U.S. Dollar Weaker as Fed Mulls Quantitative Easing

[Bindare_Dundat]

http://www.forexhound.com/article/Pattern_Price_Time/Analysis/US_Dollar_Weaker_as_Fed_Mulls_Quantitative_Easing/225605

The U.S. Dollar is under pressure against most majors on speculation the Fed will consider restarting its quantitative easing program following next week’s FOMC meeting on August 10.


According to the Wall Street Journal, the Fed will consider using cash from maturing mortgage-bond holdings to buy new mortgage or Treasury Bonds instead of allowing its portfolio to shrink. Insiders believe the Fed’s decision will be heavily weighted by this Friday’s U.S. Non-Farm Payrolls Report

[tarzan]

I think they realize now there is nothing they can do to stop the collapse of the dollar. What other options are left? Instead of defaulting on their debt the government will devalue the dollar to the point where the debt is paid of with worthless dollars.

Who knows what happens after that?! A lot of pain is my guess. People in Zimbabwe could at least use US dollars as an alternative when their currency collapsed. What are Americans going to use?

Food will be the most important commodity. Give your dog a choice of a gold bar or a bone and see which one he prefers. At the end food will be the most important thing for people.

[Bindare_Dundat]

I think they realize now there is nothing they can do to stop the collapse of the dollar. What other options are left? Instead of defaulting on their debt the government will devalue the dollar to the point where the debt is paid of with worthless dollars.

Who knows what happens after that?! A lot of pain is my guess. People in Zimbabwe could at least use US dollars as an alternative when their currency collapsed. What are Americans going to use?

Food will be the most important commodity. Give your dog a choice of a gold bar or a bone and see which one he prefers. At the end food will be the most important thing for people.

The Fed's only solution is just print more money. It can't go on forever. As far as gold is concerned, people in Zimbabwe do use it to be able to purchase food. I don't see how it would be any different anywhere else.

[240 is Back]

LOL @ this thread being buried by 15 threads on religion and gay marriage.

people are such stupid idiots.  really.

[Bindare_Dundat]

LOL @ this thread being buried by 15 threads on religion and gay marriage.

people are such stupid idiots.  really.

lol

 Rob, you read my mind brother. Reality will hit some faster than others but in the end most won't escape the pain. In the meantime distractions abound.

[Bindare_Dundat]

http://www.zerohedge.com/

Following up on Friday's economic forecast reduction, Goldman's economic team provides an extended analysis validating its dramatic cut to 2011 GDP from 2.5% to 1.9%, and its increase to the unemployment rate from 9.7% to 10.0%. It does so not without a decent bit of gloating: "Our forecast for a significant slowing in the second half of 2010, widely seen as implausible three months ago, is now increasingly accepted."

Of course, those reading this blog are fully aware that the fake economic sugar high achieved over the entire past 2 year period is what accountants would consider a non-recurring, one-time item achieved in the face of a deflationary tide, interspersed with ever more desperate attempts by the Fed to stimulate (hyper)inflation. And the closer we get to the imminent realization that as tens of trillions of debt need to be eliminated (and guess what that means for a like amount in underwater equity value) before any form of self-sustaining growth can be achieved, the more likely it becomes that the Fed will commit to the nuclear launch codes which will eventually destroy the US currency, in what many have pegged as hyperinflation for the items we need, and hyperdeflation for the items that nobody really cares about: an outcome which will make the Schrodinger Cat nature of our economy apparent in its final wave function collapse, with the only difference that the US economy is dead in both worlds.


A return to unconventional monetary easing by late 2010/early 2011. We expect the Federal Open Market Committee (FOMC) to respond to renewed upward pressure on the unemployment rate with another round of unconventional monetary easing. These measures could involve more asset purchases?probably Treasury securities?and/or a more ironclad commitment to keep the federal funds rate low. If the committee decides on more asset purchases, the amount would be at least $1 trillion (trn).

[Fury]

LOL @ this thread being buried by 15 threads on religion and gay marriage.

people are such stupid idiots.  really.

Yeah, man. The 150 posts you log about Palin every day speak wonders about how concerned you are with the economy. 

