Federal Reserve to begin reducing bond purchases in January because of stronger US job market

  • Article by: MARTIN CRUTSINGER , Associated Press
  • Updated: December 18, 2013 - 6:05 PM

WASHINGTON — The Federal Reserve on Wednesday sent its strongest signal of confidence in the U.S. economy since the Great Recession, deciding that the nation's economic prospects are finally bright enough to withstand a slight pullback in stimulus spending.

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fjbarrowsDec. 18, 13 1:43 PM

Ooooh, a whole $10 billion? Seeing as though they shouldn't be buying them at all, this is a nothing step.

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swmnguyDec. 18, 13 1:54 PM

So now we'll "taper" from spending $1.02 Trillion per year to buy up worthless derivatives from the banks to only buying $900 Billion per year from the banks.

The banks aren't doing anything with this money, which is why our economy isn't really improving. The banks are parking it at the Federal Reserve, drawing interest, further straining our economy.

The only way you can say that Unemployment is easing is by counting fewer and fewer out-of-work Americans as being "Unemployed." The U6, which is the measure of unemployment more like what people think Unemployment really is, stands around 14%. If we went back to the way we counted Unemployment before Clinton and before him Reagan rigged the formulas, back to the way Unemployment was counted when it drove Carter out of office, U6 is around 24%. Check the Bureau of Labor Statistics and the "Shadowstats" websites if you don't believe me.

This seems like a completely meaningless move. Maybe cutting our subsidy to the banks by about 10% will force them to resume making a living by acting like banks rather than just soaking up subsidies? I sort of doubt it.

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ti1310Dec. 18, 13 2:40 PM

---The banks aren't doing anything with this money, which is why our economy isn't really improving. The banks are parking it at the Federal Reserve, drawing interest, further straining our economy. --- Not sure why the FOMC has not done this but they could quit paying the banks an interest rate on the excess reserves they are sitting on or take it one step further and charge the banks to hold the excess funds. The banks in aggregate have 2.5 trillion in excess reserves, taking away the interest component may force the banks to inject some of that money back out into the economy.

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lilwhooturzDec. 18, 13 3:25 PM

Instead of wasting $1,020,000,000,000 annually they will cut back to wasting only $900,000,000,000 per year. I don't feel a whole lot better.

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theagonybhoDec. 18, 13 5:26 PM

Wait until around February for the jobs numbers to come in after the holiday hiring is over, Obamacare premiums are felt, more part time jobs and some of those long term unemployed go back to looking for work raising unemployement from a rosey 7 %. Interest is rising also and home buying slowed in November also, if i was the Feds i wouldnt call the economy improving just yet.

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wiseoracleDec. 18, 13 8:05 PM

So tell me this uncle Ben - why, with interest rates for banks at record lows... for a prolonged period of time... are nearly all the consumer credit card rates still at the gouging rates of 12.99% on up to 25.99%? (yup, I have a fantastic credit score; try another answer). How come the doting Feds don't seem to loose any sleep, when none of the aid ever reaches the working guy\gal?

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justincleverDec. 18, 13 8:17 PM

How is it that somebody deserves a thumbs down because they disagree with this time-bomb scam? All you sheeple better realize that this will blow up, and when it does, the poor and middle class will be decimated. And just think, all of this stimulus and the most it can muster is an economy that is barely functional. Why else would we have to extend unemployment benes for another year, 4 years after the recession ended?

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theruntDec. 18, 13 8:52 PM

The resumes of Federal Reserve Board members are quite impressive. Fox News commentators might not be quite as knowledgeable on monetary policy, but if they tell their viewers/listeners that, as justinclever noted, "the poor and middle class will be decimated," they will be sure to tune in for the next update. Scary sells!

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justincleverDec. 18, 1310:26 PM

Hey Runt!! how many dollars can our government print before inflation hits? Call it tactic or whatever you want, just take the blinders off and look at this objectively. Why not print enough money to make us all millionaires? The fact is is this will crash. The rich will be fine because they will have hard assets, the poor and the middle class will take the hit. Old Ben is being replaced because he has voiced concern regarding this scam. Obama couldn't chance ending the easing so he fixes it with the nomination of a puppet. We rae no richer than Petters or any of the other ponzi scheme crooks. The only difference is that no one has called in their loaned money yet. Fox news has nothing to do with it. Unlike sheeple like you, I can see things for what they are.

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Wally_99Dec. 18, 1311:22 PM

Inflation is a ticking time bomb. The recently rising housing prices??? Tick... Tick... Tick... The stock market being up 30% based on fiat currency? Tick.... Tick... Tick... Precious metals at artificially-driven lows? A great buy!!!! Inflation is coming in a big way. And it will make 2008 look like a walk in the park.

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