Fed ready to provide new lending program: Bernanke

[JohnQPublic]

Fed ready to provide new lending program: Bernank (http://www.marketwatch.com/story/fed-ready-to-provide-new-lending-program-bernanke-2011-10-04)e


"WASHINGTON (MarketWatch) - The Federal Reserve could start a new broad-based lending program to address a potential run on U.S. financial system if the European crisis worsens, Federal Reserve Board chairman Ben Bernanke said Tuesday. "We would make sure we would stand ready to provide as much liquidity against collateral as needed as lender-of-last-resort for our banking system" Bernanke said in testimony to the Joint Economic Committee of Congress."

[Neuro]

"We would make sure we would stand ready to provide as much liquidity against collateral as needed

If you ever doubted that the Federal Reserve eventually will hyperinflate the dollar to oblivion!

[madfranks]

This is the first I've heard open discussions about the possibility of runs on the entire US financial system. Once the real big bank runs start, I think the fed could print as much money as they want to back up as much collateral as they want, but hyperinflation is just as much a psychological phenomenon as a monetary phenomenon, and the dollar may not survive if that happens. Imagine the fed delivering everyone all their money at once, what sort of inflationary punch that would be.

[Neuro]

Madfranks wrote:

but hyperinflation is just as much a psychological phenomenon as a monetary phenomenon
Bingo! I would argue even more a psychological phenomenon. It happens when a critical mass of fiat holders, realizes that they will not stop increase the printing... I think I read somewhere that the entire Weimar monetary supply at the 30th of November 1923, would only buy a few ounces of gold, meaning that in the end they couldn't keep up the printing to the deteriorating value of the fiat. Now with electronic fiat that hurdle has been removed, which may keep the hyperinflation going for a couple of more days...

[DMac]

Madfranks wrote:

Bingo! I would argue even more a psychological phenomenon. It happens when a critical mass of fiat holders, realizes that they will not stop increase the printing... I think I read somewhere that the entire Weimar monetary supply at the 30th of November 1923, would only buy a few ounces of gold, meaning that in the end they couldn't keep up the printing to the deteriorating value of the fiat. Now with electronic fiat that hurdle has been removed, which may keep the hyperinflation going for a couple of more days...


A couple more days, then it's zombie time.

This whole thing makes me sick. I'm getting collapse fatigue.

[gunny highway]

Fed ready to provide new lending program: Bernank (http://www.marketwatch.com/story/fed-ready-to-provide-new-lending-program-bernanke-2011-10-04)e


"WASHINGTON (MarketWatch) - The Federal Reserve could start a new broad-based lending program to address a potential run on U.S. financial system if the European crisis worsens, Federal Reserve Board chairman Ben Bernanke said Tuesday. "We would make sure we would stand ready to provide as much liquidity against collateral as needed as lender-of-last-resort for our banking system" Bernanke said in testimony to the Joint Economic Committee of Congress."

when we get to the point that we turn to the "lender of last resort" to save us, then you know we're screwed.