon becomes involved on the 28th or 29th. The Sun is also involved a bit earlier–probably too early (before Christmas) for it to act as a timer.
See the US’s Venus position here (3 degrees Cancer):
http://www.astrologyweekly.com/countries/usa.php
See transiting Mars/Pluto/Moon here (scroll down to the end of December):
http://www.astro.com/swisseph/ae/2000/ae_2008.pdf
Mars/Pluto are at 0 degrees and 1 degree Capricorn–which is directly opposite the US’s Venus in Cancer. This is plenty close enough.
The reason I’m stressing this date at this time is because China is reportedly threatening to devalue its currency. Just read about it today on Market Ticker Forum. So this transit could mark the devaluation of the Yuan–and/or retaliatory devaluing of the dollar–though my bet is that the devaluation of the dollar will occur at the time of future Pluto oppositions to our natal Venus, and not just yet.