The Fed Declares War (on the poor, retirees, and the middle class)

In the attached article at Seeking Alpha Monty Agarwal correctly explains that the Fed’s all out effort to generate inflation (though the Bernanke doesn’t quite put it like that) will hurt everyday people.

Marc Faber said the same thing in an interview on Friday. The open ended QE of the Fed anounced on Thursday, coupled with the new efforts of the ECB anounced the week before that, combined with a likely future move by the Bank of China will benefit the rich (in relative terms to their more impoverished brethren,) while hammering the poor and middle class.

Old prudent middle class people who saved their entire lives used to live off of CD yields. Now? No chance Lance.

Agarwal also predicts that the actions of the Fed (and the ECB) will induce money currently on the sidelines into the game, which will move markets and prices for commodities, up.

(From Seeking Alpha)

“This new move by the Fed is unleashing massive amounts of money into the risk assets. Markets will now believe that, between the ECB and the Fed, all tail risks to the markets have gone.

In other words, this could mean that all the money that was hiding in the safety of U.S. Treasuries will now leave the Treasury markets and flow into equities and commodities.”

$5/gallon gas might indeed happen soon, along with $5/gallon milk. Who knows where bread, eggs, coffee, and other staples will go?

Will wages rise along with the cost of living? For some they might. For many they will not. Those who will see thier relative wages decline are people are likely to be the poorest in society already, and I’m not just talking about people in the United States who at least for the time being have access to food stamps.

No, I am talking about the billions more, truly impoverished people throughout much of the developing world. In some places if the price of rice goes up too much, people die.

Think about that. For the sake of keeping this system limping along until some kind of bitter end the Federal Reserve is perfectly happy with pricing some people out of the market for food.

Still, many will argue, if the Fed didn’t go bananas printing it would be much worse. We need to prime the pump until the economy comes back.

I am asking right now if there is anyone out there who honestly believes that the Fed actions will restore the economy? Anyone? Clearly there must be some folks because no one in Washington has wrestled the steering wheel away from Mr. Bernanke yet.

Click here for the article.

15 comments
Jr Browne
Jr Browne

This war is Obama based! The Fed (Global Bankers) are simply doing all they can to destroy both the dollar and Americans.

Dale Bohn
Dale Bohn

Inflation usually happens with economic growth spurts shouldn't have to worry bout that for awhile

Mark Kostelic
Mark Kostelic

Inflation hurts the middle-class. The Fed is purposely causing inflation!

Ussula Lutrova
Ussula Lutrova

@businesses that are being douches about this...stop it. stop being a douche. just stop it.

Ussula Lutrova
Ussula Lutrova

and i dont buy this bs for one minute that causing inflation to rise and the cost of goods to rise is helping us all. remember orwell. war is peace logic being used here. get rid of the fed and return to stable money.

Ussula Lutrova
Ussula Lutrova

the fed is whats causing the problem , the inflation and finacial crises. you cannot print money out of thin air and keep having skyrocketing inflation drowing out the poor until they die of starvation. you need a stable currency

Aidan Haggerty
Aidan Haggerty

Inflation is here, just look at the prices of food. Bacon is up, corn is up, and other common foods are up. The problem with our economy might be stagflation, high unemployment & high inflation; perhaps it might be hyperinflation.

Brooks Godwin
Brooks Godwin

That has been going 100 years it was illegal then as it is now . That was the intent to have unlimited funds at the expense of the taxpayer . And you thought congress ran the show . Lol

Mitchell Snyder
Mitchell Snyder

The article is exactly right, yet this is the type of idea that the liberals cheer! They seem to have no clue how to think.