The Federal Reserve's $4.3 trillion ticking time bomb

Scary. Just what the country needs another 4+ trillion added on. Thanks Obama et. al.

Quantitative easing was a Faustian bargain.

"The Federal Reserve has a big problem if it wants to raise rates again. It will have to pay U.S. and foreign banks enormous sums of money instead of U.S. taxpayers.

Not only would the Fed likely draw the ire of Congress, but it could also become a target of the next U.S. president—be it Clinton or Trump. That’s because the gangbuster profits of $90 billion (plus) per year that the Fed remits to the Treasury could easily dwindle to zero. According to several leading economists, it’s also possible that the Fed will become technically insolvent (though it always has the power to print its way out of such a disastrous state).

Quantitative easing was a Faustian bargain

The putative savior of the financial crisis, quantitative easing, was a Faustian bargain. The Fed got to inject trillions of dollars into the financial sector while simultaneously “sterilizing” the very same money. It did this by incentivizing banks to deposit their digital cash at the Fed, paying above-market interest rates.

Currently, the Fed pays 0.50% annually to banks to keep that money out of the economy. It might not seem like much, but the comparable rate paid by the U.S. Treasury for T-bills is 0.28%. In other words, the Fed pays banks nearly twice as much as the Treasury does.

https://finance.yahoo.com/news/the-federal-reserve-s--4-3-trillion-ticking-time-bomb-121801977.html#

Yeah, thanks Obama for implementing QE....even though you actually have/had nothing to do with FED policy.

Europe largely followed jatki's anti-QE policy in the wake of 2008 and almost collapsed as a result. They've since followed our FED's footsteps with more positive results.


And jatki, if you support the fed aggressively raising rates you can say hello to $20 oil. You And I both got a nice taste of what that did to our investments last year didn't we?

Never said I had an answer PJ, just passing alomg a message. I know we both both lost a few bucks, fortunately I've been making a few by sticking with some energy picks, I toughed it out and as painful as it was, kept buying at the lows. I'm happy for the guys who made bucks on the way down, CONGRATS, I hope to make bucks on the way back up.

Obama has no power over rates, but has been the luckiest president ever, for having almost 0 percent interest rates, hell Jimmy Carter would have been the best president ever with these rates, they should have been raised a long time ago, so you can lower them when needed. AS I HAVE SAID BEFORE, NO ONE CARES ANYMORE ABOUT STEALING MONEY FROM FUTURE GENERATIONS, ITS ALL ME,ME,ME!!!!!!! FREE THIS, FREE THAT, REPUBLICAN HAVE JOINED THIS CAMP OVER THE LAST 12 YEARS.

I find it ironic that we didn't hear a peep out of Republicans/conservatives/teajadists when their guy was running up debt like a drunken sailor on leave and putting it on the the taxpayer credit card. The silence was deafening.

Sure someone spoke up.

The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. ... I therefore intend to oppose the effort to increase America’s debt limit.”

— Then-Sen. Barack Obama, floor speech in the Senate, March 16, 2006

The president has acknowledged that his previous vote against the debt limit was “a political vote.” On Monday, at a news conference, he urged lawmakers to boost the debt limit without conditions: “We’re going to have to make sure that people are looking at this in a responsible way, rather than just through the lens of politics.” (In other words, don’t do what I did back when I was a lawmaker.)

https://www.washingtonpost.com/blogs/fact-checker/post/annotating-obamas-2006-speech-against-boosting-the-debt-limit/2013/01/14/aa8cf8c4-5e9b-11e2-9940-6fc488f3fecd_blog.html

Then you were not listening to talk radio.

On top of the last 6 months of GDP growth of about 1%, yesterday we find less than 40,000 new jobs & 500,000 have left the work force. The U6 rate remains close to 10% & job participation is at 40 year lows. Three of the last 5 quarters have been less than 2%.

Obama will be the first president in decades to have never had a year with a GDP growth rate of at least 3%.

I listened to a lot of political talk radio back when Bush was in office. From Limbaugh to Beckkk to Savage not one of them or their guests of callers never mentioned it. They were too busy polish the Dubya turd. I never heard any GOP'ers in real life or in the media mention the debt until Jan 21st, 2008.

10,000 Americans reach 65 each day. The vast majority leave the workforce and retire. Another 10,000 turn 62 and about half of them retire early.
Baby Boomers have been predicted to retire in these numbers for years, yet suddenly it's a big story.