Bitcoin Forum

Since Janet Yellen has confirmed that buying stocks is on the table for the Federal Reserve (http://www.zerohedge.com/news/2016-09-29/despite-japanese-failure-janet-yellen-suggests-buying-stocks-help-increase-spending), what can we say, if not remain speechless?

Let's see, I guess the simple explanation is that the elites have become increasingly naked and desperate in their attempts to support what remains of the global asset bubble, to hold on to the last hopes of keeping their power and privilege.

However, I have considered the possibility that holding on that privilege is not strong enough a motivation for the sheer audacity and desperation of these acts: if the global asset bubble results in a true hard landing, even if that is ultimately a not-so-bad outcome for the world among all the possibilities at this juncture, it may be very bad indeed for the financial elite (https://bitcointalk.org/index.php?topic=1583844.new#new).

MUST maintain stability...  MUST maintain stability.

Jeez, I knew it was bad but I didn't know that is was THIS bad. The fed saying that they might want to start buying stocks is a sign of massive economic regression, and for anyone reading this that doesn't know all of this yet, it basically means that the institution that prints all of the money for the American economy is considering buying stocks, meaning that money can literally be printed into the stock market now.

A real shit show. Great.

Here's a funny thought. Will you all be happy if the Federal Reserve declares that Bitcoin might be a good investment and announce that they are buying and will be holding for the long term?

What would it mean for Bitcoin and the Bitcoin economy if "money can literally be printed" into the Bitcoin market now?

If the Fed does buy the stock, that is the end of the US economy as a free market. that will be similar to Soviet Union.

As if they did not already do that anyway.    

But now that they publicaly announced it, and probably accelerate the process the stock bubble will grow increasingly big (and inevitably crash at some point). And all that printed money will lead to a lot of inflation and it's just all going to become one massive shitstorm that would make the 2008 financial crisis look like a joke.


Bitcoin would be worth more in dollars but not neccesarily in goods.   

So a Bitcoin would be for example $25,000,000 but a bread would cost $41,000 so you wouldn't really gain much from it.   

Except it takes the market a while to respond to the inflation so you might me able to be quick enough to profit from it. If you can quickly buy items in high demand that don't spoil very fast for a price that is relatively low compared to what it should be due to all the printed money, than you get more value from your Bitcoin.       

However when the Feds do this the trust in the dollar would collapse so people might spend actual money on buying Bitcoin which might rise the actual purchasing power by a lot.   

Although I wonder what would happen if enough idiots sell their Bitcoin too cheaply to the Feds and the Feds will end up having like 10 million Bitcoin or more.     

Will they be able to control and destroy the Bitcoin market as the ultimate whale? I don't know. I really don't know if one person holding a lot of Bitcoin can harm Bitcoin. I think it might, but not sure.

The stock market will most likely get permanently frozen and Bitcoin could go that route as well. We will have to see how this affects the comfortable people.

Its puzzling that such a thing is allowed but the USA never seizes to amaze when it comes to economic control.
The market is already inflated for different reasons and having the FED involved should just make the amusement park ride that much more swingy.

I don't share your audacity, but only because the Fed is a private company. They're allowed to do that shit. And if they lose all their money, they'll print more and fuck us all over.

The other way to think about it is that the Fed is sick of losing value on their conservative dollars on hand (just like the rest of America) so they're turning to the stock market to make some return.

Scary indeed. Will the voting public do something about it? No. None of them care. And if shit gets worst they'll just blame the party of whomever is President at the time. Sad shit, for sure.

Central banks are publicly or privately owned, depending on the country.  But 'private' doesn't really mean private, and 'public' is never quite the same as a govt. department either.  The reason its status is never clear is that the system is based on deception.

Since central banks hold the monopoly on money issuance, granted by the public, they can hardly justify doing anything on pure profit motive.

I think whatever a central banks does to prop up selected shares can only have a temporary effect, in the final analysis.  Companies 'supported' by central banks tend to get fat and lazy, and economies that have these supports tend to become uncompetitive, and their currencies tend to be unstable.

In fact, if you take a cynical line, this very same type of thing, the direct support of companies by central banks, was the poison pill placed into the Japanese economy by the immediate postwar American caretaker administration.  Over the next decades, this systemic 'conflict of interest' ensured Japan would serve as America's financial and economic vassal rather than true competitor.  This means that US elites certainly know better.  That they're considering swallowing this pill may point to desperation.

