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The Fed Could Have Bought California & Texas… or All of China & Japan's Treasuries With QE Money

Phoenix Capital Research's picture




 

The Federal Reserve has spent over $3.2 trillion in the post-Crisis era.

 

The bulk of this money printing has gone towards buying garbage mortgage securities or US Treasuries from Wall Street.

 

Because we’ve reached a point in time at which $1 trillion no longer sounds like a lot of money, we thought we’d go through the exercise of assessing just what the Fed could have done with this money besides give it to Wall Street.

 

With $3.2 trillion, the Fed could have:

 

1)   Mailed a check for $10,223 to every man, woman, and child in the US.

 

2)   Bought back all of the US debt owned by China, Japan, Belgium as well as the debt acquired via investors through the Caribbean islands.

 

3)   Bought all of France’s economy for a year (or the UK or Brazil depending on its preference) and still had $600 billion or more left over.

 

4)   Performed leveraged buyouts of California and Texas.

 

5)   Funded NASA for the next 188 years.

 

6)   Treated every person on the planet to $200 five star dinners at one of New York’s top restaurants, along with a night’s stay in the Big Apple.

 

7)   Bought every human being on earth a PlayStation 4 gaming console… and still had enough money left over to buy all of Peru and Ireland’s economies for a year.

 

It’s quite impressive, isn’t it?

 

We’re repeatedly told that the Fed has to engage in QE to help the recovery and create jobs. But the facts show otherwise. The economy has added nearly 9 million jobs.

 

But the Fed could have spent the $3.2 trillion to create 12.8 million jobs in 2009, each paying $50K per year, and still be making payroll for them today.

 

Obviously, that’s an absurd notion, but then again, spending $3.2 trillion on anything without any evidence that your policies are really working is absurd (job growth remains anemic with the recovery being the worst in 80+ years).

 

Indeed, QE failed to put a dent in Japan’s jobs picture over the last 20 years. It also failed to do much for the UK. Why would it somehow be different in the US?

 

This concludes this article, swing by www.gainspainscapital.com for a FREE investment reports Protect Your Portfolio, which outlines how to protect your portfolio from bear market collapses.

 

Best Regards

 

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

 

 

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Tue, 05/06/2014 - 19:32 | 4734078 Leraconteur
Leraconteur's picture

We could have gone to Mars 5 to 10 times and set up 6 or more colonies, built a city on the moon, built 20 more ISS space stations, built out the Shuttle fleet to 16X times it's maximum size, created a fusion or thorium crash program to create those techs in a few years, or built a large Hadron collider that would be the size of a continent.

Nope, bailing out bankstas was more important.

This was the single most disgusting aspect of post-2008, IMHO. It was always said of many science projects 'we cannot afford it'. Well, WE COULD, we simply choose not to. Our values were, and are, not ready for it.

Appalling.

Tue, 05/06/2014 - 18:56 | 4733985 TheRideNeverEnds
TheRideNeverEnds's picture

But if they had done any of that then the FEDs shareholders would have had to eat all that bad debt which would have been no bueno.  It may have even caused them to cut back on the staff for their third homes or worse; sell one of their private aircraft.  Now if you can't afford to maintain your private jet then what is the point of having the helicopter on your roof to take you to the airport?  I mean 'cmon man, is that even living?

Tue, 05/06/2014 - 18:45 | 4733942 Grouchy Marx
Grouchy Marx's picture

By agreed-upon payoffs, they could have convinced POTUS, SCOTUS, and every  federal congressman to retire and agree to never run for office again. 

Oh, the thought! 

Tue, 05/06/2014 - 18:07 | 4733743 angryBuddhist
angryBuddhist's picture

When one takes into consideration that the popular view is that homeowner mortgage delinquencies were responsible for the current economic crisis, one could argue that the Fed could have mitigated that problem instantly with a onetime payment towards those mortgages by paying $75,000 towards each of the 45 million mortgages currently in the US. This would put a huge cash injection into the hands of the people of this country instead of the elite. Imagine that this payment be applied for all the payments due for the next several years (if not paying off older mortgages entirely) and you would have created the biggest economic shot in the arm imaginable that would send the economy roaring along virtually overnight.

