Posted on 06/07/2011 8:12:54 AM PDT by Robert Drobot
America clocked up a record last week. The latest drop in house prices meant that the cost of real estate has fallen by 33% since the peak – even bigger than the 31% slide seen when John Steinbeck was writing The Grapes of Wrath.
Unemployment has not returned to Great Depression levels but at 9.1% of the workforce it is still at levels that will have nerves jangling in the White House. The last president to be re-elected with unemployment above 7.2% was Franklin Delano Roosevelt....
Policy, as ever, is geared towards growth because the great existential fear of the Fed, the Treasury and whoever occupies the White House is a return to the 1930s. Back then, the economic malaise could be largely attributed to deflationary economic policies that deepened the recession caused by the popping of the 1920s stock market bubble. The feeble response to today's growth medicine suggests that the US is structurally far weaker than it was in the 1930s. Tackling these weaknesses will require breaking finance's stranglehold over the economy and measures to boost ordinary families' spending power and so cut their reliance on debt. It will require an amnesty for the housing market. Above all, America must rediscover the qualities that originally made it great. That will not be easy.
The US is a country with serious problems. Getting on for one in six depend on government food stamps to ensure they have enough to eat. The budget, which was in surplus little more than a decade ago, now has a deficit of Greek-style proportions. There is policy paralysis in Washington.
(Excerpt) Read more at guardian.co.uk ...
The $61.6 trillion in federal unfunded obligations amounts to $534,000 per household. That's more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt.
Yet we are STILL giving away 100's of billions to the rest of the world that we have to borrow to give away....
bmfl
more fuel for the fire:
China wants to limit its exposure to America’s debt. China needs to maintain its trade deficits, so it does not collapse like a house of cards. In order to accomplish this, China must unload currency and excess dollars. Buying Idaho is a good way to accomplish this. But, do not worry, China is looking at buying Ohio, Michigan and Pennsylvania as well. China will not allow its currency to become stronger, so it must eliminate some of America’s IOU’s. What better way to do this than buy America?...
http://www.commentsonnationalamnesia.com/2011/06/01/project-60-china-buying-idaho/
No, China is not the equivalent of the countries which overtook their rivals because of policies designed to unleash forces which were rooted in economic freedom. Sorry.
Under its quantitative easing plan, the Fed has committed to purchasing $1.25 trillion of Agency MBS and $200 billion of Agency debt by the end of the year, along with $300 billion of Treasury Notes ( IOU's ) by autumn. In other words, it is printing $1.75 trillion dollars this year in order to finance home loans and the federal government’s stimulus.
So far they’ve purchased $622 billion of Agency MBS, though only $462 billion is reflected on the balance sheet due to the settlement issue noted above. These purchases have occurred very evenly, about $20-$30 billion per week since January. At that rate, the Fed will hit the $1.25 trillion target on schedule. With Agency debt, the Fed is half way to its $200 billion target. And with Treasury Notes, the central bank has purchased $190 million so far.
Stated differently, 'our' FED is printing worthless paper to loan to us at a percentage while buying our Treasury bonds to allow 'our' gluttonous federal government to meet present time REAL obligations like military pay and payment to the alphabet soup litany of 'entitlements' to illegal aliens, and that horde of foreign aid leaches including the World Bank, the IMF, the UN and each of our staunch friends surrounding Israel.
We are paying interest on worthless money printed by the FED to buy worthless Treasury IOU's to pretend to make good on expenditures for which there is no money to fund the federal budget. Is this right?
Let’s get this understood, the Federal Reserve is not the USA’s Federal Reserve. The Fed Reserve that prints it’s money to buy USA debt belongs to the international bankers of whom we dare speak.
Or there will be a war with China and we will destroy all of its industry... thus, creating a scarcity situation where America becomes a new manufacturing leader.
And China seems to want to get into a war... so hey... let's push it along.
What’s the beef. You can take the Fed as ‘our’ Fed and I will agree that it is ‘ours’ to live by. However, it is not ‘ours’ to control except by perhaps innocuous appointments. This is pointed out when one speaks of Fed dollars being printed and USA Treasury notes buying these Fed dollars. I don’t know what being washed or not being washed means as to understanding what is going on but I think you did quite well in laying it out.
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