St Louis Fedhead Bullard Forgets the Important Part in Fed Asset Sales, Oopsie!
The Federal Reserve could sell some assets later this year in an effort to whittle down its bloated balance sheet to avoid inflation, a senior Federal Reserve official said on Monday.
The Fed's purchases last year of longer-term Treasuries and other debt, undertaken to help revive the economy, were financed by adding cash to the financial system. But leaving large amounts of cash sloshing around as the economy strengthens risks fueling inflation.
"Maybe you get in the second half of 2010 or something like that, if things are going pretty well, maybe then you'd sell a little bit at that point and you'd try to see how the market reacts," St. Louis Federal Reserve Bank President James Bullard told Reuters in an interview.
Don't pull out too quick there, killer!
Bullard said markets would be disrupted if they came to believe the Fed was planning large-scale sales of mortgage-backed securities. However, he said the idea of gradual sales as a strategy is under discussion.
"Selling has more sympathy than you might think. It's more a question of timing and speed," Bullard said.
"You'd kind of want the situation to be back to normal in some kind of time frame before the next storm comes for the economy so that at that point you'd have a fresh set of tools and you can react at that point," he said. "There will be a lot more discussion going forward about how exactly to do this."
I hope at some point in the discussion period someone asks the most important question of all, which would be "who the fuck is going to buy these garbage assets the Fed is holding shit tons of?!"
Surely that has come up as these are brilliant economic minds we're talking about.
LMFAO I couldn't even say that one with a straight face. Sorry, I did my best.
He's an optimistic little bastard, that Bullard, but he's missing the most obvious piece of the puzzle: DEMAND. Come on, don't the little kindergarten economic students learn this in their first week of Econ 101? You ain't sellin' if no one's buyin', how the hell do you expect to pawn this crap off on anyone?
Bwhahahahahaha LOL. Good luck with that.