Firing Up the Money Printing Presses

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While Americans were largely focused on the debacle that the Obama administration’s Middle East foreign policy has become, Federal Reserve Chairman Ben Bernanke was quietly reinforcing the Obama administration’s Keynesian-inspired economic policy that is every bit as dangerous. Last Thursday, the Fed announced it will pursue its third round of Quantitative Easing (QE3), and begin buying $40 billion of mortgage-backed securities every month–ad infinitum. Simultaneously, the Federal Open Market Committee (FOMC) announced it would keep its federal funds interest rate near zero though at least mid-2015. Both moves are ostensibly aimed at improving an economy dangerously close to a double-dip recession, yet the political implications are far more transparent: the Fed is playing its part in attempting to get Barack Obama re-elected.

Both moves are indicative of one over-riding reality: the economy remains a shambles. And it remains that way despite earlier massive infusions of cash into the system, in the form of two previous QE packages (QE1 and QE2) totaling $2 trillion, the $700 billion TARP program, and the $865 billion stimulus package enacted in 2009. It remains that way despite near-zero interest rates, that haven’t induced anyone to borrow money. That the Fed would re-visit such ideas, despite their previous failures is also indicative of another over-riding reality: the Fed is in an ideological strait-jacket of its own making, and even if that ideology keeps the nation on a path towards economic disaster, it will be pursued with dogged determination.

It is an ideology centered around the idea that stimulating the demand side of economy, by injecting massive amounts of cash into the system — dollars the Fed creates out of thin air — will result in lower interest rates and encourage Americans to start buying houses again, spur banks to lend money to businesses, and spur businesses themselves to borrow money for expansion leading to more jobs. In turn, such activity would then pull the economy out of it current malaise.

Yet Americans aren’t borrowing money, or buying houses, banks aren’t lending, and businesses aren’t expanding or hiring new employees. The reasons for that are simple: this administration has produced a level of fear and uncertainty that doesn’t allow for anything resembling responsible planning for the future. In short, the Obama administration remains a runaway freight train generating trillions of dollars of deficit spending in the public sector, even as it maintains contempt for the wealth-producers in the private sector who are critical to getting the nation back on its economic feet.

Politically speaking however, QE3 does stimulate a stock market addicted to such easy money policies. The stock market component is critical. It is the one bright spot on an otherwise dismal economic landscape, and when Bernanke announced his latest move, the Dow rose over 200 points, reaching its highest close since December 2007, the first month of the recession. Yet such brightness is illusory at best: while the value of the market goes up, the value of our currency goes down. This currency debasement is the principle reason Americans are paying far more for gas at the pump and food at the supermarket. In fact, gas prices have more than doubled since Obama became president, rising from $1.84 per gallon to $3.85 per gallon. And wholesale prices rose 1.7 percent in August as well, the most in three years.

Ironically, boosting Wall Street at the expense of Main Street is supposed to be completely anathema to the Obama administration’s oft-stated determination to help the “little guy.” Yet it is Wall Street that continues to party while ordinary Americans, especially those who have been financially responsible, are being squeezed on both sides of the fiscal equation. Rising prices are lowering Americans’ buying power, and the Fed’s zero interest rate policy is crushing peoples’ ability to get a decent rate of return on what they have already saved.

The resultant message is as subtle as a sledgehammer: either invest in the Wall Street “casino,” where economic fundamentals have become little more than quaint anachronisms, or remain on the outside looking in. In short, the Fed’s twin policies represent the epitome of catering to both the fiscally irresponsible and the “one-percenters” (a redundancy in many cases), this administration ostensibly considers the root of America’s economic problems.

Unfortunately, reality intrudes. A day after the Fed announced its new program–the most frightening aspect of which is that it is open-ended, meaning the Fed will continue buying up mortgage-backed securities indefinitely–it was revealed that industrial production in the U.S. “unexpectedly” fell in August by the most since March 2009. Another ratings firm, Egan-Jones, cut its credit rating of the federal government from AA to AA-minus, citing the debasement of the dollar that they contend increases the cost of commodities, thereby reducing business profitability and raising consumer costs, exactly as mentioned above. Weekly claims for unemployment benefits also rose “unexpectedly” last week, hitting 382,000 compared to a forecast of 370,000. “Initial claims and the four-week moving average are higher, as are revisions,” said Joe Trevisani Chief Market Strategist for Worldwide Markets. “The negative implications of the rising claims numbers over the past two months were realized in the August payroll data. Expect another poor job report in September.”