To be totally honest, I would think that this would have a serious downside in terms of making people dependent on govt handouts and subsequentially totally irresponsible with their cashflow, much the same as it is well established that Wallstreet has become addicted to govt handouts and no risk is too great for them to speculate on. With that said, it is my opinion that ZERO QE would have been the proper course of action and let the laws of economics and nature take their apppropriate course. People and copporations NEED to be allowed to fail if the US economy is ever going to be strong and healthy again. Unfortunately, this doesn't look like it is in the cards so long as the Fed is in charge of things.

Tue, 05/06/2014 - 19:39 | 4734095 Leraconteur
Leraconteur's picture

Sadly FIXING the issue was not the point - maintaining banksta power and control was the reason for the bailouts. They still want the end consumer a debt slave, paying their mortgage would not keep them in chains.

The FED *could* have let the big 20 fail, set up 20 banks with 100 billion in seed capital each to create credit to avoid a crippling depression. 100 billion leveraged 9x times 20 banks, a sane ratio, would result in 18 tn in fresh credit. The bad banks would be gone, their employees in prison, their assets clawed-back, and we would have had 1.2 tn left over.

Hire regional USA bank managers, the old school, midwest, dull types, to run these. Imprison everyone else. Give the Top 20 six months lead time, forbid them to buy anyone or anything, times up, you must book all your bogus SIV's and such. Transfer their depositors to the new banks.

Ah...fuck it. I will just leave and travel the world.

Tue, 05/06/2014 - 17:18 | 4733623 Scritchy
Scritchy's picture

Dear Fed: 

Allow us to show you how a stack of 3.2 trillion dollar bills would stretch from here to uranus, and then some.

 

Tue, 05/06/2014 - 16:32 | 4733403 optimator
optimator's picture

And how would that have benefitted the Bankster Elite?  Sheeeesh!

Tue, 05/06/2014 - 15:49 | 4733171 I Write Code
I Write Code's picture

Chillax, dude, a trillion dollars is just one coin anymore.

Tue, 05/06/2014 - 15:37 | 4733097 ebworthen
ebworthen's picture

The FED could have sent I and everyone else our $3 Million tax free bailout.

That is, if they gave a damn about someone besides the banksters, which they don't.

Tue, 05/06/2014 - 14:40 | 4732829 newworldorder
newworldorder's picture

What is the point of this article? The FED could have or still can do many different things with the money it prints from "thin air." It does however, do the one thing that it has evolved into very well - TO BE THE DE FACTO BACKSTOP,- Central Bank to Central Banks and TBTF banks throughout the world. There really is nothing else to add.

Tue, 05/06/2014 - 14:38 | 4732785 atthelake
atthelake's picture

So, when Americans decide to take action, will we take back our assets from those who looted the treasury (and everything else)?

 

And, we all know, QE was never intended to help Americans. QE is only supposed to help bankers and the traitors they own. We all know that, right?

Tue, 05/06/2014 - 19:59 | 4734153 mjcOH1
mjcOH1's picture

'We'.  'They'.   Let's for the sake of argument use the 1917 terms and go with 'Reds' and 'Whites'.

The Reds will seize capital.   The Whites will have capital being seized.   'Will we take back OUR assets?' will be a 'Yes'....if you're a Red, with no property, perceiving yourself to be entitled to the property of the Whites.    It will be a 'No', if you're a White, who actually owns property being seized.  

Not that history repeats itself or anything.   Or that I'd advocate walking across the border with what you can carry, burning the rest, and letting the looters find out who goes to the gulag for lack of sufficient revolutionary zeal when this eventually happens.

Tue, 05/06/2014 - 13:49 | 4732579 Conax
Conax's picture

After the '08 debacle I read they distributed $17 trillion to the banks, some of which were headquartered in foreign countries.

They could have financed WWI and WWII with all this cash.

And look what we got for ruining the finances of our great grand children.

WWIII, doom and gloom.

They should have sent out the checks. We'd have retired debts and kickstarted the consumerism they say they love so much.

Tue, 05/06/2014 - 13:45 | 4732553 dontgoforit
dontgoforit's picture

Shut up and eat yer peas!

Tue, 05/06/2014 - 13:19 | 4732426 swmnguy
swmnguy's picture

EVery one of these suggestions would have been better for the US economy than what they've actually done.  You never borrow money to pay old debt.  You borrow money to do something productive enough that you can pay off the old debt and the new debt. 