[Skip8282]

LOL @ this thread being buried by 15 threads on religion and gay marriage.

people are such stupid idiots.  really.

From the guy starting "How are you going to celebrate Obama's birthday?".  

Better look in the mirror 240 for those "stupid idiots".

[Skip8282]

lol

 Rob, you read my mind brother. Reality will hit some faster than others but in the end most won't escape the pain. In the meantime distractions abound.

I'd imagine a fair number here may be like myself, relatively ignorant towards topics like this (my knowledge of monetary policy is pretty much skin deep).

Sometimes, it's better to just read the opinions of more learned posters on a specific topic, rather than debate it.

[GigantorX]

Many on this board have been saying this for quite some time and backing it all up with facts and links and such.

Others responded with worthless semantical arguments about how the Stimulus is a "success" or blaming it on the previous administration, or more threads about what Palin ate for breakfast....

Oh well....

[Bindare_Dundat]

I'd imagine a fair number here may be like myself, relatively ignorant towards topics like this (my knowledge of monetary policy is pretty much skin deep).

Sometimes, it's better to just read the opinions of more learned posters on a specific topic, rather than debate it.

Understandable, but it would be in everyone's interest to at least understand who is responsible for setting and upholding the policies that are making matters worse instead of better, we would therefore know where to focus our attention and create pressure to invoke changes in those areas.

[tarzan]

The Fed's only solution is just print more money. It can't go on forever. As far as gold is concerned, people in Zimbabwe do use it to be able to purchase food. I don't see how it would be any different anywhere else.

The trick is getting smaller pieces of silver and gold. If all you have are 1 OZ Eagles or Krugers it won't help much. If you need a bag of apples you don't want to give away the Eagle. In this case a small amount of silver will help. Booze will also help so stock up on Vodka, beer, wine etc. These things will be very useful bartering objects. I think I am going to load up on about $1000 worth of tuna, lots of ammo, water and protein powder.

[Straw Man]

http://www.forexhound.com/article/Pattern_Price_Time/Analysis/US_Dollar_Weaker_as_Fed_Mulls_Quantitative_Easing/225605

The U.S. Dollar is under pressure against most majors on speculation the Fed will consider restarting its quantitative easing program following next week’s FOMC meeting on August 10.


According to the Wall Street Journal, the Fed will consider using cash from maturing mortgage-bond holdings to buy new mortgage or Treasury Bonds instead of allowing its portfolio to shrink. Insiders believe the Fed’s decision will be heavily weighted by this Friday’s U.S. Non-Farm Payrolls Report

i've been reading this too but I don't believe it

there is huge demand right now for MBS

what needs to happen (as Bernake alluded to last week) is a loosening of credit/underwriting guidelines

[tonymctones]

i've been reading this too but I don't believe it

there is huge demand right now for MBS

what needs to happen (as Bernake alluded to last week) is a loosening of credit/underwriting guidelines

LMAO do you understand why there isnt any loosening of credit and why the govt is helpless in doing so?

we are pretty screwed as far as inflation goes we are going to get hit pretty hard by it the only thing we can really hope for is everyone elses currency sees inflation similiar to ours...

[Straw Man]

LMAO do you understand why there isnt any loosening of credit and why the govt is helpless in doing so?

we are pretty screwed as far as inflation goes we are going to get hit pretty hard by it the only thing we can really hope for is everyone elses currency sees inflation similiar to ours...

I do believe I understand why there is not a loosening of credit or rather why credit is "tight" at the present moment and the government is not completely helpless

the govt (you, me, Obama, etc..) own fannie/freddie and hud, etc...

there has been an over-reaction (contraction) is credit/uw guidelines

inflation is always a concern but it's not the primary issue right now (and a relative issue like any counterparty relationship)

[tonymctones]

I do believe I understand why there is not a loosening of credit or rather why credit is "tight" at the present moment and the government is not completely helpless

the govt (you, me, Obama, etc..) own fannie/freddie and hud, etc...

there has been an over-reaction (contraction) is credit/uw guidelines

inflation is always a concern but it's not the primary issue right now (and a relative issue like any counterparty relationship)

LOL fannie/freddie arent going to do much in the grand scheme of things...the govt is completely helpless in terms of commerical banks and their lending you think obama would be coming out every other week saying how we need to create more lending if they had a way of actually making the banks lend?

the contraction in credit is linked quite closely to the actions the govt is making...yes straw everything the govt is doing...the finreg bill, health care etc...did you not hear about ford trying to sell off a bunch of their debt that went belly up the day the finreg bill was signed? there is a reason why...

you see the finreg bill was a shell of bill with the details to be laid out later...well the devil is in the details...not business is going to stick their necks out their when there are unknowns...this is a big reason why there is less lending right now...

