Quantitative Easing is Economic Suicide

The question being asked all across the world of business news is: Will QE2 be successful? Because this policy is literally economic suicide, the question becomes: Will the Federal Reserve be successful in the assisted economic suicide of the U.S. government? I find this an utterly appalling question -- which highlights the intellectual bankruptcy of government policymakers and the bankers who goad them onward.
Quantitative easing is nothing more than a euphemism for printing money out of thin air. Its one-and-only purpose is to destroy the currency being printed. It is pure dilution and absolutely no different than a corporation vowing to improve its fiscal performance simply by printing a lot of new shares.
We can illustrate the inherently evil nature of this monetary abomination by working through the "mechanics" of this policy. First, the explicit goal of QE2 is to increase inflation. By now, all readers should be familiar enough about "inflation" to know that it is literally nothing more than the speed with which our currencies are being destroyed.
In the case of the Federal Reserve, we understand all too well how "successful" it has been in creating inflation. Since it was invented in 1913, the Federal Reserve has been directly responsible for the U.S. dollar losing 97% of its value (i.e. inflation has raised prices by more than 20 times what they were in 1913) -- despite the official mandate of the Federal Reserve for "price stability" (i.e. protecting the dollar). Now, Ben Bernanke is vowing to "succeed" in destroying the remaining 3% of value of the world's reserve currency.
Here is how printing money accomplishes Bernanke's "goal." First of all, as with any kind of dilution, printing new dollars makes all of the "old" dollars worthless. So, right there, the Federal Reserve is already 100% guaranteed of "success. In fact, the Federal Reserve has already been "very successful" in creating inflation -- in the real world.
Visit Shadowstats.com, operated by respected U.S. economist John Williams, and you will hear that U.S. inflation has been in the range of 8.5% - 9.5% all this year. Williams performs his calculations using the exact same methodology used by the U.S. government a generation ago, before the U.S. government intentionally incorporated various statistical lies into this measurement.
Understand the enormous "rewards" which a government receives for lying, by grossly under-stating the rate of inflation. Payouts on $100's of billions of U.S. government benefits per year are indexed to the rate of "official" inflation. By grossly understating inflation (and cheating all of the recipients of those benefits), the U.S. government can get an instant, multibillion dollar windfall from that one lie, alone (every year).
Secondly, every quarterly and annual GDP report must be "deflated" by the real rate of inflation. The raw data must be stripped of all inflation, in order to accurately represent real, economic growth. By grossly understating the rate of inflation, the government falsely inflates the rate of GDP "growth" by several percentage points -- et voila we have a "U.S. economic recovery."
Immediately, we see Bernanke exposed for the charlatan that he is. He claims there is U.S. "economic growth," when all that "growth" actually represents is an illusion of doctored numbers. He claims the Federal Reserve has "failed" to create enough inflation (i.e. to destroy the U.S. dollar fast enough), when in fact the real data shows that Bernanke has been doing a wonderful job of destroying the dollar.
However, the ultimate "indictment" of "QE2" as failed policy comes from the fact that "QE1" never ended. Of all the fraudulent shams perpetrated by the U.S. government and the Federal Reserve, none of them are as obvious as the U.S. government's manipulation of the market for U.S. Treasuries.
Here are the facts. Previously, the U.S. government was able to find (real) buyers for its Treasuries, due to the need of other governments to recirculate/reinvest the money from their trade surpluses and fiscal surpluses. Thanks to the Wall Street-engineered "Crash of '08," the vast majority of those surpluses have disappeared.
At the same time, the U.S. government is cranking out much more "supply" than at any other time in the history of the United States. Thus, we are told by the U.S. government (and the Federal Reserve) that there are more "buyers" for U.S. Treasuries than at any time in history -- despite the fact those buyers have no money. But that is literally less than half of this farce.
