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Now they can start QE3 and go red and no one will get upset because the Treasury has them covered.
But...if the Fed is creating money and buying Treasuries so the Treasury has money to pay it's bills then how is the Treasury going to "save" the Fed ? Will the Fed need to print up money to give to the Treasury so the Treasury can cover the losses of the Fed which occurred when the Fed printed money to give to the Treasury ???
(LOL..I could go on. Who actually has the money and who is lending to whom here ?)
It's like the old Abbott & Costello "Who's on First ?"
Moral Hazard has been not only breached but is now being trampled on.
Now they can start QE3 and go red and no one will get upset because the Treasury has them covered.
But...if the Fed is creating money and buying Treasuries so the Treasury has money to pay it's bills then how is the Treasury going to "save" the Fed ? Will the Fed need to print up money to give to the Treasury so the Treasury can cover the losses of the Fed which occurred when the Fed printed money to give to the Treasury ???
(LOL..I could go on. Who actually has the money and who is lending to whom here ?)
It's like the old Abbott & Costello "Who's on First ?"
Moral Hazard has been not only breached but is now being trampled on.
That'd actually be funny if it were not so serious.
"They're already talking about QE3," said Dave Rovelli, managing director of US equity trading for Canaccord Adams. "Eventually we're going to be printing so much money the dollar is going to really go down and everybody's going to try to deflate their currency against us. I just don't know how this could end well."
interesting indeed ... you would think that upon after 2 years of trying to jump start the economy, they'ld give it a rest .. but oh well .. damn the torpedos .. full speed ahead. We hit the iceburg, and instead of slowing to a complete stop in order to assess the situation, we fire up 3 more boilers and increase our speed.
They'll keep this monitary bubble going for as long as they can I suppose .. the problem here is that there are those of us out here that knows what happens when these bubbles burst ..
We've been on the hook for the mismanaged corporations before and we all know how that feels .. next time around we'll be on the hook for a mismanaged government ..
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