Peter Schiff on CNBC: "Fed to cut rates and launch QE4" Gets cut off by technical difficulties

[openfire]

[spudea]

I think an easy move would be to remove the target range. The range feature was a crisis era procedure. Instead of range 0.25 - 0.50, which yields an effective rate of 0.37. Make the target rate 0.50.

https://apps.newyorkfed.org/markets/...es/fed%20funds

[AZJoe]

The constantly interrupting guy in the pink shirt is auditioning as a future star in a forthcoming Peter Schiff was right video.

[jllundqu]

The constantly interrupting guy in the pink shirt is auditioning as a future star in a forthcoming Peter Schiff was right video.

That was my EXACT thought when watching the video....

He's gonna be eating some crow

[jllundqu]

Dang. I just watched the full 9 min clip..... almost punched that damn screen when pink shirt kept opening his fed sucking mouth

[devil21]

That was my EXACT thought when watching the video....

He's gonna be eating some crow

Just like the mouthpieces from the last go round he will never be seen or heard from again. Nothing but interchangeable Fed pumper cheerleaders. Only thing I wish Peter would do is start to point out how this is all planned, instead of reinforcing the FALSE narrative that the Fed is "clueless" and all of this stuff is unintended consequences. The Fed folks knows EXACTLY what they are doing. They've been doing it for over 100 years now.

[Ronin Truth]

Just like the mouthpieces from the last go round he will never be seen or heard from again. Nothing but interchangeable Fed pumper cheerleaders. Only thing I wish Peter would do is start to point out how this is all planned, instead of reinforcing the FALSE narrative that the Fed is "clueless" and all of this stuff is unintended consequences. The Fed folks knows EXACTLY what they are doing. They've been doing it for over 100 years now.

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." -- John Maynard Keynes

[Zippyjuan]

Fed can never end QE. Fed can never stop lowering interest rates. Fed can never raise interest rates. Gold will go to $5000 an ounce. Hyperinflation.

Maybe some day he will be right about something.

[openfire]

Maybe some day he will be right about something.

[openfire]

[dannno]

Fed can never end QE. Fed can never stop lowering interest rates. Fed can never raise interest rates. Gold will go to $5000 an ounce.

Maybe some day he will be right about something.

Did you watch the video in the OP? He directly responds to a lot of the same criticism that comes from you and others here.

[AZJoe]

Fed can never end QE.

Yes, because the Fed has ended all QE. They have sold off all TARP assets at market value. They sold off all Fed acquisitions. They have cleared out their balance sheets. The have completely closed access to the discount window.
----- Riggghtt.

Fed can never stop lowering interest rates. Fed can never raise interest rates.

Yes, because the Fed has not continuously kept lowering rates over the past decade (and lowering trend since 1979), but rather the Fed has been raising rates. Right. Because the Fed has not continuously kept its rate hovering at near zero, but rather the Fed has continuously kept raising rates substantially well above inflation.
----- Riiiggghhht

"Maybe some day [the Zippyjuan] will be right about something."

[Zippyjuan]

Yes, because the Fed has ended all QE. They have sold off all TARP assets at market value. They sold off all Fed acquisitions. They have cleared out their balance sheets. The have completely closed access to the discount window.
----- Riggghtt.



Yes, because the Fed has not continuously kept lowering rates over the past decade (and lowering trend since 1979), but rather the Fed has been raising rates. Right. Because the Fed has not continuously kept its rate hovering at near zero, but rather the Fed has continuously kept raising rates substantially well above inflation.
----- Riiiggghhht

"Maybe some day [the Zippyjuan] will be right about something."

The Fed doesn't own any TARP assets. Never did. TARP was a congressionally approved aid package where the US Treasury (not the Fed) bought shares in the car companies and AIG. Those assets have all been sold out with the final shares of AIG unloaded in December, 2014. https://en.wikipedia.org/wiki/Troubl...Relief_Program

As for "selling those assets at market value"- the government reportedly made $15.3 billion in profits on the deal. http://money.cnn.com/2014/12/19/news...-bailouts-end/

Yes, it is true they have not been selling off the securities they bought in QE but that does not mean that they have to sell them all off before QE can be considered ended. QE (Quantative Easing) ended when they quit buying more securities. That occurred in October, 2014. They do continue to roll over (replace maturing notes) their securities.

They have cleared out their balance sheets.

Would you include the over $1 trillion they had before the recession before you consider QE to have actually ended?

The have completely closed access to the discount window.

Nothing to do with QE but discount window borrowing is extremely low- currently at just $63 million (not even billion) dollars. Discount window borrowing is overnight loans to banks. The window was not closed before the recession and QE either.



https://research.stlouisfed.org/fred2/series/DISCBORR

Discount Window Borrowings of Depository Institutions from the Federal Reserve

2016-04: 0.063 Billions of Dollars (+ see more)
Monthly, Not Seasonally Adjusted, DISCBORR, Updated: 2016-05-12 3:41 PM CDT

[AZJoe]

Silly Zippyjuan. So many silly errors.

The Fed doesn't own any TARP assets. Never did.

That is a most absurd statement. Sure, Congress had its own TARP program, but that does not mean the Fed was not buying toxic assets to save certain financial intuitions. To the contrary. The Fed has expanded its balance sheet from $850 billion to over $4.4 trillion. The quantity of toxic assets the Fed purchased dwarfs the official Congressional TARP program by comparison.