[Bindare_Dundat]

the contraction in credit is linked quite closely to the actions the govt is making...

Just one example.

Banks blame government for lack of lending
Capital requirements, intrusive regulators slow flow of credit, they claim

NEW YORK — Banks that are being scolded by the government for not lending are blaming a new obstacle: The government itself.

Fearing more bank failures, federal regulators are forcing institutions to hold more money in reserve and scrutinizing loans. But bank executives complain that the extra oversight thwarts their ability to quickly pump billions of bailout dollars into the ailing economy.

Banks say they are caught in a frustrating Catch-22: How can they make more loans when creditworthy borrowers are scarce, their balance sheets are saddled with bad debt and regulators are hounding them to horde cash?

“We want to lend, but the regulators are flat-out telling us, ’Get your capital up.’ Then there’s Congress telling you to lend it all out,” said Greg Melvin, a board member at FNB Corp., a Hermitage, Penn.-based bank that got $100 million in bailout money.

“Two arms of the government are saying exactly the opposite thing — it’s ridiculous,” added Melvin, who is also chief investment officer at investment firm C.S. McKee.

Regulators say they are only being careful, and they deny slowing lending.


http://www.msnbc.msn.com/id/28985294/

[tonymctones]

Just one example.

Banks blame government for lack of lending
Capital requirements, intrusive regulators slow flow of credit, they claim

NEW YORK — Banks that are being scolded by the government for not lending are blaming a new obstacle: The government itself.

Fearing more bank failures, federal regulators are forcing institutions to hold more money in reserve and scrutinizing loans. But bank executives complain that the extra oversight thwarts their ability to quickly pump billions of bailout dollars into the ailing economy.

Banks say they are caught in a frustrating Catch-22: How can they make more loans when creditworthy borrowers are scarce, their balance sheets are saddled with bad debt and regulators are hounding them to horde cash?

“We want to lend, but the regulators are flat-out telling us, ’Get your capital up.’ Then there’s Congress telling you to lend it all out,” said Greg Melvin, a board member at FNB Corp., a Hermitage, Penn.-based bank that got $100 million in bailout money.

“Two arms of the government are saying exactly the opposite thing — it’s ridiculous,” added Melvin, who is also chief investment officer at investment firm C.S. McKee.

Regulators say they are only being careful, and they deny slowing lending.


http://www.msnbc.msn.com/id/28985294/

exactly yet another reason...policitians love requiring banks to keep more capital reserves but then they want them to turn around and lend lend lend...LOL what this country needs is a successful CEO or CFO to get in office...

[Straw Man]

LOL fannie/freddie arent going to do much in the grand scheme of things...the govt is completely helpless in terms of commerical banks and their lending

fannie/freddie are owned by the govt (you, me and Obama) and HUD is the govt

that's basically the entire credit market for mortgages

Just one example.

Banks blame government for lack of lending
Capital requirements, intrusive regulators slow flow of credit, they claim

NEW YORK — Banks that are being scolded by the government for not lending are blaming a new obstacle: The government itself.


http://www.msnbc.msn.com/id/28985294/

this is my point

the GOVT owns fannie/freddie and this is a HUGE part of the credit market
that is basically the entire residential mortgage credit market

[Soul Crusher]

LOL @ this thread being buried by 15 threads on religion and gay marriage.

people are such stupid idiots.  really.