Not only are we being told that buyers-with-no-money are purchasing more Treasuries than at any other time in history, we're also told that these buyers are joyfully paying the highest prices in history (by a large margin) for these debt instruments. However this still doesn't capture the absurdity of this scenario.
Buyers-with-no-money are (supposedly) buying far more Treasuries than at any time in history, at the highest prices (by far) -- while publicly, all of these "buyers" are expressing severe doubts about the creditworthiness of the U.S. (i.e. its ability to ever make good on this $trillions in new bond debt). Would any sane individual buy the greatest quantity of anything (at the highest prices in history), while publicly expressing severe doubts about the value/quality of that good?
Don't answer that question yet. Since "quantitative easing" must (and does) destroy the value of a currency, for every 1% the dollar loses in value, all of those $trillions in U.S. Treasuries (which are denominated in U.S. dollars) lose the same amount of their own value.
Thus, with U.S. bond-prices at their highest level in history (and at their maximum, theoretical price), it is 100% inevitable that those prices can only fall. This means that buyers-with-no-money are supposedly buying the most "supply" of Treasuries in history, at the highest prices in history - while being 100% certain of losing money on those Treasuries due to their inevitable fall in price and the loss of value of the U.S. dollar. Clearly, there are few buyers for U.S. Treasuries. Instead, "The Three Amigos" of debt (the U.S., UK and Japan) are playing the bond-market equivalent of musical chairs. The UK "buys" U.S. Treasuries, Japan buys UK debt, and the U.S. government buys Japanese bonds -- and all with the "quantitative easing" funny-money they are printing out of thin air. Then all three governments pretend their bond-auctions are "covered."
This brings us to the final element of this charade: U.S. bond market "auctions." At the same time that the U.S. government reported the "economic miracle" of buyers-with-no-money buying more of something they don't want (at the highest prices), just so they can lose money, the U.S. government removed all "transparency" from these bond-auctions. Even bond traders with decades of experience report that they have no idea of who is actually buying these bonds. This is like an amateur magician who is so clumsy in performing his magic that he needs to turn out the lights while executing his tricks so that the audience doesn't immediately spot the ineptitude of his fraud.
Why has the Federal Reserve been so adamant about fraudulently concealing its actions in the U.S. bond-market, and the quantitative easing that makes that fraud possible? First, in printing up money, but not acknowledging it, the Federal Reserve is literally counterfeiting trillions of dollars of U.S. currency.
Should that fact be discovered, not only would the U.S. dollar immediately collapse in value (even more than the Fed wants it to), but asset prices for all U.S. debt (and all U.S. banker-paper) would immediately collapse.
Since a fall in bond prices is exactly the same thing as an increase in bond interest rates, discovery of the Fed's counterfeiting would cause U.S. interest rates to skyrocket, squashing all remaining life out of the U.S. economy, and bankrupting the U.S. government (through much, much higher interest payments on its $trillions in debt) in a matter of months.
With the obvious fact that the U.S. government never stopped its quantitative easing, this brings us to the current scenario. The entire reason why the Fed is "announcing" something which it is already doing is because even doctored U.S. government statistics can't hide the fact that the U.S. economy is once again collapsing.
Obviously, quantitative easing is not, does not, and cannot "fix" any of the U.S. economy's problems, which (ironically) have all been caused by too much new debt, and new money-printing. So why is the Fed "coming out of the closet" (even just temporarily)?
Simply, with the intensifying weakness of the U.S. economy, the Federal Reserve (and the U.S. government) feel an intense need to be seen to be "doing something" (even something it was already doing) -- and neither the U.S. government nor the Fed have any other ideas.