For instance, a few of many examples:

Federal Reserve Discloses Toxic Assets It Bought to Rescue Banks, AIG : http://www.insurancejournal.com/news.../02/108690.htm

"When Bear Stearns teetered in March 2008, the New York Fed brokered the company’s sale to JPMorgan Chase & Co. The New York Fed created Maiden Lane LLC to buy $30 billion of investments that JPMorgan was unwilling to take over. It was the first major bailout of the financial crisis, occurring almost six months before the collapse of investment bank Lehman Bros … In buying those assets …. the Fed took on billions of dollars worth of risky derivatives … The company also holds $1.49 billion in whole residential mortgage loans, mortgage securities backed by Fannie Mae and Freddie Mac and loans for hotels and other commercial real estate.

The New York Fed created Maiden Lane II LLC and Maiden Lane III LLC to support the $182 billion AIG rescue. … The New York Fed … paid banks full price for investments that already had lost much of their value … The Fed has said its secrecy was necessary ..."

Can the Fed unload its toxic assets? : http://www.csmonitor.com/Business/Th...s-successfully

In the wake of the credit crisis of late 2008, the Federal Reserve flooded the banking sector with liquidity. The Fed purchased troubled assets in exchange for base money. … The Fed concomitantly commenced paying interest on these reserves to remove the incentive for them to be fully used. …
The Fed's liquidity injection was made by issuing credit to banks and simultaneously buying back troubled (i.e., subprime) banking sector assets. While the banking sector's balance sheet ballooned with cash and cash equivalents, the Fed's own balance sheet witnessed a sharp rise in the very troubled assets it was removing from the banking system. …
The value of the mortgage-backed securities that the Fed holds … reported value on its balance sheet is $1.1 trillion, … the Fed purchased the lowest-quality assets that the banking system held: removing the most "toxic" assets to aid bank capitalization levels. …

The Fed's Balance Sheet: http://www.heritage.org/research/rep...ank-insolvency

One source of controversy has been the extent to which the Fed allocated credit directly to possibly insolvent institutions. … the Fed facilitated bailouts to financially troubled institutions by invoking its so-called emergency lending authority. … Even after financial markets stabilized, the Fed expanded its asset purchases because the recovery was slow to materialize. … the Fed now holds more than five times the amount of securities it had prior to the 2008 crisis. The Fed’s balance sheet expanded from about $850 billion to more than $4.4 trillion.

The Fed's Hidden Agenda: http://www.wealthdaily.com/articles/...en-agenda/5042

In September 2012, the Fed announced a new buying program. It was the third round … Quantitative easing is just another term for money creation. The first one, in September 2012, announced that the Fed would buy $40 billion per month in mortgage-backed securities, or MBS. … until December 2012, three months later, that the Fed upped the ante and announced it would buy $45 billion in new U.S. government debt each month. This was in addition to the $40 billion per month in MBS.
So the Fed was buying $85 billion in assets [per month] through most of 2013, essentially creating $85 billion per month out of thin air. …
the main purpose of QE3 was … to bail out the banks … Buying Toxic Assets …
If the Fed buys $40 billion of MBS in a month, is it really paying the current market value …. imagine a company buys a stock for $100 per share, and then the value falls to $40 per share. Then the Fed comes along and says, "We are going to buy your shares from you at the original price of $100 per share." …
It doesn't matter what the asset was originally worth. It matters what it is worth today. …
If you were a bank … You can push your losses off to the Fed, which is really pushing your losses off on anyone who uses U.S. dollars. Crazy? …
Meanwhile, the other part of QE3 — the Fed's buying of government debt — … allows the government to run massive deficits at lower interest rates, preventing spending cuts and making things far more painful in the future. The government's spending severely misallocates resources and will only lead to a major correction at some point in time….

But hey, folks like JP Morgan and Goldman Sachs and company, they deserve to be bailed out. Billionaires have to keep their status courtesy of American workers. Its only fair, after all, they "are doing god's work."












Footnote: As to the discount window lending program, yes that is a very small program compared to everything else the Fed' is doing, but while relatively small compared to the Fed's other antics, the discount window lending is nevertheless most assuredly a form of quantitative easing. Any additional liquidity expansion by the Fed is an easement of the quantity of the monetary based, hence quantitative easement.

Nothing to do with QE but discount window borrowing is extremely low- currently at just $63 million (not even billion) dollars. Discount window borrowing is overnight loans to banks. The window was not closed before the recession and QE either.



https://research.stlouisfed.org/fred2/series/DISCBORR

[Zippyjuan]

The Fed bought mortgage backed securities and US Treasuries. Those were not part of TARP. The "toxic assets" were mortgage backed securities. They were considered "toxic" because at the time there was no market for them due to the fact that they were bundles of all kinds of qualities of mortgages- some were worth good money and some were worthless but they were so mixed in there was no way to accurately value them. Nobody wanted to take the time to sort out the good from the bad so the Fed said they would take them off their hands - in some cases they purchased them, in some cases they traded US Treasury notes for them in the early going. The original goal of TARP was supposed to deal with the mortgage backed securities- buy them, separate the good from the bad, and resell the good but Congress changed it into bailing out the automakers (and AIG the "insurers insurer") instead.

The Fed ended all purchases in October, 2014. They do still buy some when their current holdings mature and get redeemed to keep their balance the same.

Footnote: As to the discount window lending program, yes that is a very small program compared to everything else the Fed' is doing, but while relatively small compared to the Fed's other antics, the discount window lending is nevertheless most assuredly a form of quantitative easing. Any additional liquidity expansion by the Fed is an easement of the quantity of the monetary based, hence quantitative easement.

If you consider Discount Window loans to be Quantiative Easing then we have always had Quantative Easing. But those overnight loans have no real impact on the money supply.

All of your links do not dispute anything I said.