United States Federal Reserve

Yesterday came and went, and yes, the Federal Reserve decided during its monthly meeting to implement yet another round of quantitative easing, which I already discussed in an earlier post. This is perhaps a more significant event than yesterday's elections. The FED is flooding the financial markets with AT LEAST $600 billion in new liquidity. To put that into perspective, the much maligned TARP program was worth, at the time of passage, over $700 billion. And that was just one of the many lending facilities that are being used to prop up the financial markets. All told, we are spending anywhere between $14-25 TRILLION on these programs, which essentially entail keeping the markets on artificial life support. As I've pointed out various times, the FED has been very active in offering cheap credit support to these banks. The markets continue to oscillate primarily because of the Central Bank's POMO (Permanent Open Market Operation), along with the Treasury Department's PPT (the... Read more