Federal Reserve is Just as Paralyzed as Congress
Submitted by Michael Nystrom on Wed, 08/10/2011 - 07:46in
WASHINGTON (MarketWatch) — The U.S. economy is slumping, and the word Tuesday from the Federal Reserve is that the central bank is just as paralyzed as Congress is.
The most remarkable thing about the policy statement from the Fed was the wide gulf between the Fed’s diagnosis of what’s ailing the economy and the Fed’s prescribed medicine.
The economy is in much worse shape than we thought, the Fed said. And we won’t — or can’t — lift a finger to do anything about it.
Continue at: MarketWatch
"And the economy — and the
"And the economy — and the market — must fend for itself." But the Fed *will* continue to print money to dole out to their banker buddies. Might not help the economy... but the pols know who butters their bread. It sure ain't We the People.
my general economic advice to Congress and the Fed
don't just DO something - STAND THERE !
Hi Michael Nystrom
Your post got me to thinking.. What does the UN Agenda 21 have to say? Chapter 33 http://www.un.org/esa/dsd/agenda21/res_agenda21_33.shtml
WE ARE GOING TO WIN!
Funny
They have been doing nothing but underminding the Market and somehow this is fallout is going to be painted as the markets fault...
This monetary system is so, so corrupt.
The purpose is to transfer wealth from the public to banks as we pay interest on the money they created out of thin air and loaned to us. In 1932 the M2 money supply was $50 billion and today it is $9,127 billion. That is a lot of money they created so that they could collect a whopping amount of interest from individuals, businesses and governments.
Of course in addition to being unconstitutional and predatory, this monetary system is unstable and unsustainable. It must fail because eventually the amount of debt owed to the banks becomes so overwhelming to the public that it cannot be fully repaid, and this creates insolvency for the banks, i.e. their liabilities to us exceed the value of what we owe them. Today it is just an illusion that they are solvent, supported only by regulators looking the other way and accountants deliberately committing fraud by certifying fantasy values on the financial statements of the banks.
We are at the point where the system is crumbling. The fact that our money is no longer gold and silver coins as required by the Constitution, but just bank debts owed to us (Federal Reserve Notes, checking accounts, savings accounts and CD's) means that as the system collapses, there is a huge danger that we will be left without money to lubricate economic activity. Already, people and businesses holding on to their money, and refusing or being unable to borrow more from the banks, has had a devastating effect on economic activity, so imagine what will transpire when the bank debts we call money become worthless.
As much as the Federal Reserve Bank has increased reserves at commercial banks (quantitative easing) to facilitate commercial banks being able to create new checking accounts to loan out, they have been ineffective. The federal government is borrowing newly created money, but the public and businesses are not in adequate amounts. Remember that when people and businesses repay what they owe to banks, that destroys money as the checking account balance (part of the money supply) disappears from the banks books along with the loan balance. This required principal repayment along with interest, is the deflationary drag built into the system which eventually brings it down.
There are two ways to destroy the value of money. One is to have the money supply be bank debt which destroys checking and saving account balances when the banks fail (deflation). The other is to create so much money that it dilutes its value down to zero (inflation if it happens gradually or hyper-inflation if it happens rapidly). In either case the public pays the price for politicians and bankers having colluded to bring us this corrupt, designed to fail system.
The details of the collapse are still to reveal themselves, but collapse it will.
"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley
Throw it in his face
From the small number of clips I've seen of Bernanke, I've seen him speak several times about how confident he is about the powerful tools that only the Fed has that assure their special ability to predict and proactively treat financial problems, and about the powerful tools they have to fix any financial problems that miraculously bypass their proactive measures.
I hope that the next time Ron sits him down that he (Ron) reads a list of these quotes back to Bernanke and ask him (Bernanke) to explain which is right: Is the Fed unable to predict and to correct problems (thereby admitting that the Fed is completely useless, and that Bernanke's assurances have been totally wrong) or is there some special reason why it now seems that the Fed is totally inept at predicting or correcting problems.
Something that the article of this point should point out, but does not, is that the single "action" that the Fed is taking now has been proven ineffective. They have been keeping the rates near zero for years now, and the intended result has not been achieved. Instead of freeing up capital to the medium and small businesses that drive GDP, more money is used by huge banks and businesses for more unfair advantage over the medium and small businesses without government corporatist influence.
"From the small number of
"From the small number of clips I've seen of Bernanke, I've seen him speak several times about how confident he is about the powerful tools that only the Fed has that assure their special ability to predict and proactively treat financial problems...."
Bernanke is a con man. All his actions, are simply directed towards helping market participants feel "confident about the economy." I haven't heard him even attempt to give economic justifications for anything he does; instead simply referring to how these-or-those needs to feel confident, much like the ostrich probably feels confident in it's invisibility to threats with it's head in the sand.
Of course, this is exactly what your concern must be, if you are presiding over a Ponzi scheme. There, confidence is everything, and once it is gone, the game is up.
But it has little to no bearing on the actual health on a sustainable, real economy, where realistic expectations of the future is what allows for optimal resource allocation; not blind faith in some self proclaimed wizard acting confident.
With interests rates already at zero, what can Fed do this time?
This time, Bernanke WILL literally need to throw money out of helicopters?
The Fed is happy - we are deeper in debt
and they maintain their tithing scam.
If the Fed is "paralyzed",
then here's hoping that the paralysis spreads to the vitals as soon as possible.