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  • Stephan

    Maybe Bernanke read "The Protocols of the Elders of Zion":

    Money exists to be circulated and any kind of stagnation of money acts ruinously on the running of the State machinery, for which it is the lubricant; a stagnation of the lubricant may stop the regular working of the mechanism.

    • flombre

      You mean Berninke is actually working against the ZOG? Interesting concept given that he is an integral part of the ZOG and so is the current Administration.
      Does the ZOG want to destroy itself? As l understand it the ZOG's main priority is to reduce the Whites numerically worldwide – and destroy the Christian churches. The ZOGs' mishandling of the first world economies may bring about its own downfall. You would imagine the ZOG has considered this possibility though the policies the ZOG is following would indicate it hasnt. Quite possibly the ZOG wants to take everything down in some kind of weird death spiral – including itself

      • Ghostwriter

        Your ZOG nonsense,flombre,tells me that you've come here from the Stormfront website. Hopefully,you'll go back there.

        • flombre

          l dont visit that site, the Zionist Occupational Governement is a fact of life. Jews and Gentiles alike suffer under its boot. You must be a ZOG area commander, Ghosty.

  • Rifleman

    "Quantative easing," is an effective way to plunder Americans' bank accounts, without ever opening the vault. The money in it is worth less, and politicians get to blow the difference, their loot, buying votes.

  • tony

    We need to create opportunities for vets that can encourage them to stay positive and that positive is to help their Nation and the world and they help themselves too if they want to start a Business in this kind of a business environment that Romney Ryan need to consider this Investor Opportunity to encourage New Economic growth and innovative efforts by small business that promotes the sector to expand and give more Middle Class Americans a Way to reach out to private sector investment in a ETF basket pool that would enable all small business and Individuals with Innovative solutions to contribute to our economic and commodities supply needs as well as environmental innovative solutions that compliment the efforts to expand supply . The world is at a cross roads where supply in the areas we see inflation tells us we need to start expanding that supply and if we wait too long free market fear will set in and we will lose the time and window of opportunity to get ahead of demand out pacing supply . This has happened over and over throughout history in the world and very tragic events happen once supply is out stripped and people are struggling desperately to find enough . Peace is only found through abundance in human needs supply and we need to realize this is where we are at this very time in history , and if Obama was focused properly on the causes in places like the Middle east , Africa and other poverty stricken areas in the world he would see this is whats driving their conflicts and struggled and up rising over their supply shortages that gives them a dirt floor quality of life and Instead of Blaming the unrest on a Video he would adjust his Foreign Policy to focus on the REAL causes of unhappy people and that’s a lack of abundant supply that they can improve their quality of life with . But His Environmental base of supporters who are controlling his Administration are telling Obama there is NO WAY the world can provide everyone the same quality of life to everyone in the world so that’s why Obama has chosen to try and take from the higher quality economies of the western nations who have led the way to improved lives and would rather appease the environmentalists with a Redistribution policy which will FAIL on Both sides of the worlds societies and destroy the economic security which is the supply sector economy .

    So Rather than follow a failing Foreign and economic policy of Obamas over the Cliff what we need is this ; If Wall Street could offer a ETF traded fund that allows the pooling of Small Businesses to be in the Basket ETF and those businesses then be able to assess what the baskets stock value generated from IPO and stock offering positions this would create the short and long term funding to promote a More Local small business effect on producing supply at the local level and this kind of supply expansion would be felt at the local level . The innovation that would be created by this because of the greater enabling of more individuals to have a greater opportunity to succeed would be phenomenal in our need to find solutions to expand the Food supply chain with . We need to do this Now because if we wait too long we will miss the window to avert a humanitarian disaster and see major conflict and oppressive reaction to societal destabilization leading to a repeat of past events such as Genocide because once the society is out of food supply to this Point it takes too long to expand the supply before the unrest reaches a state of absolution anarchy like past historical events where the supply shortage crept up on them and before they realized this oppressive conflicts and government rise of dictatorships were the end result . This report tells us we are dealing with too tight of a supply source to avert an shortage disaster into the near future as Population growth is continuing and supply is not expanding fast enough as we have for the most part expanded full production on current farmland in the world . At any given time in the world there is only a 60 day supply of grain available in the world supply chain , and it takes 120 days to grow a crop and we only get one time a year to grow it on both sides of the hemisphere so the spread is way to close to serve demand if something interrupts production… . I am telling you the Mission behind the Obama Administration follows a Path of Consolidation of Every Resource Known to Mankind all in the name of saving Earth from Overpopulation Fears within the Technocratic society , Look at those People Who President Obama surrounded himself with when he took Office , thats all you need to look at to know what Path our Nation and its Economy has been taken . This Fear needs to Be Challenged with Alternatives and make these People come out into the Open and Be truthful with the American People about what their true intentions are !!!!! .
    Here is a Audio of a Obama Adviser that explains the Health care Bill that even COBRA rejects ,
    COBRA rejects Obamacare ,

