2009 redux

Decided to revisit a post from 4 years ago, I was lamenting the fact another round of quantitative easing  - and thinking perhaps this "money printing" was, well, just not right, - 4 years later and $1.7Trillion in further fed balance sheet expansion it seems this is the new normal.  I can't help but think this will end badly

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The Fed created another $50Bil or so last week...what's a few Billion, it doesn't seem like much...but when you stop and think a few key strokes on Ben's cash register equates to the combined enterprise value of Petro Canada and Suncor (roughly), it puts that kind of illegitimate "wealth" creation in perspective...sooner or later the shit will hit the fan...got gold?

- Rinx

Fed Assets Increase 2.3% on Buying of MBS, Treasuries (Update1)

Aug. 20 (Bloomberg) -- The size of the Federal Reserve’s balance sheet rose 2.3 percent as the central bank bought more U.S. Treasuries and mortgage-backed securities.
Fed assets gained $46.2 billion to $2.06 trillion in the week that ended yesterday, the central bank said today in Washington. Holdings of mortgage-backed securities jumped $66.6 billion to $609.5 billion, and the Fed’s portfolio of U.S. Treasury securities increased $7.1 billion to $736.1 billion.

U.S. central bankers kept the benchmark lending rate in a range of zero to 0.25 percent at their Aug. 12 meeting and extended a $300 billion Treasury purchase program until the end of October. The Fed said economic activity is “leveling out,” and conditions in financial markets have “improved further.”

Chairman Ben S. Bernanke has flooded the banking system with reserves, providing billions in financing and liquidity for banks, and the commercial paper, asset-backed securities and mortgage-backed securities markets. Fed officials are studying the tools needed to roll back monetary expansion.

Credit extended through the Fed’s Term Auction Facility, a mechanism to provide greater distribution of reserves to commercial banks, declined by $12.5 billion to $221.1 billion.
Discount-window lending to commercial banks stood at $29.9 billion yesterday versus $38 billion the previous week. Commercial paper held by the Fed under an emergency program begun in October fell to $49.5 billion from $53.8 billion