Posted on 11/12/2013 6:32:25 AM PST by Starboard
The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.
And the impact? Even by the Fed's sunniest calculations, aggressive QE over five years has generated only a few percentage points of U.S. growth.
Having racked up hundreds of billions of dollars in opaque Fed subsidies, U.S. banks have seen their collective stock price triple since March 2009. The biggest ones have only become more of a cartel: 0.2% of them now control more than 70% of the U.S. bank assets.
As for the rest of America, good luck. Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy.
(Excerpt) Read more at zerohedge.com ...
Then it's not really misguided, is it?
Politicians and the Fed (as holy p0wned and run by the big Banksters) are deeply engaged in fraudulent crony krapitalist bankster stimulation. What's not to like?
You mean! You mean! The Democrats are for the rich!
Well, after reading “The Creature from Jekyll Island”, one realizes the sole purpose of the so-called Federal Reserve Bank (three lies in one actually, because it’s not “Federal”, there are no reserves, and it’s not a bank) is to allow banks to take unwarranted gambles and then bail them out with fiat currency when they INEVITABLY fail. It was recognition of the “inevitably” part that prompted the creation of the “bank” by the banksters in the first place.
However, in order to receive its Congressional “charter” and maintain its existence, the “bank” had to offer Congress something that Congress couldn’t get in any other way, namely, the ability to print fiat currency. The U.S. Constitution explicitly prohibits Congress from issuing fiat currency, but did give Congress the power to borrow. So Congress created a special “bank” it could borrow from, a bank which printed the fiat currency FOR Congress, exchanging this fiat currency for Federal promissory instruments of various kinds issued by Congress under its power to borrow money.
Too late, Thomas Jefferson realized how this scam would work, and said that if he could go back and change only a single thing in the Constitution, he would eliminate the power of Congress to borrow money.
As with all fiat currencies, their trajectory takes them to zero value at their end point. And that ALWAYS happens! Since the creation of “The Fed” in 1913, U.S. currency has lost 96% of its value.
I say “misguided” because an element of the Fed’s strategy was, at least initially, to attempt to lower interest rates to boost housing and employment. But QE quickly got out of hand and the Fed ignored the unintended consequences of prolonged support for the banks and allowed blatent favoritism toward Wall Street.
Initially it was a misguided policy that soon morphed into something more sinister.
BTW, I should have concluded my post with this:
It would take only a single Constitutional amendment to cure almost ALL of the evils of today’s Federal government, namely an amendment that prohibits Congress from borrowing additional money. All else would follow, namely, extremely limited government in all areas, no entitlements, no purchasing votes with taxpayer money, no bailouts of any kind, and limited crony capitalism.
The reason this would occur is that taxes would be the sole source of revenue and taxes can be raised only so high before they cause diminishing returns from a crippled economy or the taxpayers simply revolt and vote in low-tax candidates.
Rich Wall Street liberals benefited by an institution created by rich Wall Street liberals. Shocked. Shocked!
I’d like to borrow money for nothing and park it in US treasuries so as to make tons of money for nothing and go off to live at the beach.
Federal Reserve Bank (three lies in one actually, because it’s not “Federal”, there are no reserves, and it’s not a bank).
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Good comments overall.
I visited the Georgia coast a few years ago and was at the Jekyll Island Club. I saw the room in where the Fed was “hatched” and immediately had this strange urge to start spending money. :)
If you haven’t already read it, highly recommend the book “End the Fed” by Ron Paul. One prominent theme in the book is that the Fed has enabled wasteful and reckless government spending.
"The Three Musketeers": There were four, and they fought with swords, not muskets.
The YMCA (Young Mens Christian Association) is full of menopausal atheist women doing water areobics.
we haven’t had a free market in a century at least
Has there been an OW siting recently?
Confessions of a Quantitative Easer
This confession comes from the writer himself, when it is far too late.
By Andrew Huszar, also posted at the WSJ. Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve’s $1.25 trillion agency mortgage-backed security purchase program.
There are no other names mentioned in the article until the last paragraph, and they are not confessing anything, the scam is entrenched, will continue until it explodes, killing the entire economy, or what’s left of it.
Even when acknowledging QE’s shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces). The implication is that the Fed is dutifully compensating for the rest of Washington’s dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street’s new “too big to fail” policy.
The Dow has roughly doubled since the easing started 5 years ago.
I am not expert, but I doubt that the underlying value of the companies has doubled. Obviously, flooding the world with dollars keeps interest rates low, causing investors to park their money in stocks. A tapering of the easing will most certainly drive the market down, as well as increase interest rates which in turn will hurt the real estate market. Also related to this, is a doubling of gas and other commodity prices in the past 5 years, also related to a weak dollar.
The fed believes that as long as the interest rate they pay on the $85 billion per month that they are pumping, is less than the annual growth in the GDP, then they can pump forever.
I believe that this is suicidal, but don’t see any of those in control willing to do what needs to be done.
Someone is purposey destroying the US economy and the dollar. IMO this goes much higher than obama and his stooges.
Explains why Wall Street panics and the Dow tanks any time tapering is even whispered.
I don't believe that. I think QE was sinsiter from the outset. Lowering interest rates and boosting housing were the tools used to sell the isea...much like if you like your Dr you can keep your Dr!
It is a difficult thing to understand the FED and the Gov. except that it’s all to prop up WAll Street and the Government with money that isn’t there...it’s “in the air”...crossing the cyber world as if it’s real....it’s not tangible.
Rather like people who live in cyber world as if it’s real....when in fact it’s all information in one form or another. “In the air”....
Yet the reality is evidenced by the working class every day as they see prices increase and their paychecks decrease for any number of reasons.....which indicates to me whatever they’re are pulling off it’s not working for any but the elites and those they choose to reward.
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