What is happening in the economy is signaling enormous changes for the U.S. and the world. The scale of what the Federal Reserve is doing is unparalleled in human history. No country has ever produced so much money and so much debt in such a short amount of time. The Fed has embarked on another round of money printing (Quantitative Easing or QE2). It has been reported that it will buy $600 billion in Treasuries and another nearly $300 billion in mortgage-backed securities. In a statement nearly two weeks ago, The Fed left its plan of money printing open-ended. It said it would, “regularly review the pace of its securities purchases and the overall size of the asset-purchase program in the light of incoming information and will adjust the program as needed.”
All the fancy financial terminology and complicated skullduggery can be boiled down to a simple phrase or two. The dollar is being debauched (corrupted/debased/degraded) at the hands of the Fed, and the massive debt and future commitments we owe will never be paid off in “real” money. Boston University Economist Laurence Kotlikoff says the real amount America is on the hook for is $202 trillion. For perspective, just one trillion dollars is a stack of $100 bills nearly 68 miles high!
The Fed is trying another round of QE, even though the first installment of $1.7 trillion did not work to actually repair the economy. We spent another $2 trillion in TARP and other stimulus that was, also, supposed to fix the economy. It’s a grand total of $3.7 trillion just in the last two years. (Some say it’s more than $12 trillion spent or committed.) All this money printing did inflate stock prices. It also helped out the big banks. It worked so well they are paying a record $144 billion in bonuses this year. What did the man on the street get?–foreclosure fraud and higher unemployment (22.5% according to Shadowstamts.co). Now, the money is running out, and the Fed is back to printing to keep the economy from falling off a cliff–again. Nothing has been fixed; the day of reckoning has just been postponed, but this cannot go on forever. At some point, the U.S. dollar will take a severe plunge, and inflation will hit America with a vengeance.
More: [usa watchdog] http://usawatchdog.com/money-printing-quantitative-easing-qe2-insanity-or-ingenious/
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
-Woodrow Wilson, on the Federal Reserve
Yes, you would need to travel a few hours by car to get to an Amtrack station in Ohio. I would like to take the train out to Portland Oregon then go to Vancouver and travel back east via Canadian Rail. Please excuse this off topic post. If you have an issue with my sentence structure, punctuation, and/or grammar that is your problem.
There is another part of what the Fed is doing that is not discussed very much. What the Fed is doing has been called stimulus or QE2 or Quantitative Easing. By the terminology it sounds like the Fed is trying to "juice up" the economy and reduce unemployment. However, the real reason they are buying treasuries has a much more sinister under current.
The Fed is terrified that the bond market will crash. If the bond market crashes, bond prices will plunge, interest rates will skyrocket, the dollar will plunge, and commodity prices will go up. We could face the worst economic mess ever,
namely stagflation. Last week's treasury auction was lousy, and we are starting to see Treasury yields rise now.
The Fed's solution is to go in and buy the securities to artificially create demand and keep Treasury yields(and interest rates)low.
God help us if this doesn't work. If it doesn't work, we will all look back at the last two years as an economic boom time.
Start with the beliefs that every USA resident, legal or not, is ENTITLED to a)Full Healthcare b)Good Housing c)A Good job and d)Good Retirement without worries and proceed to where we are today. With 47% of the citizens no longer paying Federal Taxes and mortgage downpayments below 3% so "everyone can get a house"..we don't have a prayer of getting the USA back on top. Better move to North Dakota which has the Bakken oilfield, a state budget surplus, and happy citizens!
I agree 100%.
The central banks win, they make money out of thin air.
The U.S. government win, their debt becomes reduced.
The large corporations win, a cheap dollar means they can sell their products to the world more easily.
The American citizen.
If this keeps up, a loaf of bread will be $500 ala Germany during the Weimar Republic.
You are not far from the truth. The current fiat money printing extravaganza can only end badly for the US economy. It's like the emperor's new cloths. The Government is in denial if their answer to paying debt is simply to print money. Past is prologue. Every nation that attempted to print their way out of debt created enormous inflation. In order to prepare for the eventual and systematic devaluation of the greenback, it is important to be ready to invest in items that are in high demand globally (typically commodities), and/or "hard" currencies, that are backed by commodities rich countries. The global pricing will reflect the diminishing value of the US dollar and drive commodities prices up.