In a statement, the Fed said it would reinvest earnings from maturing
mortgage debt into U.S. Treasury debt, with an eye toward keeping
long-term borrowing rates low. The move aimed to reassure investors who
are hoping the Fed will do more to spur the economy and observers who
fear that more debt will ignite inflation.
Comment by:
Olde Reb (#020546) Entered on: 2010-08-11 08:59:41
That is another way of saying that the toxic MBS the Fed took from the banks and gave T-securities will be moved from the ledgers of the Fed and returned to the market at full value. The taxpayers will pony up to pay for the T-securities by inflation. The NY banks and Wall Street will be rescued by the Fed and the people will pay for the new whip.
