When The Fed Has To Print Money, Just To Print Money

I’m not an economist, I don’t play one on TV, and staying at a Holiday Inn Express wouldn’t help me one iota. But these days, anytime I hear the words ‘Federal Reserve‘ and ‘print money‘ in the same sentence, I start paying reeeeaaal close attention.

I carved out as much of the economics minutiae in the article below as possible, to make it easier for everyone to follow, …including me.

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From ZeroHedge.com: 

“…we once again refer readers to the paper released yesterday by Morgan Stanley’s Greenlaw and Deutsche Bank’s Hooper, which discusses not only the parabolic chart that US debt yield will certainly follow over the next several decades, but the trickier concept known as the Fed’s technical insolvency, or that moment when the Fed’s tiny capital buffer goes negative [***which the ZeroHedge guys refer to as the “D-Rate” ]. 

In short what would happen is that the Fed will be then forced to print money, just so it can continue to print money.“

Hey, THAT doesn’t sound very good! And this sounds worse:

Math made easy: (Obama + Fiscal Cliff = we ALL lose)

This just in: 42% of Americans are idiots.

Whoa, that’s just a tad harsh, you say? Give me a couple minutes and I’ll explain what I mean.

Lost among the election results and the sex-scandal aspect of Benghazi is a very real disaster: the Fiscal Cliff is coming. If you aren’t up to speed on that term, let me explain quickly. “Fiscal Cliff” refers to a 1-2 combination of HUGE tax increases and deep spending cuts:

1. The tax increases would roll back our current tax rates (aka: the “Bush Tax cuts”) which have been around for a decade, having been passed in 2001 & 2003.
2. The spending cuts will gut the defense budget, and are the result of the budget sequestration deal negotiated in 2011.