"The Fed's balance sheet is infinite..." says former Fed governor

[slipslidingaway]

http://www.cnbc.com/id/26762760

"...In other words, the nation is taking on more debt to prevent AIG, as well as Freddie and Fannie from collapsing.

That sounds like a bit of a problem, but former Federal Reserve governor Wayne Angell says that’s not the case.

"I am very comfortable with the Feds actions, he says on Fast Money. “The most important thing to remember is the Fed’s balance sheet is not finite. It’s infinite. It can expand.”

[MindMatter]

1. No sir. That's not what it means

It means that the Fed, and not the government (remember the Fed is a club of bankers who report to nobody) is in control of our money supply. They can create as much money as they want any time they want, and there is not a single Congressman, Senator, or President who can do anything about that.

Once one understands that, then one can quickly figure out that this "credit crisis" is a big hoax. It is the cover story for what they are really doing here, which is to stick the US taxpayer with all the bad loans these bankers have written. Not just foreclosed houses, but ALL FORMS OF DEBT. Now *THAT* does increase the nation's debt, but that has nothing to do with the Fed.

When the Fed issues credit, it simply expands the money supply and is not shown on any government books and a debt or anything else. It is a silent killer through inflation. Whenever they create money faster than there are real increases in production of tangible good, the only possible result is inflation.

So the simple answer is that the Fed's balance sheet is indeed infinite. There are no limits to how much money they can create. And the more the create, the less your savings are wrth and the less your paycheck will buy.

[slipslidingaway]

2. Thanks for making the distinction, which goes along with Bernanke

talking about a printing press.