Nicely Said...........................

"Lo que separa la civilización de la anarquía son solo siete comidas." ("Civilization and anarchy are only seven meals apart.") - Spanish proverb

The age of the dollar is drawing to a close..............

Currency competition is the only way to fix the world economy
Right from the start of the financial crisis, it was apparent that one of its biggest long-term casualties would be the mighty dollar, and with it, very possibly, American economic hegemony. The process would take time – possibly a decade or more – but the starting gun had been fired.
At next week's meeting in Seoul of the G20's leaders, there will be no last rites – this hopelessly unwieldy exercise in global government wouldn't recognise a corpse if stood before it in a coffin – but it seems clear that this tragedy is already approaching its denouement.
To understand why, you have to go back to the origins of the credit crunch, which lay in the giant trade and capital imbalances that have long ruled the world economy. Over the past 20 years, the globe has become divided in highly dangerous ways into surplus and deficit nations: those that produced a surplus of goods and savings, and those that borrowed the savings to buy the goods.
It's a strange, Alice in Wonderland world that sees one of the planet's richest economies borrowing from one of the poorest to pay for goods way beyond the reach of the people actually producing them. But that process, in effect, came to define the relationship between America and China. The resulting credit-fuelled glut in productive capacity was almost bound to end in a corrective global recession, even without the unsustainable real-estate bubble that the excess of savings also produced. And sure enough, that's exactly what happened.
When politicians see a problem, especially one on this scale, they feel obliged to regulate it. But so far, they've been unable to make headway. This is mainly because the surplus nations are jealous defenders of their essentially mercantilist economic models. Exporting to the deficit nations has served them well, and they are reluctant to change.
Ironically, one effect of the policies adopted to fight the downturn has been to reinforce the imbalances. Fiscal and monetary stimulus in the US is sucking in imports at near-record levels. The fresh dose of quantitative easing announced this week by the Federal Reserve will only turn up the heat further.
What can be done? China won't accept the currency appreciation that might, in time, reduce the imbalances, for that would undermine the competitiveness of its export industries. In any case, it probably wouldn't do the trick: surplus nations have a habit of maintaining competitiveness even in the face of an appreciating currency.
Unable to tackle the problem through currency reform, the US has turned instead to the idea of measures to limit the imbalances directly, through monitoring nations' current accounts. This has already gained some traction with the G20, which has agreed to assess the proposal ahead of the meeting in Seoul. As a way of defusing hot-headed calls in the US for the imposition of import tariffs, the idea is very much to be welcomed, as a trade war would be a disaster for all concerned. China, for one, has embraced the concept with evident relief.
Unfortunately, the limits as proposed would be highly unlikely to solve the underlying problem. Similar rules have failed hopelessly to maintain fiscal discipline in the eurozone. What chance for a global equivalent on trade? With or without sanctions, the limits would be manipulated to death. And even if they weren't, the proposed 4 per cent cap on surpluses and deficits would only marginally affect the worst offenders: for a big economy, a trade gap of 4 per cent of GDP is still a massive number, easily capable of creating unsafe flows of surplus savings.
No, globally imposed regulation, even if it could rise above lowest-common-denominator impotence, is unlikely to solve the problem, although it might possibly stop it getting significantly worse. But what would certainly fix things would be the dollar's demise as the global reserve currency of choice.
As we now know, dollar hegemony was itself a major cause of both the imbalances and the crisis, for it allowed more or less unbounded borrowing by the US from the rest of the world, at very favourable rates. As long as the US remained far and away the world's dominant economy, a global system based on the dollar still made some sense. But America has squandered this advantage on credit-fuelled spending; with the developing world expected to represent more than half of the global economy within five years, dollar hegemony no longer makes any sense.
The rest of the world is now openly questioning the merits of a global currency whose value is governed by America's perceived domestic needs, while the growth that once underpinned confidence in its ability to repay its debts has never looked more fragile.
Already, there are calls for alternatives. Unwilling to wait for one, the world's central banks are beginning to diversify their currency reserves. This, in turn, will eventually exert its own form of market discipline on the US, whose ability to soak the rest of the world by issuing ever more greenbacks will be correspondingly harmed.
These are seismic changes, of a type not seen for a generation or more. I hate to end with a cliché, but we do indeed live in interesting times.