The goal of the central bank is almost never to make money.  The publicly stated goal is almost always some kind of public good.  The real goal is always to stabilize the state-bank alliance to extract wealth from the rest of the economy by issuing and propping up financial assets.

What they will do, if they loose ? Buying stocks not always give profit. They will buy a lot and then loose all investment ...  ;D Just imagine how angry will be Obama in Whitehouse, when receive news, that Fed loose some hundreds millions yesterday.  :D

There are other central banks (like the Swiss National Bank), who are already doing it. In my view it's not necessarily problematic. In fact the central banks might even get more valuable assets than by acquiring debts of other countries.

However, central banks buying stocks becomes problematic, when central banks acquire stocks of their own country to an extent that supports stock valuations. This can be considered market manipulation and immoral expropriation, especially since the Fed generates money out of thin air, but acquires real assets with it.

For me it's interesting that the Fed talks about buying stocks, while acquiring gold would be the traditional option. Maybe the Fed wants to prevent that safe haven currencies appreciate in valuation.... clearly, central bank policy has reached a a point of no return. Bankers are desperate to buy time, before the fiat system collapses.

ya.ya.yo!

And yet some people still think it's the unregulated systems that are dangerous and easily manipulated.   ::)

Still, it's the standard neo-lib mindset.  Par for the course.  Fits right in with the rest of their pseudo-economic ideology.  Just put it over there with the rest of the corruption.

The Swiss National Bank didn't buy American stocks out of the goodness of their heart -- there's got to be some exchange of favors with the Fed, directly or indirectly.

It's part of the design of the imperial system that the central banks at lower rungs than the Fed (ECB, BoJ, SNB) are more market-manipulative than the Fed.  So that power resides firmly at the center, the center must be perceived to be the most market-friendly, and its assets must attract the most confidence.  (These other central banks are also the first to get into negative-interest territory.)

I never really believe in profit motive when it comes to central banks.  I can't see any moral or profit-driven reason for central banks to try to make money, but the profit motive can be a convenient justification for some actions.

Well, believe it or not, a lot of educated people out there (and most mainstream economists certainly) still believe we live under a basically free market, where people who are very rich deserve what they have because other people want what they have to offer.

Buying stock is a good idea when the PE ratio is low. But it is very high at the monent. It is better not to buy.

Weren't QE's essentially doing just that?


It seems to be next to impossible to keep the ratio constant in such circumstances. Gold and Bitcoin would be the ultimate winners for the simple reason that the dollar will be avoided at all costs. Also, bear in mind the likely repercussions across the world if inflation in the US hits two or three digits range. Who would want to hold the American money, Saudi princes? They are already jumping ship.

this is just crazy and it is only a matter of time before the whole house of cards comes crashing down.

The only reason the Fed might do that would be to stabilize the value of the dollar by pegging it to Bitcoin (in the same way central banks did with gold and silver for centuries.)  The dollar price of Bitcoin required to support the global stock of dollars and Treasuries must be astronomical.  I don't think anyone here will have to work at that point.

But that would be a last resort since it would be bad for the reputation of the central banking system.  (It would effectively be admitting, never mind about all the talk that an elastic money supply is superior for the economy, let's go back to the gold standard, or something like it.)

I believe the following list are the elites' plans for the end game of the global asset bubble (listed in descending order of their preference.)  My guess is they are moving on all fronts, so they can implement each plan when the more preferable ones turn out to be impossible.

1. A big growth factor appears.  Say, true breakthrough in technology, or a big segment of the poor world population becoming productive rapidly.

2. A major conflagration occurs (global war, nuclear terrorism, etc.)  As happened after the World Wars, their hope is that the imperial system's victory at the end will enable it to re-design the entire system and blame all 'financial irregularities' on the event.  But they have to do this very carefully.  They have to ensure the empire does win at the end, and that the victory is morally justified.  (To this end it would be in the empire's interest to cultivate and protect really bad actors like Hitler and ISIS in the early stages.)

3. Do whatever is necessary to maintain the asset bubble, for now, until either of the above is achieved.

4. If none of the above is possible, effectively peg their currency against non-state-issued hard monies (gold, silver, and Bitcoin) to achieve stability.  The pegging price will be very high to achieve stability and the high inflation necessary to eat away the current debt overhang, plus letting the authorities stimulate economies to keep the economic pain from being socially or politically destabilizing at the center of the empire.  (This would most likely be done via 'helicopter money.')

