Bazooka Ben Bernanke?

May 29, 2009

You’ve heard of Helicopter Ben Bernanke. What about Bazooka Ben? Barclays Capital strategist Michael Pond thinks it’s time for the Federal Reserve to pull out the really big guns and announce it will buy $1 trillion in U.S. Treasury debt in order to counteract a recent jump in Treasury and mortgage interest rates.

The Fed has already said it would buy up to $300 billion, but this week’s bond market drama suggests that investors are beginning to worry that this isn’t enough.

“We tongue-in-cheek believe that the Fed needs to take the approach from former Treasury Secretary Paulson’s quote at a July 15 Senate Banking Committee meeting that ‘if you have a bazooka in your pocket and people know it, you probably won’t have to use it,’” Pond wrote in a note to clients. “While this didn’t work for Secretary Paulson, as he eventually had to use that bazooka and more, the Fed should try to come up with a big enough number that the threat of that purchasing power alone will be enough to keep rates low. For now, we believe that number is $1 trillion and recommend that the Fed make an announcement soon, rather than wait for its June 24 meeting.”  

What’s your take? Time to bring out the big guns or has the Fed printed enough money already ?

One comment

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If printing money actually solved problems we wouldnt be in this predicament. The mere fact that there was a bubble from the Fed’s last round of tomfoolery, combined with the fact that it DID pop, is proof enough that these actions border on criminality. If he screws things up so bad that the American Idol gets turned off, then the pitchforks might come out. This mad money printing has already costed the average family over $500 in increased energy bills just in the past 2 months, practically ensuring another wave of defaults. A trillion more and we’re looking at smashing last years oil price records. If they do it, it will remove all doubt as to whether the Fed is a criminal racket. My guess is that Ben might be having second thoughts about printing because he knows a) it wont help anyone except wall street parasites for a short amount of time, and b) he’s likely to find himself swinging from a lamppost one day as a result. The general public is beginning to catch on to this money printing racket, and that has never happened in the history of the Federal Reserve. Any parasite will tell you, in their own way, that it isnt wise to actually kill the host…