Aug. 10 (Bloomberg) -- Federal Reserve officials will maintain their holdings of securities to prevent money from being drained out of the financial system in their first attempt to bolster the economy in more than a year.
The central bank said it will reinvest principal payments on its mortgage holdings into long-term Treasury securities. The Fed retained a commitment to keep its benchmark interest rate close to zero for an “extended period.”
Inflationists are all exited, but for nothing. This measure is a drop, its lifespan is going to be very very long and the pace very slow...
The dollar barely declined today against many major currencies, and rose against a few, like the AUD. The treasuries rallied and finally, generally speaking, the equity and commodities markets didn't move neither. Is that the consequence of investors fear of inflation? NO.
Despite the cataclysmic data on every front (housing, unemployment, taxes) and bankruptcies at every level of society (from small companies to big banks, from cities to states), the so-called stimulus plan which is nothing but wealth, social and economic destruction was not deemed necessary by Bernanke and his board of evil Keynesian bouffons — read: we didn't had the guts to try it again.
Helicopter Ben, the Fed, and Congress have lost, destroyed by the monster they gave birth to about 70 years ago: the biggest credit bubble the world has ever known. The Grand Experiment they have been conducting on a globalized world will soon come to an end. Let's all worship the Greater Depression, which is going to be the reaper of this sick society, diagnosed with a addiction to credit that more and more seems will be lethal and its even sicker institutions and currencies.
“The pace of economic recovery is likely to be more modest in the near term than had been anticipated,” the Federal Open Market Committee said in a statement after meeting today in Washington. “To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level.”Let me once more put this straight: The only help the Fed is providing support on, is in destroying the economy and the currency, nothing else.
Jim Cramer is the ultimate contrarian indicator and what does he say? Jim Cramer says ‘Fed Said Good Things—Buy’
Mish agrees with me on this post: Quantitative Nothingness. It's always reassuring to have him on your side.
Carl Futia, whom I respect deeply for many of his calls, has been sidetracked lately and has become a great contrarian indicator. Let's hope he finds his way. In the meantime, I'm glad to be on the other side of his calls and encouraging words.
Apologies for the many typos in the original post - I was feverish in bed when I wrote it. If that is not dedication!!