Fed launches bold $1.2T effort to revive economy

Today's announcement is huge, at least with regards to pushing the US/world further down the inflation path.

The article below states that the US Fed's balance sheet was under $900 billion just this past September. They mentioned in the article that it is now $2 trillion, but that might be before today's annoucement. I heard an interview today, where the expert stated that today's annoucement pushes the Fed's balance sheet to $3 trillion. In the article below, they state that it could be over $5 trillion in a couple of years.

Going from $900 billion just last September to $5 trillion in a couple of years is earth shattering. The world has never seen this kind of money being tossed around before. I haven't even mentioned the $10+ trillion of additional debt that the US owe. And, how about the $60 tillion or so that the US will have to come up with over the next couple of decades to not only service the debt, but to pay for social security (and other programs) as the baby boomers begin to retire.

Unlike China, and even Russia, the US doesn't have any reserves. They are broke. As mentioned, they are in a big time debt hole, and their economy can't even seem to produce enough to cover annual expenditures, never mind addessing the debt situation and social programs.

Where will all the money come from? Printing presses of course. They call it quantitative easing, but it's really good ole fashion running trees through the printing presses. The US dollar will be slaughtered - it's just a matter of time. It may not be complete Zimbabwe style, but they sure seem to like that path. What does a burger cost in Zimbabwe these days, maybe $1,000 Zimbabwe? How about in the US, maybe $5? I guess people better enjoy the taste of a burger while they can. It might not go to $1,000, but even $7-14 would be quite expensive, especially since everything else would be eating up people's income at the same time.

That's what inflation does.

That's why gold is a good place to reside during these times.

Here are parts of the article:

By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer

"With the country sinking deeper into recession, the Federal Reserve launched a bold $1.2 trillion effort Wednesday to lower rates on mortgages and other consumer debt, spur spending and revive the economy."

"To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac."

"The dollar, meanwhile, fell against other major currencies. In part, that signaled concern that the Fed's intervention might spur inflation over the long run."

"The goal behind all the Fed's moves is to spur lending. More lending would boost spending by consumers and businesses, which would revive the economy."

"Where does the Fed get all the money? It prints it."

"The Fed's series of radical programs to lend or buy debt has swollen its balance sheet to nearly $2 trillion — from just under $900 billion in September. Sohn believes the Fed's balance sheet could grow to $5 trillion over the next two years."

"Across the Atlantic, the Bank of England last week began buying government bonds from financial institutions as it turned to new ways to help revive Britain's moribund economy. The Bank of England, like the Fed, already had lowered its key interest rate to a record low of 0.5 percent."