American Bankruptcy.......All But A Done Deal

Bankruptcy of U.S. is ‘Mathematical Certainty,’ Says Former CEO of Nation's 10th Largest Bank
Thursday, November 04, 2010

John Allison, who for two decades served as chairman and CEO of BB&T, the nation's 10th largest bank, told CNSNews.com it is a “mathematical certainty” that the United States government will go bankrupt unless it dramatically changes its fiscal direction.
Allison likened what he sees as the predictable future bankruptcy of the United States to the problems at Fannie Mae and Freddie Mac, whose insolvency he also said was foreseeable to those who studied their business practices and financial situation.
“I think the first thing we have to realize is where we’re going and to face it objectively,” Allison told CNSNews.com, when asked about the trillion-dollar-plus deficits the federal government has run for three straight years, the more than $13 trillion in federal debt, and the $61.9 trillion long-term shortfall the government faces (according to the analysis of the Peter G. Peterson Foundation) if the government is to pay all the benefits it has promised through entitlement programs.
“If you run the numbers, on all those numbers that you just talked about, which I think are accurate, very accurate, in 20 or 25 years, the United States goes bankrupt,” said Allison. “It’s a mathematical certainty.
“It reminds me very much of that story I told you about Freddie Mac and Fannie Mae,” said Allison. “We were running the numbers, and Freddie Mac and Fannie Mae went bankrupt, and we got there. In 20 or 25 years, the United States goes bankrupt.
“Now, countries don’t go bankrupt the way companies do,” said Allison. “They don’t file bankruptcy. They usually hyper-inflate. They print a bunch of paper money, or they become Third World economies like Argentina--unless we change direction. So, we absolutely have to change direction. And the irony of that is it requires an interesting combination. It requires both discipline, but it also requires a focus on growing our economy. And it means a fundamental philosophical change from where we are today, from the idea of redistributing wealth to the idea of creating wealth.”
In his interview with CNSNews.com Allison said that when belonged to the Financial Services Roundtable they examined Fannie Mae and Freddie Mac and determined they were going bankrupt. Congressional leaders, however, did not heed their analysis.
“I was on a committee, a Financial Services Roundtable, for nine years trying to do something about Freddie Mac and Fannie Mae,” said Allison.
“You couldn’t help but see it coming,” he said. “You ran the numbers, particularly the last several years, and it was mathematically certain Freddie and Fannie were going bankrupt.”
“We met with Congress. We met with [House Financial Services Chairman] Barney Frank and [Senate Banking Chairman] Chris Dodd and they absolutely wouldn’t see it,” said Allison.
Allison became president of BB&T in 1987 and was elected chairman in 1989. He remained CEO through 2008. He is now distinguished professor of practice at the Wake Forest University Schools of Business. By 2009, according to rankings done by SNL Financial, BB&T had grown into the nation's 10th largest bank.

Food Stamps Are The Way Of The Land.........Great

Americans On Foodstamps Hits New Record In August, Increase By Over Half A Million To 42.4 Million, 17% Increase Year Over Year

