If GDP keeps going down all the time, I would think the last four years of stimulus hasn’t worked. Why does the Fed need more stimulus?
The stimulus is working - in Asia.
They can make it up in volume.
Or, in other words, if banging our heads is not working, we should bang our heads even harder.
If you have not figure it out by now, the Feds need to prevent deflation at all costs, because it will make our banks who hold mortgage notes from becoming insolvent. If deflation hits, home prices along with other items will drop. Those inflated home prices backing what remains of the mortgage notes the banks hold will no longer be assets but liabilities. Since banks could not make 4 to 6 percent on US T Bills they have taken money and leveraged it in the stock market to make money. If banks implode, Wall Street and shadow banks collapse because they are all involve in intricate arrangements in derivatives, swaps and sovereign debt arrangements. All this will implode, thus the Fed Reserve with US Treasury and the entire EU/Japan central banks must keep the system floating by printing more money, thus robbing the future generation of prosperity by crushing them with huge debt notes that must be paid off or chaos by default. Banks are run by CEO’s who belong to high society. This powerful high society allow one to access power and opportunities you and I will never have. If a bank made leveraged bets to powerful banks run by other CEO’s who belong to this inner social circle, they will be paid off before the trouble bank declares bankruptcy, even if the CEO must steal allocated customer accounts. MF Global is the trial balloon. Yesterday allocated investor accounts were stolen and the Fed regulators have not arrest CEO Corzine and his execs. This sends a signal to bankers that customer savings accounts can be used in time of desperation with no consequences. When SHTF even the money in your savings account can be looted, because our financial crisis is a lot more dire then the public actually knows.
Ben Bernanke = Theodoric of York, medieval barber.
Theodoric of York: Hello, Joan, Wife of Simkin the Miller. Well, how’s my little patient doing?
Joan: Not so well, I fear. We followed all your instructions - I mixed powder of staghorn, gum of arabic with sheep’s urine, and applied it in a poultice to her face.
Theodoric of York: And did you bury her up to her neck in the marsh and leave her overnight?
Joan: Oh, yes. But she still feels as listless as ever, if not more.
Theodoric of York: Well, let’s give her another bloodletting. Broom Gilda.