QE3/∞! Fed Announces OPEN ENDED MBS at $40 Billion /Month!!!

  • QE3 QE is HERE!
  • Fed to buy $40 billion/month in MBS!!
  • Fed will increase purchases over $40 billion/month if required
  • ZIRP extended to 2015
  • Silver with a last of $34.94, gold to $1773!!

QE2 was $900 billion…and it was announced nearly 2 years ago.  Roughly $450 billion/year if averaged by time until QE3 was announced.
Today’s announcement equals $480 billion/year, with the explicit statement that it will be INCREASED FROM THIS BASELINE AMOUNT AS NEEDED!!!  $480 billion a year is the NEW BASELINE QE!!
Plus ZIRP extended, plus Twist extended, plus every other acronym for money printing Bernanke could pull out of his a**!!

Folks, This IS the BIG ONE!!!  Gold and silver have responded accordingly.  New all-time nominal highs for BOTH metals are now locked and loaded.

For those who have not sufficiently backed up the truck we suggest you consider calling SD Bullion now at 614.300.1094, as this train is DEFINITIVELY LEAVING THE STATION!!

Bernanke’s press conference can be seen LIVE at SD at 2:30pm EST


Full FOMC Statement below:

For immediate release

Information received since the Federal Open Market Committee met in August suggests that economic activity has continued to expand at a moderate pace in recent months.  Growth in employment has been slow, and the unemployment rate remains elevated.  Household spending has continued to advance, but growth in business fixed investment appears to have slowed.  The housing sector has shown some further signs of improvement, albeit from a depressed level.  Inflation has been subdued, although the prices of some key commodities have increased recently. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.  The Committee is concerned that, without further policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions.  Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.  The Committee also anticipates that inflation over the medium term likely would run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per monthThe Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.  These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months.  If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.  In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.  In particular, the Committee also decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen.  Voting against the action was Jeffrey M. Lacker, who opposed additional asset purchases and preferred to omit the description of the time period over which exceptionally low levels for the federal funds rate are likely to be warranted.