Posted on 11/10/2010 4:10:59 AM PST by Scanian
The most worrisome news of the month, even if you're a Democrat terrified by the prospect of a Republican resurgence, has to be the decision by the Federal Reserve Board to pump 900 billion in new dollars into the economy.
I can't write with any authority on the macroeconomic wisdom of the decision to do a second round of "quantitative easing" -- a move nautically dubbed QE2. (The first round came in March 2009.)
But whether you think it's a sound or unwise action -- and people I trust are inclined to think it's a disaster -- QE2 is a deeply disturbing sign: It suggests that we have reached the outer limit of what experts actually know about the condition of the American economy in the wake of the 2008 financial meltdown and how to repair it.
Since late 2008, America's economic leaders have used an astonishing variety of tools, policies, strategies and methods to address the crisis.
The first round QE was a monetary stimulus of unprecedented size intended to ease the credit crunch caused by the financial panic of late 2008. Then Congress and President Obama gave us their $863 billion stimulus -- the largest fiscal stimulus ever attempted, which was sold to us as a means of bringing down the nightmarishly high unemployment numbers -- as was the decision to nationalize two auto companies.
The major piece of financial-stabilization legislation, the TARP, was initially designed to remove so-called "toxic assets" from the balance sheets of American banks.
None of these measures has worked as planned.
(Excerpt) Read more at nypost.com ...
I noticed a 35% gas price hike at the corner station immediately after QE1.
This time, who knows?
It takes a larger fraud to cover all the smaller ones. QE# whatever was/is aimed to bail out corrupt banksters’ asses.
Oh, goody...”light that fire” of inflation, like under Carter in the 70’s, and see how many more tea party congressmen and women get elected. Plus a different President.
QE2 is, I suspect, the final nail. This is not going to end democratically or prosperously.
The dirty little secret is that in most recessions the problem has already gone away by the time the Fed decides to do something. It's like a having your car's engine making a funny sound so you go in your garage to get your sledge hammer and chain saw. By the time you get back the sound is mostly gone so you tap your valve cover a couple of times with the hammer to make yourself feel good and then put the tools back. This time the sound was still there so you pound on it with the hammer and start cutting things with the chain saw and wonder why it isn't fixing the problem. It is looking similar to the 1970s when the Fed was alternatively chasing inflation and recession and never really fixing anything until the early 1980s.
The coming inflation will be harmful to creditors.
The QE is paying the creditors forward. That is, they are being compensated in advance for the coming asset decrease precipitated by the devaluation/inflation
It is plain as day to me.
QE will also destroy whats left of our savers. I know they are a rare species, but, with easy money, their is no reason to have them around anymore.
It was once, a straightforward approach, you put away money and were able to have the benefit in the form of interest stipends.
You are correct. Savings in $$ will be devalued. There is the prospect of interest rates rising to possibly compensate for the devaluation.
To come out to the good, $$’s must be invested in inflatable assets.
But the coming inflation will have the government’s desired effect, don’t you see?
People will need to spend more money for the same amount of goods/services so more taxes will be generated thereby.
Anytime the Fed causes an increased cost of goods or services, they “vote” themselves a raise in income equivalent to the percentage of those price increases.
But where are those? Banks screwed themselves fashionably over SUMBS (screwed up mortgage backed securities) and any investor throwing money into those toxic dumps before that fiasco is settled will risk much. International markets relied heavily on those bonds as well.
Where does one turn now? Maybe cultured pearls? or Leggos..
QUICK! the Fed needs another bubble!
I like your Mark Twain tag...I’ve one as well.
A smart man, Twain was.
The other day a pundit tossed off the observation that US companies, afraid to invest, are sitting on $3 trillion in cash; individual investors may be sitting on 3x that amount
What the Fed has just done is confiscate 20% of the savings of anyone sitting on cash
Let’s review: TARP I and II; Stimulus I and II; QE1 and now QE2
I would suggest that all the money’s gone, and so is all the other money.
Jesus.
They knew they couldn’t what they thought of as their slave boys in Congress to muster up the courage to vote more debt, so they did it behind close doors, printed the money and devalued everyone’s savings/investments.
The Chinks and other’s got real suckered. Usually Congress goes bootlicking crawling to them to borrow money from their masters, but this time they just wrote them basically a worthless check that they have to accept. Since half or more of all dollars are outside of Congressional Occupation Zone Formally Known As Free America, thus half of the cost/rip off of devaluation is directly born by foreigners.
Maybe the foreign suckers, that thought they had a secret deal with Congress against the American serfs are now worried about partial or full repudiation.
FDR outlaw Gold
Nixon took us off the gold standard.
The thing to remember about the governmentalists is they will screw over anyone to survive.
Waterboard Bernanke. Find out who he’s really
working for, because it sure isn’t the small
investor/saver.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.