  • tony

    These guys that Advise Obama have conned Obama and are running the USA over the Cliff on Purpose with their ANTI growth ideology and this is wrong because the western nations show sustainable population growth in our own CIA Fertility Charts !!!

    See this Guy is right in there with Obama Science CZAR John Holdren and together with the other technocrats they have designed a de-Industrialization of the United States of America , These guys Planned this take a Look , , with the Transformation of Wealth Creation over the past 30 plus years of trade policies that has left us all Dependent now on foreign sources of parts supplies , and Romney Ryan need to point these National Security Risks out to the American People about why we need to Change the Tax Code to redirect Industrial Investment of Off Shore Funds held in foreign Banks Back to the USA so we can bring back a Balance of Self reliant Part production supply to the USA so we ARE NOT Dependent on foreign suppliers that NOW Don't even want to continue to Take our US Dollars for these traded goods !!! I bet that the Multi-National Corps would NOT have continued to Trade with these Foreign Suppliers if they would have Known that this would have led to a Rejection of the US Dollar and the USA and Europe becoming so Dependent on these parts supplies that this would become a National and International Security Risk , and so the Time for Debate around this economic security issue is justified and those responsible for directing this trend need to be exposed and why don't you think Romney Ryan ??? Its all about Freedom and that Freedom comes from being properly balanced in how we supply our Parts needs to sustain Life and Liberty !!!!

    If Romney Ryan can persuade the middle class to Believe in this kind of an approach to enabling them to have a shot at the free market system they would see a Nuts and Bolts solution that would encourage them to support this plan that a Romany Ryan administration could inspire . The Vertical farming that we can encourage with the help of small business contributing products and parts for the creation and operations if such facilities would localize supply more at the population centers so less cost to transport supply to the consumer could lower the overall cost of inflation on the current system of the centrally located processing and distribution supply system is set up that is now the inflation victim of Higher energy and imported maintenance parts costs that inflate the overall cost due to the transportation of our food products . If we can grow select foods in these kinds of facilities like fruits and vegetables and free up that farmland for other crops that need to be grown on farmland like grain , we can expand the overall food supply and with lowers energy use due to localizing the production of some of our food chain so transportation costs are lowered the overall effect will lower and stabilize the inflation in our cost of living . Middle Class people will Love you Romney and Ryan and this approach will make sense to them and they will be able to see it empowers them in the communities to start to rebuild the broken economies at the state level of our great Nation !!!! Plus if you include this innovative solution called Fodder Feeds , together with the Vertical Farm solution we can make this USA work for the American People again !!!

  • Jim

    Trying to push the economy with a string.
    And shifting power to Obama and the like at the same time.

    How is GMs stock doing now. Is it better off now than it was 2 years ago.

  • amused

    If you think its bad now , just wait .The next pissing contest over the debt will send this country into a depression , and it will soley be the fault if idiot partisan politics . Moody has already issued a warning of another credit rating downgrade . And just remember the saying "it's a recession when you are out of work , it's a depression when I am out of work " .
    I wanna see how many of you morons wind up on the unemployment line and signing up for OMG ! ….Food Stamps ! So get ready you lackeys , if there isn't a bi-partisan solution before 2013 , that's exactly what will happen . No matter who wins the election . So go ahead lol…" Make my Day " lol …and my CD 's go through the roof !