Friday, November 5, 2010
Another highlight you may not hear in the President’s address from this morning: according to the last Department of Agriculture update, Americans on foodstamps has increased by over half a million in August, hitting a fresh all time high of 42.4 million people relying on the government for basis sustenance. At least now we know where that labor force is going. The August number is a 17% rise from the same time a year ago. That number is up 58.5% from August 2007, before the recession began.
As the WSJ reports:
By population, Washington, D.C. had the largest share of residents receiving food stamps: More than a fifth, 21.1%, of its residents collected assistance in August. Washington was followed by Mississippi, where 20.1% of residents received food stamps, and Tennessee, where 20% tapped into the government nutrition program.
Idaho posted the largest jump in recipients in the past year. The number of people receiving food stamps climbed 38.8% but their rolls are still fairly low. Just 211,883 Idaho residents collected food stamps in August.
The average benefit size per person nationwide in August was $133.90. Per household it was $287.82.
Food stamps have become a lifeline for workers who have lost their jobs, particularly among the growing share of unemployed Americans who have also exhausted their unemployment benefits. Lines at grocers at midnight on the first of the month have signaled that, in many cases, those benefits aren’t tiding families over and they run out before their next check kicks in.
Even during the summer children returned to schools to take advantage of free lunch programs where they were available. Nearly 195 million lunches were dished out in August and 58.9% of them were free. Another 8.4% were available at reduced prices. That number will surge when the fall data are released because children will be back in school. Last September, for example, more than 590 million lunches were served, nearly 64% of which were free or reduced price.
Children whose families have incomes at or below 130% of the poverty level — $28,665 for a family of four — can access free meals. Those families earning between 130% and 185% of the poverty level — $40,793 for a four-person family — are eligible for reduced-price meals that can’t cost more than 40 cents.
We also fail to see just what Fed-induced wealth effect these 42.4 million Americans will receive courtesy of the Fed’s generosity targetting Wall Street, corporate insiders, and nobody else.

No, They'd NEVER Print Money To Buy Bad Debt.....Would They?

Caught In A Lie: Bernanke Promised Congress The Federal Reserve Would Not Monetize The Debt But Now That Is Exactly What Is Happening

