In an earlier post we mentioned how Washington DC has thrown in with Wall Street. And why not? That’s where the money is, where it continues to flow, and through our current system of crony capitalism will continue to flow until people say “enough.”
I don’t agree with every single point made, but the attached is a very interesting essay. The core point is dead on. “Quantitative easing” is a trick. It is fundamentally about deception. And people want to be deceived especially considering the economic chickens waiting to come home to roost.
In the July 26, 2013 edition of the Bank Credit Analyst, editor Jim Grant notes that when Ben Bernanke was beginning the second round of “quantitative easing,” he described it in February 2011 Congressional testimony as equivalent to an interest rate cut. In recent Congressional testimony explaining what might be (or might not be) a forthcoming “taper” in “quantitative easing,” he suggested that it would not be equivalent to a rate hike.
What is under the stock market? Is the market reflecting an economy which is fundamentally strong?
Peter Morici at The University of Maryland revisits a sad American reality. We are addicted, completely and totally, to easy money.
I know this comes as a newsflash to most of our readers, but pouring at least $85 billion/month (probably a good deal more) into the economy isn’t a smart thing to do. Bill Gross, manager of more bonds than probably any other private individual in the world believes Bernanke’s grand experiment is holding back “recovery.”
And right now we have a very complicated situation, with some parts of the economy rapidly becoming overheated, while others languish. None of it however constitutes “recovery.”
So the Fed is going to “taper” away the quantitative easing, the printing of money, in which it is currently engaged. Bernanke (or Larry Summers—shudder) will one day allow interest rates to rise back to normal levels. Don’t worry, the economy will emerge from this radical economic experiment and all will be well. You’ll see. Ben promises.
Charles Hugh Smith asks this. The answer is simple.
All hell breaks loose.
Since the dollar continues to be the world reserve currency, and since the mega banks float like clouds over the entire planet paying little attention to borders, we shouldn’t be surprised. But that the Fed has essentially given away $1 trillion to non-American banks is pretty amazing . (Not that American banks are any better than the foreign ones of course.)
This is about right.