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Wednesday, November 3, 2010

Fed to Print up to $900 Billion

The federal reserve announced today that it intends to purchase $600 billion in longer-term treasuries by the end of the 2nd quarter of 2011.  It also intends to reinvest principal payments from agency debt and agency mortgage-backed securities into longer-term treasuries over that same period of time.  The Fed makes the following statement to sum this activity up:
Taken together, the Desk anticipates conducting $850 billion to $900 billion of purchases of longer-term Treasury securities through the end of the second quarter. This would result in an average purchase pace of roughly $110 billion per month, representing about $75 billion per month associated with additional purchases and roughly $35 billion per month associated with reinvestment purchases.
Now most articles today only ran the $600 billion and the fact that it was only $75 billion per month and said they were disappointed that it was under $100 billion per month, well I guess they can cheer up they got $110 billion per month. Yah, now our money is worth less (again).

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