In other words, the Federal Reserve is buying bonds from Fannie Mae and Freddie Mac because they are the only ones that will. Foreign Central Banks have begun to unload these bonds by the billions. Through the mechanism of essentially printing money, the Fed is "monetizing" the bad debt of the mortgage agencies. Policies like this will result in a dollar crisis and rampant inflation in the years to come.-Lou
New York Fed Begins Purchases of Agency Mortgage Debt
By Craig Torres
Jan. 5 (Bloomberg) -- The Federal Reserve Bank of New York started buying mortgage-backed securities today as part of a $500 billion program to support the U.S. housing market.
The New York Fed “began purchasing fixed-rate mortgage- backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae,” the Fed bank said in a statement released by e- mail. “Selected private investment managers are acting as agents of the New York Fed in these purchases.”
The central bank didn’t disclose the amount of the purchases, saying such details will be available on the New York Fed’s website beginning Thursday, Jan. 8, and will be updated each Thursday.
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