Nov 5, 2010
On June 3rd, 2009 Federal Reserve Chairman Ben Bernanke promised the U.S. Congress that the Federal Reserve would not monetize the debt of the U.S. government. On November 3rd, 2010 the Federal Reserve announced a massive quantitative easing plan which will involve the purchase of 600 billion dollars of U.S. Treasury securities by the middle of 2011. Creating 600 billion dollars out of thin air and using them to buy up U.S. government securities is monetizing the debt. So Federal Reserve Chairman Ben Bernanke has been caught in a lie. Will we ever be able to trust a single word that he says ever again?
Monetizing the debt is a desperate act. It is a signal that we are rapidly reaching the end of the game. Slamming interest rates all the way to the floor did not revive the U.S. economy. Hundreds of billions of dollars in extra government spending did not do the trick either. The U.S. economy is still dying and the U.S. government is now beginning to find it very difficult to locate buyers for all the debt that it is constantly issuing.
So the Fed apparently hopes that this new round of quantitative easing will be a way to finance the exploding U.S. government debt and spark an “economic recovery” at the same time.
But didn’t Bernanke promise that the Fed was not going to do this?
Didn’t he pledge to Congress that the Federal Reserve would not monetize the debt?
Yes, he did. So much for keeping his promises.
But what else can Bernanke do?
The truth is that we are reaching the end of the economic rope and the Federal Reserve has already played all of the other tricks that they have in their bag.
Buying up massive amounts of U.S. government debt and showering the U.S. economy with money is a desperate attempt to keep the shell game going for a few more rounds.
Once upon a time, the U.S. dollar was the strongest currency on the planet. The rest of the world loved to use it as a reserve currency and they were more than glad to buy up U.S. Treasuries.
But now the mood has changed dramatically. The rest of the world does not intend to keep lending us well over a trillion dollars each and every year. The market for dollar-denominated debt is not what it once was.
In fact, Peter Schiff, the CEO of Euro Pacific Capital, believes that the primary reason for this new round of quantitative easing is that the U.S. government is having an increasingly difficult time financing its debts….
At the end of the day, all this deflation talk is a red herring. The true purpose of QE 2 is to disguise the decreasing ability of the Treasury to finance its debts. As global demand for dollar-denominated debt falls, the Fed is looking for an excuse to pick up the slack. By announcing QE 2, it can monetize government debt without the markets perceiving a funding problem.
But the markets are not populated by a bunch of idiots. They are going to see what is going on. The Federal Reserve is monetizing the debt. This is going to make U.S. government debt even less attractive to foreign investors as I wrote about yesterday….
As foreigners begin to balk at all of this nonsense, the U.S. government will either have to start paying higher interest rates on government debt in order to attract enough investors, or the Federal Reserve will just have to drop all pretense and permanently start buying up most of the debt. Either way, once faith has been lost in U.S. Treasuries the financial world will never, ever be the same.
If there comes a point when China and Japan realize that the game is up, they are going to start bailing out of U.S. Treasuries faster than you can say “panic”. That could create a crisis of unprecedented proportions. Of course the Federal Reserve could just keep whipping up increasingly large batches of dollars out of thin air to soak up all the excess debt flooding the market, but that kind of a Ponzi scheme would not work for long, and it would likely set off horrific inflation.
In order for the current world financial system to maintain stability, there must be faith in the U.S. dollar and in U.S. Treasuries. Once faith in those two pillars is gone, it is inevitable that the whole system will come crashing down.
Most Americans have no idea that the entire global financial system is hanging by a thread. They have no idea that their futures could be radically altered if things go badly.
We like to think that we live in such a “democratic” society, but the decisions on which our economic future rest are in the hands of a group of unelected, unaccountable central bankers.
The truth is that the Federal Reserve is about as “federal” as Federal Express is. The Fed is not part of the U.S. government. If you watch interviews with top Federal Reserve officials, they love to talk about how “independent” they are. In defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve objected by declaring that it was “not an agency” of the U.S. government and therefore it was not subject to the Freedom of Information Act.
The institution that has the most power by far over the U.S. economy does not answer to the American people, and the American people are so “comfortably numb” that they don’t even realize it.
In fact, most Americans do not even know that the Federal Reserve, in association with their buddies on Wall Street, caused the first Great Depression.
But Ben Bernanke does.
At a November 8th, 2002 conference to honor Milton Friedman’s 90th birthday, Bernanke actually confessed that Milton Friedman and Anna J. Schwartz were right when they wrote that the Federal Reserve caused the Great Depression….
Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.
So does that make you feel better?
Ben Bernanke says that the folks over at the Federal Reserve are very sorry that they caused the Great Depression of the 1930s and they promise not to do it again.
Of course we have already seen how much Ben Bernanke’s promises are worth.
With people like Bernanke in charge, there is not a lot of reason for optimism.
Meanwhile, Bernanke and his fellow central bankers are heading down to Jekyll Island this weekend for a grand celebration.
That’s right.
The Federal Reserve is holding a conference this weekend entitled “A Return to Jekyll Island: The Origins, History, and Future of the Federal Reserve” to celebrate the 100 year anniversary of the infamous 1910 Jekyll Island meeting that spawned the draft legislation that would ultimately create the U.S. Federal Reserve.
They will surely be congratulating themselves on doing such a fine job of running the U.S. economy.
Yeah, they are doing a fine job of running it – right off a cliff and into oblivion.

Ugh.............One Piece of Good News And the MSM is Singing "Happy Days Are Here Again.."