All of the above have one over-arching goal in mind: avoid a hard-landing via a bursting of the global asset bubble.  If the latter does happen, the economic pain will be such that the bankers will be blamed for everything and suffer terribly (since the politicians will have the power and public sympathy to divert all of the blame to the bankers.)

(BTW, I don't think the Fed will announce a profit motive for any action except as the best available excuse for something they want to do anyway.  Since the public granted it the monopoly of money creation, it must justify each action as a public good.  In reality, central banks were not created primarily to make money anyway -- they were created to maintain the state-bank alliance to jointly take wealth from the rest of the economy by issuing and artificially propping up debt and other financial assets.)

Yes it is crazy!
But it will happen,one way or the other!
The ECB is also takling about that option! I mean they are already buying corporate bonds! Who gives a damn that they are creating competitve advantages to certain companies with that kind of action?!
Jesus let it rain some brain please!!

Hey Bob! There is a bubble. Time to call bullshit. -On what? On every fucking thing.

Abandon ship!

They are buying the corporate bonds. But if they buy the stocks, that will big problems in the sotck market.

Never would imagine this to be a bad idea, but the reality of all this would surely spark curiosity on the effectiveness of this whole scenario.

In all honesty there tends to be success to pull around the economy, although currently the US is trying to compete with other global markets to withstand the participation worldwide.

At least they're trying, like with all American politics let's hope this works.

Considers buying stocks?  You realize even in their unaudited published numbers they claim to have purchased more than 4 trillion in equities...

https://www.federalreserve.gov/monetarypolicy/bsd-federal-reserve-banks-financial-information-201608.htm

Many believe the real number is >20 trillion dollars...

In terms of 'helping' the economy, the elites really have one trick: issue and prop up paper assets.

The problem with doing more and more of this is that the economy will become increasingly centrally planned rather than market-based.

Even if there is no political or market rebellion, or market crashes due to badly managed fragility, this would eventually (if allowed to run too long) create a neo-feudal society.

That SOMA holding looks like a bond portfolio.  More than 95% of the net earnings from the holding is interest...

The Swiss National Bank has purchased US equities.  I don't think the Fed has, yet.

Well, Bitcoin can't be printed, that's the thing. Dollars, and stock, can be. Bitcoin has to be mined, and has a hard limit.

This would do basically next to nothing to help the economy, and would likely just be a net negative over the longer term. If the fed starts to buy stocks they're doing so to keep the stock market from collapsing, meaning that the economy is bad and it likely will remain bad until it finally gets to cycle through. This also artificially adds even more money to the economy, however it is less detrimental than direct monetary inflation (hypothetically).

That is right. That means the bitcoin price will rise again and again against the fiat or the stock markets.

That's actually really interesting, I didn't know that information was available.

I would be interested to know your (OGNasty) or anyone elses opinion on the Fed buying stock.
Is this a necessary diversification of investments, a desperate attempt at stabilization, or something else?

so why do they keep on purchasing huge assets and equities ,what is the core purpose,what ever it is it belong to the nation since they are purchasing it with tax payers money

Maximising returns (through diversification) is not an objective of the Fed.
They would be looking at maintaining a stable environment, conducive for growth.

Haha thats totally funny but you have pointed out a huge possibility that will happen if in case dollar regression or dollar will fall face defeat and fall down. Bitcoin may replace dollar it is possible, if not one fiat currency will replace dollar in its throne. But possibly before the regression the FED will buy bitcoins and other digital currencies to be safe from whats going to happen.

That is right. The Fed just want to keep the balance in the system and people still have confidence in dollar.

As I wrote above, this link doesn't show the Fed has already bought stocks.

What we have is not capitalism but socialism.  It is a 'financial' and not 'economic' type of socialism as in the old USSR.  Only money and other financial assets are controlled by the state (and their allies the banks.)  This makes it possible for the system to pretend to be capitalist, since most people don't understand money, and top economists don't want to look at things the right way.

When this system is strong, the deception works well, as most of the economy, on the surface, works under free supply and demand.  When this system has grown weak (as now,) the elites are forced to tear off the deception and expose its core socialist nature.  If the alternative is market collapse, they would rather make the system more obviously socialist.

This is the core nature of the modern world.

