Fed Speak on 9-21-2011!

Fed Speak : Fun with the Federal Reserve Statement!

(translation to American English in bold; Fed Speak in non-bold print below)

Release Date: September 21, 2011

For immediate release

Because why should you have to wait for this stuff? You paid for it!

Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow.

No kidding?

Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated.

Really? There are folks out of work? We aren’t.

Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles as supply-chain disruptions eased.

Spend more people! Well, at least Japan is better than it was if even if you refuse to go to the mall and splurge. Nice that we’re routing for the Japanese now after bashing them for taking over the world when they bought Rockefeller Center (and later sold it for a massive loss).

Investment in nonresidential structures is still weak, and the housing sector remains depressed.

Have you heard the construction business is slow? Who lowered interest rates to levels that supported the housing crisis in the first place? Oops, we did!

However, business investment in equipment and software continues to expand.

Go Oracle. You can depend on government spending needed to analyze the weak economy. It’s so complicated we need really really big spreadsheets that only Oracle can make.

Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks.

Peaks that were produced by….oh my golly gosh….by US during QE2! Not to change the subject, but that’s a boat isn’t it?

Longer-term inflation expectations have remained stable.

Now that we have stopped messing things up.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability.

And we’ll do that by taxing savers by keeping rates at zero and destroying the US dollar, instead of increasing taxes and being honest about it. We like being tricky, not honest. Hey Lincoln said you can fool some of the people some of the time, so we figure, we have to keep coming up with new ways to do it!

The Committee continues to expect some pickup in the pace of recovery over coming quarters

because we took our medicine this morning and another feel good pill at noon…

but anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate.

And we do like to do our job no matter what it takes.

Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets.

The world is a real mess isn’t it?

The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate as the effects of past energy and other commodity price increases dissipate further.

From the elevated levels we induced through our misguided policies.

However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

Ooooo do we ever pay attention. We’ll even watch as inflation goes up.

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to extend the average maturity of its holdings of securities. The Committee intends to purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less.

This program known as operation “Twist” is yet another way we’ve found to play around with interest rates, our favorite playtime activity. You should be happy with us, because by flattening the yield curve, we’re taking away profits from banks that have been making a killing off of making loans in the short term and buying longer term government paper and collecting the difference.

Confusing huh? Normally we favor the big banks over you! Just by holding short rates so low, we’re robbing you daily of your savings interest you deserve and stuffing bank coffers with it. To stabilize the banking system of course and destabilize your bank account. But we got tired of hearing Jamie Dimon at Chase whining in public, so we are sticking it to the banks this time and moving more houses in the process by keeping mortgage rates low!

This program should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.

Oh we’ll be a watchin’ ya’ll. Hey I’m from the South ya’ll. I know I don’t sound like it.

To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.

Say what? Round and round it goes? When it will stop nobody knows?

In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.

We love to roll over. Woof! Woof!

The Committee also decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.

Surprised you with that one didn’t we? Not.

The Committee discussed the range of policy tools available to promote a stronger economic recovery in a context of price stability. It will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate.

We love our tools. We are tools. We love ourselves!

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen. Voting against the action were Richard W. Fisher, Narayana Kocherlakota, and Charles I. Plosser, who did not support additional policy accommodation at this time.

They didn’t? Three abstainers from monetary indecency? We think they are just afraid of a gold ol’ Texas hangin’ by Governor Perry. The other seven of us think he’s a genuine nutcase, but it does make us feel important to have our lives publicly threatened on TV by a sitting governor. We are now packing by the way and have mandatory pistol practice prior to our meetings to boot!

For my latest on the market: Latest On the Stock Market:Tracking the SP500 Index

…and on gold: Gold’s Next Move: GLD Gold ETF Market Timing Update

Standard Disclaimer: Remember, it’s your money and your decision as to how to
invest it.