One Piece Of Moderately Good Economic News And 14 Pieces Of Bad Economic News That Are So Horrifying You Might Not Want To Read Them Standing Up
Nov 6, 2010
Today the financial world was buzzing with excitement because there was one moderately good piece of news for the U.S. economy. U.S. employers added 151,000 jobs during the month of October and the unemployment rate remained unchanged at 9.6%. This is certainly welcome news, but these days it seems as though there are at least ten pieces of bad economic news for every hopeful economic signal. So don’t get fooled when the U.S. economy takes one step forward, because it is about to take another dozen or so steps backwards. We are living in the middle of a nightmarish long-term economic decline that has been building for generations. The deindustrialization of the United States, the horrific trade deficit caused by globalization and the skyrocketing national debt are problems that have taken decades to develop. The Federal Reserve has been ripping the guts out of our financial system since 1913. These are not things that are going to be fixed overnight. In fact, there are some statistics that just keep getting worse and worse and worse as time goes by. We are heading straight for a devastating economic collapse and hopefully we can all warn as many people as possible while there is still time.
The more research that you do into our economic situation the more depressing it becomes. We are in big, big, big trouble. The following are 14 pieces of bad economic news that are so horrifying you might not want to read them standing up….
#1 More than 42 million Americans were on food stamps during the month of August. That is a new all-time record, and that number is 17 percent higher than it was one year earlier. In fact, the number of Americans on food stamps is up more than 58 percent since August 2007.
#2 The number of “persons not in the labor force” in the United States has set another new all-time record. The United States has not had such an extended bout of mass unemployment since the Great Depression. The “official” unemployment rate in the United States has been at nine and a half percent or above for 14 consecutive months.
#3 More than 1000 people now live in the 200 miles of flood tunnels that exist under the city of Las Vegas. Once one of the most prosperous cities in the United States, Las Vegas is now little more than a shiny, glittering corpse that it rapidly decaying.
#4 Poverty is absolutely exploding and it is hitting those who are the most vulnerable the hardest. According to one recent study, approximately 21 percent of all children in the United States are living below the poverty line in 2010.
#5 In the past 60 days alone, the price of cotton is up 54%, the price of corn is up 29%, the price of soybeans is up 22%, the price of orange juice is up 17%, and the price of sugar is up 51%.
#6 One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.
#7 The American Bankruptcy Institute says that there will be about 1.6 million consumer bankruptcies in 2010. That would represent a huge increase over 2009.
#8 According to one recent survey, 28% of all U.S. households have at least one member that is looking for a full-time job.
#9 The individual U.S. states are mostly flat broke. For example, it is being reported that the 15 largest U.S. states spent on average over 220% of their tax receipts over the past decade. Clearly this is not even close to sustainable.
#10 The U.S. government is completely and totally broke. After analyzing Congressional Budget Office data, Boston University economics professor Laurence J. Kotlikoff concluded that the U.S. government is facing a “fiscal gap” of $202 trillion dollars.
#11 In an attempt to keep our financial system solvent, the U.S. Federal Reserve has announced plans to create $600 billion out of thin air and pump it into the U.S. economy. The Fed is calling this “quantitative easing“, but what they should really be calling it is “cheating, debasing and inflating”.
#12 Many of the major trading partners of the United States are expressing deep resentment regarding the new quantitative easing policy announced by the Fed. Ambrose Evans-Pritchard recently described the growing animosity this way….
Li Deshui from Beijing’s Economic Commission said a string of Asian states share China’s “deep bitterness” over dollar debasement, and are examining ways of teaming up to insulate themselves from the tsunami of US liquidity.
#13 For many analysts, the economic collapse of the United States comes down to cold, hard math. For example, the former CEO of the tenth largest bank in the United States says that it is a “mathematical certainty” that the U.S. government will eventually go bankrupt.
#14 According to a recent article on CNBC, the financial world is already buzzing about QE3….
“They’re already talking about QE3,” said Dave Rovelli, managing director of US equity trading for Canaccord Adams. “Eventually we’re going to be printing so much money the dollar is going to really go down and everybody’s going to try to deflate their currency against us. I just don’t know how this could end well.”
So is that all the Federal Reserve has left?
Are they just going to keep pouring bags of money into the economy until things get back to “normal”?
Are we going to have “Quantitative Easing 3″, “Quantitative Easing 4″, and “Quantitative Easing 5″?
It has been a long-running joke, but perhaps by the end of this thing Ben Bernanke will literally go up in a helicopter and start shoveling out huge piles of cash over the countryside.
The era of great prosperity that we have all enjoyed for so long is coming to an end. It would be advisable to use the remaining period of economic stability that we still have to prepare for what is ahead.
These economic problems could have been fixed decades ago if people would have actually listened and would have followed sound economic principles on an individual and on a corporate level, but that did not happen.
Now we are up to our eyeballs in debt and the greatest economic machine in history is rotting all around us.
We are in deep, deep, deep trouble and denying it is not going to make it go away.