Romney in Boca Raton meets Quantitative Easing
OK just to bring it all together, in Boca Raton Mitt Romney demonstrated that he didn’t know the very latest news about quantitative easing.
Kevin Drum reads the transcript so we don’t have to
On May 17 2012
Romney: Yeah, it’s interesting… the former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we’re issuing—which they’ve been doing, the Fed’s buying like three-quarters of the debt that America issues. He said, once that’s over, he said we’re going to have a failed Treasury auction, interest rates are going to have to go up.
He is discussing QEII and how interest rates will shoot up when it ends. It ended in July 2011.
Mitt Romney does not keep up with the latest news what monetary policy has been for the preceding 10 months.
But he will bring us recovery not dependency. Of course. He undependable.
Two connections of this video I’ve yet to see drawn (although to find Romney as a typical MBA b-s artist who name drops factoids based on old and outdated data while simultaneously having no clue or apparent interest about modern economics is a true gen):
1) What a convenient worldview Romney has that the people he has fired as a turn-around artist are responsible for their own pink slip and lost pension because they don’t take responsibility and take care for their own lives.
2) This speech reinforces and reiterates every Romney “gaffe” to date that Romney has stressed was not a true statement of his beliefs: “I like to fire people” “corporations are people, my friend” and especially “I’m not concerned about the poor.”
GOOD catch, Robert! That point is huge. I’m surprised that Kevin Drum didn’t point that out. I hope your point is picked up by Krugman and others: How the hell would this guy not know that QEII had ended 10 months earlier—and that what’s-his-name’s prediction had not come true? I hope he’s asked that question at the debate on Oct. 3.
Romney’s dangerously stupid and easily manipulated. Geeeez.
well,
don’t expect the people to understand any of this unless you explain it to them very carefully
which would be a good idea.
The Angry Bear author confuses QE-II (and QE-III, QE-Lite, QE-IV) with Federal purchases of treasuries in open market operations, which may or may not be part of quantitative easing actions. A quick visit to the New York Federal Reserve site reveals that between July 2011 (after QEII ended) and September 1,2012 (before QEIII began) the Fed conducted 177 open market purchases for a total of 528 billion dollars, along with 64 sales, expanding its portfolio of U.S. treasuries.
Romney is right: the Fed has been buying debt and has not ended its active participation. The author, as well as some of the commentators, would do well by paying better attention to the Fed’s actions.
We cannot judge the predictions yet, since the Fed hasn’t ended its increased participation. When it does, who will replace it? In other words, who will come to the plate 177 times in a one year period with 518 billion dollars?
@Kevin The commenter confuses purchases with net purchases. In operation twist the Fed shifted from short term Treasuries to long term Treasuries. That does not imply a net increase in its holdings of Treasuries.
Of course it is true, as is totally normal, that the Fed reinvests the principal of maturing Treasuries in Treasuries. It always does this except when it is deliberately contracting the money supply.
I’m not certain that these implies Mitt missed the whole Quantitative Easing 3, but I do think these monetary policies on the part of the Fed bring up a lot of interesting questions. I plan on blogging about this issue soon if anyone would like to check it out at http://donnerfinancial.com