Fed commissars issue quantitative commands

The minutes of the Dec. FOMC meeting, released today, contain new quantitative commands from their majesties. No, not specifying the size of the Soviet wheat harvest. But, as you would expect in a centrally-planned financial economy, ordering how many and what kind of securities to buy.

The Committee instructed the Desk to purchase up to $100 billion in housing-related GSE debt and up to $500 billion in agency-guaranteed MBS by the end of the second quarter of 2009.

http://www.federalreserve.gov/monetarypo...

Six of one, half dozen of the other, as it were. Or whatever. It's only paper money.

There are other comical aspects of these minutes, if you can wade through them. For one, the cast of thousands (all listed at the beginning) who attend these meetings. It must get awfully sweaty in that conference room. I hope they kept their clothes on. If anyone got groped in the dark during the PowerPoint presentation, it didn't make the minutes.

Here is another howler, which understandably remained unattributed - 'Some members saw significant risks that inflation could decline and persist for a time at uncomfortably low levels.'

Man, does that bring back memories of the goofy Greenspan era. Like that time during Bubble I when Al foresaw such big surpluses that Treasury securities would disappear ... ah ha ha ha. Or the time in 2004, when Al marveled that uninformed Americans could have saved billions by taking out ARM mortgages. That turned out to be THE WORST TIME IN HISTORY to borrow at an adjustable rate, as short-term rates proceeded to pop more than four (4) full percentage points.

I sure miss Mad Al's loony pranks on the financially illiterate. But it's good to see that there are still some deluded 'Wrong Way Charlies' on the FOMC, worrying themselves sick over 'uncomfortably low levels of inflation.' Just load up on 30-year T-bonds, boys, I'm sure you'll be fine.