Posted on 07/09/2011 6:43:10 AM PDT by Kaslin
Last November, the Federal Reserve Bank announced that it was ramping up the printing presses one more time in an effort to "stimulate" the economy.
The plan was called Quantitative Easing-2, QE2 – a high-falutin name that suggested most of us commoners couldn't possibly understand it, nor should we even ask questions.
QE2 was the $600 billion sequel to the first big run that the Fed had taken at jolting the economy back to life. When added to QE1, $2.3 trillion was pumped into the economy; a completely unprecedented effort.
The flood of newly printed cash from QE2 was supposed to stem fears of deflation, keep interest rates low, and give a shot in the arm to the stocks and bonds market.
Job growth, the fed said would follow.
The QE2 spending spree ended in June much as did the first effort at "monetary easing" with nearly nothing to show for the trillions spent other that a bunch of befuddled big shots in Washington.
Even Fed Chairman Ben Bernanke admits he can't explain why nothing seems to work. Like unapologetic addicts some so-called economic experts are calling for a QE3.
The editors at the Wall Street Journal offered the following succinct summation of the Fed's quantitative easing efforts:
"They succeeded in putting deflation worries to rest. But economic growth is slower now than it was when the program was enacted, the job market has sputtered after a spurt, and the financial-market impact has been a mix of good and bad. Stock prices are higher and corporate-bond yields lower, which helped growth. But prices for oil, grains, and other commodities have surged, pinching consumers…In all, the economy looks to have grown at a 2% annual rate in the first half of the year, the slowest six-month stretch of the recovery."
Government has an obsession to "do something" whenever a problem arises.
But, as Ronald Reagan was fond of saying, when government intervenes they usually "fix it until it's broken."
Whether it's the politicians on Capitol Hill, in the White House, or the bankers at the Fed, it's time they accept that what they've been doing didn't work.
You simply can't borrow and spend yourself wealthy, and it doesn't work for nations and governments either.
This won't work either.
Try something effective, something American, as opposed to more socialism to ruin the currency of the US. Try cutting the tax on American business: to Zero% for one year; then 15% guaranteed after that. Watch unemplyment go away. Watch the overseas money return to the US.
You may be able to hold your head high again because America IS exceptional.
Other nations have done it under other names and Obama wanted to try it too. The only problem is that we are the reserve currency and now the rest of the world wants off us because of Quantitative Easing.
What is coming is severe inflation without salaries going up. Foreign goods are going to skyrocket. So all rubber products, Chromium from Africa and all other things we don't have from other nations will skyrocket in price.
This for two reasons, 1) We are going to have to pay for currency conversions where right now we don't. 2) The dollar is worth far less because of flooding it on the market.
What Obama really wants is Socialism and he is putting us into troubles in order to make it happen. Remember the phrase "Never let a good crisis go to waste". The Crisis is being created, to which Socialism is the answer the Progressives will insist.
The problem for him is he has to win the next election; he ain't like his buds Castro and Chavez that get a lifetime lease on destruction.
There is/are no tax(es) on American business. Those things called "business taxes" are just ways to use business to collect more tax revenue from individuals (in the case of businesses, their customers).
Most of the money went to foreign banks instead of our own, the truth is just now coming out:
Sorry but your link says Page not found. :(
http://www.zerohedge.com/article/mike-krieger-explains-why-qe-3-will-merely-keep-lights
Sorry, try cutting and pasting it then, they may not allow direct linking.
“Even Fed Chairman Ben Bernanke admits he can’t explain why nothing seems to work.”
The reason he can’t explain it is because we’ve maxed out our credit...something we never did in the past, so it’s not in his ‘models’.
Here’s another...
http://maseportfolio.blogspot.com/2011/06/federal-reserve-money-continues-to-go.html
And abolishing the Federal Reserve is not on HIS list of available options.
But his buddies in the Liberal Press will be rooting him on. Michele Obama said "we have help in the Press".
The Progressive/Liberal press have no choice but to build him up because they all want either communism or socialism. They give lip service to our country but their heart really isn't into it.
Get ready to hear Obama's opponent smeared as a racist and called dumb by the Lamestream Press. Oh, and get ready for them to say the opponent wants to take away Social Security from Grandma.
Just wait.
When they add cash to the system it has to go somewhere or else there is hyper inflation. This is simply the Fed continuing to hollow out the American economy.
Look for about $300 billion more after the QE2 recycling.
Truth is, all this was done in the hope it would actually work. There’s a contingent of economic theorists out there who thought that bending the yield curve lower by having the Fed purchase longer-dated maturities would goose the economy. They probably still think that way and want QE3, and QE4, if necessary.
This has, unfortunately, put the Fed in possession of a far riskier portfolio of assets than they normally hold, which could come back to bite them (and us, as taxpayers) somewhere down the road.
That, plus the fact that it didn’t work, makes Bernanke one of the sorriest Fed chairmen since Arthur Burns gave us the inflationary 70’s. And if Bernanke’s not careful in how he unwinds the trillion dollars of excess reserves he’s provided the banking system under the two QE’s, he’ll be responsible for an inflation that will make Burns look good by comparison.
OK. So what is the reason to get people into debt?
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