Anyone know when QE3 will be announced? I head it might be this week. Not sure how true this is though. Anyone know?
Bernanke is due to give a speech this Friday 26th August 2011 http://www.stockstobuy.org/forum/topics/ben-bernanke-jackson-hole-speech-8-26-11-august-26-2011 "Ben Bernanke will hold a speech next Friday which will probably be the single most watched event in the Stock Market next week. After next week, expect an economic data filled 2 weeks which will show us manufacturing data as well as the Jobs report for August. These three events will provide a lot of insight towards which way the stock market heads in September 2011. If we don't hear anything substantial from Bernanke on Friday, look for the markets to drop. If he makes a huge announcement like QE 3, we could rally hard."
http://www.federalreserve.gov/whatsnext.htm August 26 Speech--Chairman Ben S. Bernanke Near- and Long-Term Prospects for the U.S. Economy At the Federal Reserve Bank of Kansas City Economic Symposium, Jackson Hole, Wyoming 10 a.m. ET
The USA supposedly ran out of money on 2nd August. The Debt Ceiling was raised that day. US Treasuries would have to have been sold that day also to enable the bills to be paid. Who bought those Treasuries, and what with? Ben Bernanke and his new USDs perhaps? OC
Per Jim Rickards, there will be no QE3 as we would think it. He believes the Fed will roll over maturing T bills and other maturing principal and interest receipts into new 30 year bonds. That actually would be one of their better ideas. Ok, their only good idea. The US should never have gone to mainly short term financing. Robert Rubin, US Treasury Secretary under Clinton, made the change to short term financing. He stated that the US would save a lot of money on interest payments. Of course, the greater amount of financing fees from more frequent bond auctions never entered into his mind. The problem with short term financing, is that it works great when times are good and blows up in your face when times are bad. Just ask the people who got caught flipping houses at the end of the US housing boom. Those short term loans didn't go too well for them.
dccpa, "He believes the Fed will roll over maturing T bills and other maturing principal and interest receipts into new 30 year bonds." The HOLDER of those maturing Bonds decides if he will roll-over or not. He can and possibly will demand repayment, and if the US Treasury does not, then the USA is in default. If that situation developed and the US Treasury did not have the readily available USDs to repay the holder, they would simply issue other Bonds to the Fed, and Ben Bernanke would buy them with newly printed USDs = QE THREE!!!!! In my view this is exactly what is happening at this moment. OC
The Fed has well over 1 Trillion in Treasury Securities. Those securities are what Rickards was referring to.
dccpa, OK, I think I misread 'Treasury' for 'Fed', but the Fed has NO choice, and rolling over will not solve the USGs need for ever more finance. The money is virtually valueless no matter what the term of the Bond is, 10 or 30 years, they are going to be paid back in USDs that will buy bugger all. (as will the US Social Security Department with their US$2.5 trillion of the things.) OC
