Quantitative Easing Revisited, page-9

First 9 Last

Share
Profile

Follow
timber1956

7,424 Posts.

152

30/10/14

22:17

Post #: 14211621
Share

Originally posted by Dazedandconfused ↑

Although the Fed is indeed making an on-paper profit with the bonds it has purchased, that is in reality completely notional. The Fed purchased those bonds at the unrealistic face value ... not the value those assets would have attracted if they were marked to market. These were the 'assets' which tanked in the GFC and which made the banks possibly/probably insolvent.

And yep .... the Fed calls the tune on interest rates. Possibly the biggest and loudest signal you could ever ask for .... it exposes the actual understanding the Fed has regards the true state of the US economy. Interest rates could rise if the economy could handle it .... so apparently that is not the case.

I take your point that the Fed can simply recycle its 'profits' to pay an interest rate. But on who pays the costs?....it is not the Fed which will ultimately 'pay the bill' ... it is the average US citizen who is already paying, most notably retired folk who are currently living off and eroding their life's savings.

Expand

Dazed

"Although the Fed is indeed making an on-paper profit with the bonds it has purchased, that is in reality completely notional."

Get a grip!

- Do you think that mortgage holders pay notional interest to the owners of MBS?
- Do you think that the US Treasury pays notional interest to the owners of its T notes and T bonds?
3 Upvote

Reply

Top Stories

Listen: HotCopper Wire Podcast 016 – FY25 ended up not so bad... but Trump unpause is coming

Week 27 Wrap: 40% China tariffs?; ASX +10% FY25; US Amazon price spike

THL

Tourism Holdings says Liberation Day tariffs smashed US RV demand

HotCopper Highlights, Week 27: G8 scalped, Domino’s drops the box, Gemlife brief hype & more

DMP

Is Domino's a steal after -25% plunge?

NMG

New Murchison Gold blasts off at Crown Prince as 'better than expected' results return

KGD

Kula picks up unexplored niobium play in Malawi, with surface samples logged

I88

Infini Resources onto Phase 2 at Portland Creek after spotting 'widespread uranium'

Trump chides Powell as Goldman call for calm. The RBA must be nervous

OSL

OncoSil wraps up recruitment for key pancreatic cancer trial

First 9 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Quantitative Easing Revisited, page-9

Top Stories

Listen: HotCopper Wire Podcast 016 – FY25 ended up not so bad... but Trump unpause is coming

Week 27 Wrap: 40% China tariffs?; ASX +10% FY25; US Amazon price spike

Tourism Holdings says Liberation Day tariffs smashed US RV demand

HotCopper Highlights, Week 27: G8 scalped, Domino’s drops the box, Gemlife brief hype & more

Is Domino's a steal after -25% plunge?

New Murchison Gold blasts off at Crown Prince as 'better than expected' results return

Kula picks up unexplored niobium play in Malawi, with surface samples logged

Infini Resources onto Phase 2 at Portland Creek after spotting 'widespread uranium'

Trump chides Powell as Goldman call for calm. The RBA must be nervous

OncoSil wraps up recruitment for key pancreatic cancer trial

Featured News