QE3 - is dumping trillions more of debt on the American taxpayer a cause for celebration? (Congress, Obama)

[KRAMERCAT]

You might think so, by the way the market is clapping and cheering. Unfortunately, the gaping hole in the hull of the American economy is still there - namely the outsourced jobs to India and China. Obama blindly allows the Fed to keep piling on debt, while Mitt thinks the only solution is to give more to the 'haves' and deny services to the 'have nots'. Obama's plan causes America to become Greece, while Mitt's causes widespread rioting.

"The Fed has decided to go all-out in fueling the next massive asset bubbles through its QE3 bazooka. The Fed announced plans to buy $40 billion worth of mortgage securities per month on an open-ended basis, while continuing to reinvest its income from the securities purchased during QE1 and QE2.

This massive and irresponsible Fed stimulus package by Ben Bernanke & Co. will make the rich richer by fueling their asset portfolios and bringing loads of misery to the poor, who will find it harder to make ends meet.

Besides the poor, this latest move also declares war on the retirees or those who subsist on fixed income returns from bonds. With the Fed's monetary policy stuck at zero for another three years at least and more Federal money creating artificial demand for fixed income assets, yields will not rise for quite a while. This means that the coupons on newly issued government and agency bonds will be stuck at below inflation rates.

Another debilitating aspect of the latest round of QE is that by removing coupon generating bonds from the monetary system, it reduces the amount of money in the economy, thus reducing aggregate demand.

In summary, QE will reduce net savings of U.S. dollar holders and increase paper wealth in terms of higher equity market valuations."

Fed Up: Bernanke Declares War On The Poor - Seeking Alpha

[KUchief25]

We begin with this 1951 letter from then Fed Chairman Thomas McCabe to Senator O'Mahoney defending the true independence of the Fed, and in objection to its being subsumed by the Treasury-banker oligarchy superclass:

I agree with you entirely that the Soviet dictators would like to bring about our economic collapse and, as you know, inflation is perhaps the greatest force for arraying the various sectors of a capitalistic economy against each other. John Maynard Keynes stated in his 'Economic Consequences of the Peace' (1919): 'Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency...Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of Society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.'
...
Confidence of the public in Government securities as well as in other forms of liquid savings is inextricably bound up with public confidence in the value of the dollar. With the large overhand of such liquid savings, and considering among other things the heavy maturities of savings bonds coming up next year, it is extremely important that confidence in the dollar be firmly established by Government policies that destroy the inflation threat at its roots. Continuation of too easy money policies will make it next to impossible to engender confidence in the sustained real value of Government securities.

The interest cost on the public debt should be as low as is consistent with economic stability. Interest rates should be high enough, however, so that the debt will be bought and firmly held by the investing public and will not need the support of an undue amount of money creation.... We should also keep in mind that interest rates on short-term Government securities also decline in periods of recession as they did in the 30's and more recently in 1949. I am old fashioned enough to believe that history will repeat itself and that over a period of years interest rates will fluctuate with changing economic conditions.

The Federal Reserve has always tried to avoid conflict with the Treasury. The record over the years shows patience, compromise and much sacrifice of basic convictions to this end. I am still hopeful that a basis of mutual understanding and agreement can be reached. If not, we will have no defensible alternative save but to do what, in our considered judgment, is for the best interests of the country, in accordance with our statutory responsibilities. We can, of course, always go to the Congress that created us and to whom we report and appeal for a redefinition of our responsibilities.


More here..............


Some Shocking Perspectives On Inflation And Currency Destruction By None Other Than The Federal Reserve | ZeroHedge

[Toyman at Jewel Lake]

Obama must be getting desperate....billions more taxpayer $$ to throw at campaign doners.