Federal Reserve Secrets and Lies - Greg Hunter - USA Watchdog - June 27, 2011 - The Federal Reserve has been a clandestine organization since its inception. It is not really part of the federal government; it is merely a subcontractor for monetary policy. The Fed is basically a cartel of both U.S. and European banks. It has pulled the levers in the economy from behind a curtain of secrecy since 1913 and has always enjoyed a certain degree of respect and admiration. All that changed when the economy melted down in 2008. The respect and admiration of the Federal Reserve is being shredded right along with its veil of secrecy. The Fed allowed everyone to think the cost of controlling the 2008 financial crash was just a measly $3.3 trillion. This giant lie was exposed after Senator Bernie Sanders of Vermont put a provision in last year’s financial reform bill that forced the Fed to come clean on $9 trillion in additional emergency loans and bailout money. The Fed funneled cash to foreign banks and companies right along with American banks and companies. It basically rewarded reckless and illegal behavior of greedy Wall Street bankers that caused the mess we are in now.
US Fed's QE2 stimulus ends with a fizzle - Activist Post - June 30, 2011 - The US Federal Reserve wound up its $600-billion "QE2" program to boost the ailing economy with easy liquidity on Thursday, having generated more controversy than jobs and growth. Without fanfare the US central bank's New York branch paid banks $4.9 billion for US Treasury bonds in the program's last step Thursday morning, as economists and bankers continued to argue its effect. Critics of the Fed's second "quantitative easing" program -- hence QE2 -- say it fueled surging food and fuel prices, pumped up asset bubbles in emerging economies like China and Brazil, and devalued the dollar. Even sympathizers say it didn't have much impact, noting that US employment remains stubbornly high at 9.1 percent and growth remains depressed.
What Accelerated Hyperinflation Looks Like - SHTFplan.com - Mac Slavo - July 1, 2011
Never having lived through a hyperinflationary currency meltdown makes it difficult to visualize how such an event may unfold. We know from historical examples like the Weimar Republic and Zimbabwe that the end result is wheel barrows full of paper currency being used to buy basic staples like bread and rice. The following chart from the late Howard Katz provides us an example of what the beginnings of a currency meltdown look like, in this case Zimbabwe’s hyperinflation, and how quickly it can devolve into completely financial chaos:
|year||rate of increase in prices|
Whatever the triggering mechanism, and however long it takes for the American public and our foreign creditors to lose confidence, the end result will be the same. We often talk about store shelves emptying if and when the dollar becomes worthless, but another likelihood in such an event would be that store shelves remain fairly well stocked simply because the people have nothing of value to acquire those goods (and eventually, that leads to riots and political collapse).
Can the Fed Stop Quantitative Easing? - Lew Rockwell.com - Paul Craig Roberts - June 29, 2011 - If the Fed stops QE, confidence in the US dollar would rise. Money would flow into US investments, both supporting the US stock market and helping to finance the large US budget deficit. Gold and silver prices would decline. Negative dollar expectations would
be squeezed out of oil and grain prices, although drought, flood, and supply factors would continue to impact grain prices and the administration's wars can impact oil prices.
If a halt to QE coincided with more European sovereign debt problems, the dollar might regain a lot of the ground that it has lost.
Looked at from this perspective, the Fed should halt its bond purchases, and people should bail out of their bullion investments and commodity speculations.
But there are other factors in play – the economy and continuing solvency worries about financial institutions. At a June 22 news conference, Federal Reserve chairman Ben Bernanke said: "Some of the headwinds that have been concerning us, like the weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues, may be stronger and more persistent than we thought."
Despite the fiscal stimulus of the large federal budget deficit and Obama's $700 billion stimulus program, the economy's growth and employment performance is not up to expectations. Indeed, as John Williams says, if inflation were fully measured, the economy's growth could be negative, and if unemployment were correctly reported, the current rate would be over 22%.
An economy this weak offers no support to US-derived corporate profits or to the outlook for financial organizations. US corporations have made large investments abroad in the production of goods and services to sell to US consumers who have neither the income nor borrowing capacity to purchase. People without jobs and those with the low paid jobs provided by domestic service, such as hospital orderlies, bartenders, and waitresses, cannot afford to buy a house even at the depressed current prices. To the extent that financial institutions' books remain filled with real estate paper, the financial crisis is not over.
Moreover, it is unlikely that the Dow Jones average can be sustained without growth in employment and GDP.
Can the Fed afford to sacrifice recovery, employment, and Obama's reelection to save the dollar and price stability? This is the unasked and unanswered question.
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