Our FED Is Pissing Off The World

Posted November 5th, 2010 by Iron Mike

I’ve been asked to write about our Federal Reserve Bank’s plan to ‘stimulate’ our economy by buying Treasury Bonds with $600 Billion of ‘monopoly money’.  I’ll try to be brief because the more I write the more you’ll see that Economics is NOT my long suit.

The FED has a “Plan” – and it’s scaring the ¢rap out of people around the world. 

For a long time our national economy has been run by “Progressives” in both parties, who were having a grand time in Washington using your grandkids’ credit cards.  We financed everything from expansion of federal agencies to the bailouts to the second Gulf War and our actions in Afghanistan on credit. 

[By contrast – and at some embarrassment – GHW Bush actually made a few hundred million when we kicked Saddam out of Kuwait in 1991.]

 The net effect of catering to unions – including public sector unions and construction unions working government contracts – is that our taxes have risen, but real industries have moved everything overseas that they could.  I’m sure Al Gore will blame ‘Republican greed’, but somehow those smelly factory jobs were never replaced by ‘Green Jobs’ and open pastures filled with frolicking unicorns.  

Net effect?  Government at every level is broke.  Industries are broke, some ‘needing bailouts’, and you’re broke, and maybe one of the 10% unemployed who can’t find a job.  

Obama can’t fix it so he’s spending a wicked fortune to visit India looking for a new fan base.  Hey, it ~ could ~ work, because in parts of India they let cows shit in the streets and worship them.  

But our Federal Reserve Bank under Chairman Ben Bernanke has their own scheme – which they hope will lower interest rates so much that everybody will borrow “free” money, build new homes, and start new businesses.

Step 1.  Print $600 Billion of US Currency [about the value of counterfeit money]

Step 2.  Use that $600B at $75B a month to buy US Treasury Bonds.  Hope that will drive down bank interest rates on private [aka ‘real’] money.

Expected Result:  Banks will lower interest rates even further to compete with the bond market.

Expected Result:  Lower bank interest rates will encourage individuals and entrepreneurs to borrow capital and start building buildings and business, – thus hiring people.

Expected Result:  A wave of hiring eases unemployment figures, bolsters national confidence, and slowly we ‘spend ourselves out of this recession’.  Does any of that sound familiar?

Caveat:  The FED acknowledges this is all experimental, – they have no CLUE if it will really work.   They plan ‘to monitor it month-to-month’.  I am SO reassured!

WORLD REACTION“What the HELL are you sick crazy SOBs doing?” 

“You’ll devalue the US Dollar to the point that you start an avalanche of collapsing world currencies.  All of our over-extended and nearly bankrupt Progressive and Socialist governments could implode!” 

“Don’t you know this World Socialism only works if we have a strong USA to bail us out and keep World Peace and Order??!?”

“Friggin’ STOP IT!!”

Expected Result In Your Life:   The very BEST you can hope for is that by Election Year 2012 everything you own will be worth 20% less IF you can find a buyer with CASH!  And ~ maybe ~ unemployment is down to 8%.  Maybe.  Prices of food, medicine, fuel, and ammo going up.  Uptick in crime – muggings, B&Es, convenience and liquor store robberies, bank holdups.  More empty storefronts.  More arsons.

Worst Case:  Foreign governments collapse in rioting and armed takeovers.  Nasty riots in our bigger cities during the summers of 2011 and 2012.  Martial Law declared in some cities, – like Washington DC.  Bankruptcy and collapse of municipal and state governments.  

Your neighborhood uppity yupity MoonBat Progressive – the one who still has that Obama sticker on his Prius – suddenly finds unemployed squatters living in his beach/mountain home, and the local police refuse to evict them.  [Doctor Zhivago returns from the Western Front.]

Expected End Result:   Pelosi, Reid, Obama, Soros, Chris Matthews and Rachel Maddow still blaming everything on GW Bush!

   /s/  Iron Mike
   Old Soldier, – Still Good for Parts!

Other viewpoints:  http://www.npr.org/blogs/money/2010/11/03/131043062/federal-reserve

   http://apnews.myway.com/article/20101105/D9J9UVMG0.html

   http://www.ft.com/cms/s/0/326a6d62-e83d-11df-8995-00144feab49a.html#axzz14PZlRMVu

With full and complete apologies to my beloved Doctor Fricke who taught Econ 101 at the UAriz in the last century.  Sir, I tried to work in ‘coefficient of elasticity’, but it didn’t seem to fit.  I think they’ve stretched ALL the elasticity out of this model.

One Response to “Our FED Is Pissing Off The World”

  1. Perplexed Senior

    What do you mean, “not your long suit” you sound like Dr. Milton Friedman and you said it in English not economeese. This is known as QE2 or Quantitative Easement 2 and QE3 will be with us next year because this will be “such a success” just like all government problems. If the good Dr. Frickie is still on this side of the grass, he would be very proud, but also very scared which we should all be. By commodities, food and bullets!! Comrade Keith will not be commenting at this time.

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