[tonymctones]

fannie/freddie are owned by the govt (you, me and Obama) and HUD is the govt

that's basically the entire credit market for mortgages

this is my point

the GOVT owns fannie/freddie and this is a HUGE part of the credit market
that is basically the entire residential mortgage credit market

fannie and freddie are mortgages straw the problem isnt mortgages...the rate on a 30 yr mortgage are the lowest they have ever been I believe...

the problem is commercial lending not residential....

and yes the moves the govt and this administration are doing is having a direct impact on commercial lending and the lack of it.

arent you a finance guy?

[Straw Man]

fannie and freddie are mortgages straw the problem isnt mortgages...the rate on a 30 yr mortgage are the lowest they have ever been I believe...
the problem is commercial lending not residential....

and yes the moves the govt and this administration are doing is having a direct impact on commercial lending and the lack of it.

arent you a finance guy?

exactly

rates are the lowest they've ever been and yet fewer and fewer people can qualify for a loan.   The more people that could refinance and lower their rate/payment (freeing up their income for discretionary purchases) the more it would be true and signifcant stimulus for the economy.  The more people that could qualify for a new purchase loan the quicker we could get through this glut of properties.   Mortgage bankers are scared shitless of buybacks and credit and underwriting guidelines have tightened too much.  This is pretty much what Bernaake was saying last week

[tonymctones]

exactly

rates are the lowest they've ever been and yet fewer and fewer people can qualify for a loan.   The more people that could refinance and lower their rate/payment (freeing up their income for discretionary purchases) the more it would be true and signifcant stimulus for the economy.  The more people that could qualify for a new purchase loan the quicker we could get through this glut of properties.   Mortgage bankers are scared shitless of buybacks and credit and underwriting guidelines have tightened too much.  This is pretty much what Bernaake was saying last week

LOL the simple fact is straw that not that many ppl are in the market for a new home right now...its not just that credit has tightened though it has again due to multiple things including the administrations moves but its that ppl in general arent looking to stick their necks out in a down economy...

AGAIN its not residential lending thats the big problem its commercial lending that it problematic...getting ppl new mortgages isnt going to do much in terms of the economy b/c they arent going to spend the money in a shitty economy they are going to save it or pay down bills.

what needs to increase is the commerical lending to help create jobs...

what the govt has done is tie one hand of the banks and tell them to work like they have two hands...theyve made it where they have to increase their capital base...WELL HOW DO YOU THINK THEY ARE GOING TO DO THAT? by sticking it to their consumers with fees...

[Straw Man]

LOL the simple fact is straw that not that many ppl are in the market for a new home right now...its not just that credit has tightened though it has again due to multiple things including the administrations moves but its that ppl in general arent looking to stick their necks out in a down economy...

AGAIN its not residential lending thats the big problem its commercial lending that it problematic...getting ppl new mortgages isnt going to do much in terms of the economy b/c they arent going to spend the money in a shitty economy they are going to save it or pay down bills.

what needs to increase is the commerical lending to help create jobs...

what the govt has done is tie one hand of the banks and tell them to work like they have two hands...theyve made it where they have to increase their capital base...WELL HOW DO YOU THINK THEY ARE GOING TO DO THAT? by sticking it to their consumers with fees...

I never said that credit standard weren't tight in commercial lending but just that it is unreasonably tight in residential mortgage lending.  If you don't understand that residential mortgage lending plays a huge role in our economy (think back to the last 8 years - that was primarily fueled with residential mortgage lending) then I don't have time to explain it to you this morning

[tonymctones]

I never said that credit standard weren't tight in commercial lending but just that it is unreasonably tight in residential mortgage lending.  If you don't understand that residential mortgage lending plays a huge role in our economy (think back to the last 8 years - that was primarily fueled with residential mortgage lending) then I don't have time to explain it to you this morning

LOL if you dont understand why the failure of the mortgage mkt played a role in the financial crises then you should understand why bringing it up isnt going to bring us out of the shitter...

LMAO arent you a finance guy?

you think that if more ppl refi they will spend that money? LMAO wtf are you smoking...they arent going to spend it they are going to put it in the bank...the bank isnt going to invest b/c the economy is shit and they have to raise more capital to meet new requirements...

The reasons the banks arent lending and investing are the same reasons alot of americans arent...you need to provide incentives to lend and the govt is providing incentives to not lend...