But any actual productive solution would have required that the people who were insolvent have to face that fact and proceed accordingly, and they're the ones who own and run the Fed.  So of course anything actually productive is the last thing they would do.

And $3.2 Trillion is an awfully low estimate of how much this has cost us.  I've seen well-defended estimates at 4x this amount.

Tue, 05/06/2014 - 13:34 | 4732500 wearef_ckedwith...
wearef_ckedwithnohope's picture

" I want my Maypo! ".  (too)  F_ckin' bank serving Fed.

 

And don't forget the $16 trillion shovelled to the Banks, etc outside of this as discovered by the (RIDICULOUSLY ONE-TIME Fed audit)

Tue, 05/06/2014 - 13:17 | 4732423 Son of Loki
Son of Loki's picture

<< The Fed Could Have Bought California & Texas… or All of China & Japan's Treasuries With QE Money >>

... but they gave it to a handful of Bankers instead.

Tue, 05/06/2014 - 13:11 | 4732400 LawsofPhysics
LawsofPhysics's picture

"Bought back all of the US debt owned by China, Japan, Belgium as well as the debt acquired via investors through the Caribbean islands." -

 

Hey dumbass, they are working on this already.

'merica will be "fully owned" soon enough.

Still doesn't make it a good thing.

Tue, 05/06/2014 - 14:25 | 4732748 cro_maat
cro_maat's picture

LOP - This I believe is the actual end game of the FED. If we remember that the USSA is actually a corporation and the FED is owned by the member banks (in turn owned by a few .0001% oligarchs) then the FED is acumulating the outstanding debt of the USSA corporation at a pretty good clip.

What happens when a corporation declares bankruptcy? The bondholders are entitled to the assets. Hence when the traitors in our government decide to end this ponzi and default, the FED will trade in their bonds for the assets of the USSA. With all of the HAARP (used for mineral location) and satelite imagery that is shared amongst corporations via the NSA the ultimate owners of the FED will know the best chunks of land within the USSA to trade their bonds for.

The ultimate ponzi: Electronically "print" fiat with no effort or backing, trade said fiat for the debt of a nation with vast mineral and energy wealth (plus toxic MBS tradable for homes), push the government of said asset rich country to default (once you are the dominant bond holder) and then acquire most of the assets of said country. Brilliant... except for the armed millions that will fight back LOL.

Tue, 05/06/2014 - 15:27 | 4733038 AsIseeIt
AsIseeIt's picture

"But at the end of the day, bodies and people willing to die in order to "take out the trash" trump any theoretical collection of "wealth".  History has shown that time and again."

 

"Therein lies the rub"............................................the purge list no doubt is being prepared and those responsible WILL be held accountable.

Tue, 05/06/2014 - 15:24 | 4733022 LawsofPhysics
LawsofPhysics's picture

You have far, far too much faith in the actual agents of the Fed in carrying out such an elaborate plan.  All stimulus is fungible and all technology can be hacked or repurposed... And yes, much like what the Kings of old London use to say "The problem Scotland is that it is full of Scots..."

Tue, 05/06/2014 - 13:05 | 4732383 10mm
10mm's picture

Keep #6. Send the 200 bucks.

Tue, 05/06/2014 - 13:46 | 4732555 Emergency Ward
Emergency Ward's picture

A trip to NYC for a stop and cavity-search by the NYPD while walking to the restaurant.  And confiscation of the $200 bucks....

Tue, 05/06/2014 - 12:54 | 4732326 larz
larz's picture

jeenyusses   the solution IMHO is becoming localised and self sufficient so these facts are mere amusements and not body punches

Tue, 05/06/2014 - 14:02 | 4732635 zaphod
zaphod's picture

What this shows is the value of real wealth/savings that the FED is destroying with QE. 

Sure the economy gets a temporary boost, but this is the value that has already been destroyed, the effect will be felt in real terms. Germany faced this, so will we. 

Tue, 05/06/2014 - 14:20 | 4732735 0b1knob
0b1knob's picture

8.) Destroyed the middle class of America, enriched the 1%, make the TBTF banks even bigger, and set up an inevitable hyperinflation that will destroy the dollar and the economy.

Oh wait...

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