Unless the Federal Reserve started in the mining business or had access to quantum computing and could mine all the coins immediately then there’s no risk of turning the printing machine in bitcoin

This isn't exactly new news here.  There was talk years ago of plowing Social Security funds into the stock market--can you imagine the kind of havoc that would wreak when the market crashes?  Government ought to stay away from the stock market.  Unfortunately the US likes to bail out bankers and Wall Street shitheads, thereby destroying the concept of 'free market'.  They're insane.  And you wait if Trump gets elected.  We be screwed, baby.

Knowing the US government, they'll have bought anything and everything to keep businesses (meaning corporations) afloat and get them through tough times. Corporate bonds or not, it's a bad thing for a lot of people. Noticeable signs of a weakening economy and something for economists to keep their eyes on.

I have been hearing for so long that the economy is about to crash, yet we manage to keep afloat. I'm betting we will survive whatever comes.

It is not that the U.S. government likes to rescue bankers and Wall Street, they must save them because they are one and the same, so when they lose a lot of money in the wall street casino the government must save them with public money.

The Fed criminals may want to reconsider their decision now and instead of buying stocks rather think about emigrating somewhere in their entirety. Though I don't think they will be welcomed anywhere.

Right, the top of the world is an alliance between politicians and bankers that use public power to prop up the values of money, debt, and other financial assets.

In this alliance, politicians provide the state power, and bankers provide the financial know-how.  The central bank is useful as a stabilizing force to keep the alliance alive, by making sure neither politicians nor bankers issue too many assets themselves and destroy the golden hen immediately.  (This is accomplished by having control over the base asset, money.)

Japs do this for years... Look how it turned out for them. Their gov bought almost every stock there is. Their real estate business ruined. Their companies fckd.

Negative interest rates, helping ruined companies... Those are not the solutions.

If it is going down, let it be. Helping them artificially will only make things worse in the future.

It is like letting a cheater to pass the exam as a teacher, even if you saw him/her cheating. If they don't deserve to go on, they shouldn't have.

It is better now than tomorrow.

If not, they come up with craps like this:

TOO BIG TO FAIL.

No it is not fucktards.

Japan is different. It is a country of senior citizen. The population is not rising but falling. American is still growing.

After Trump builds his Trump Wall along the US-Mexico border, sets a lot of other barriers to keep immigrants from entering the country, and deports the rest of them all, the US population may start declining as fast as that of Japan, or even faster. Maybe, the Fed had been anticipating his victory, just like the IRS from another (https://bitcointalk.org/index.php?topic=1590009.msg16965141#msg16965141) thread, and acted in advance?

The central bank system is going to destroy the economy.

This elite is going to die and be replaced by another elite soon.

aw I never thought it would been so bad than i though If the Fed really buy the stock that is the end of the united states economy as a free market. if this will be very bad in economy it could crash the cycle of economy i would be better get saves and wait for the balance of the economy . do you think dollar will be crash ?

LOZ Trumo is very local from the very start so I think since he won in US Presidency they are recalculating their actions. I think its good for US if Feds considering buying stocks.

The Italian Renaissance (in the 1400s) was the last true free market economy in the modern age.

Otherwise, we have a system that pretends to be free market.  Yes, Four Seasons competes freely against Ritz Carlton, but the size of entire luxury hotel market is determined by how much money central banks put into economies.

During 'normal' times, most people believe we have a free market, because the manipulation of money and debt is under the surface.  The more the elites get into trouble (like having to fight post-crisis deflationary forces over the last eight years,) the more they are forced to expose the non-free nature of their 'market' system, such as with 'quantitative easing', i.e. printing money.  But they will do it, if they have to.

Because the goal is never to maintain a free market.  The goal has always been to manipulate the economy to give unearned wealth and power to politicians and bankers.

That can hardly be argued. But should we really think that this wealth is so unearned? They grabbed the power, and they are profiting off it. Or do you really think that anyone else who could dethrone them and take their place would behave differently in the end? The new elites would have to fight with the old ones to take their place, but they would be fighting not in the name of equality, fraternity and liberty for everyone, but just to make profits themselves.

If the public allows a criminal justice system (as they did in the past) that allows officials to torture people into confession in order to finish their assigned cases, certainly, it doesn't matter who the officials are, in most cases.

So the key is public awareness.  This will be a multi-decade, if not multi-century, struggle.

Once awareness is formed, the solution is quite simple: make money a totally market based commodity by adding money 'management' to the list of Enlightenment prohibitions against the state.

The stakes are much higher than theft.  You can draw a pretty straight line from money manipulation to almost all major modern social ills, including pollution, addiction and other manifestations of unhappiness, wars and terrorism.