The NYT reports that the Federal [sic] Reserve wants a stimulus package to pass so your food, energy, and shelter costs get so high that you have to take out loans from them at interest.
“The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability,” the Fed said Wednesday in its statement.
The Fed has already been buying mortgage-backed securities and said in its statement that it would expand its intervention as needed. The committee also served notice that it would purchase longer-term Treasury bonds, a move that would drive down long-term interest rates of all types.
There’s a reason why the Fed is buying this paper. It isn’t that no one can afford it. It’s that the people who can afford it know it isn’t worth the price that sellers are asking. If something’s worthless, let it be worth $0. Don’t force the taxpayers to pay what you want it to be worth.
And it expressed its most pointed concern so far that deflation could be a problem, saying it saw “some risk” that price inflation remained uncomfortably low.
Ummm… This is a good thing. Maybe not for banksters who want the People desperate to take out loans they can’t afford, but it’s good for the People to begin being able to afford the ‘stuff’ we need to survive — ‘stuff’ we’re stretching our wages and salaries to buy now.
To oversimplify: An economic crisis is due to people not being able to afford stuff.
The solution isn’t pumping more money into the system for prices to rise. It’s freezing money production so prices come down.
This is our dollar trend over the last ten years:
The blue is the rising trends of the dollar. The red is its decline. The massive downfall begins in 2002 when Greenspan started printing buttloads of money for banks to loan people that couldn’t afford loans.
“Industrial production, housing starts and employment have continued to decline steeply, as consumers and businesses have cut back spending,” the Fed statement said. “Furthermore, global demand appears to be slowing significantly.”
As the financial crisis became global and we hit bottom in June, other countries started doing what Greenspan did. Because the value of all currencies are based on the dollar, the production of other currencies raised their abundance — raising the dollar’s scarcity. That’s why we’re on a blue trend now. And as global banks inflate their currencies to keep up, demand from them will rise with their more abundant currencies.
In a fractional-reserve banking system, when the Congress approves $900 bn to be printed and stamped as legal tender to disperse into the economy, it’s printed by the not-federal Federal Reserve bank and grants the Fed $8-10 trillion to hand out to their Wall St. cronies. This is why that dollar trends that take so much time and patience and prudence to rise always fall really fast when money is printed.
The solution isn’t to start another red trend. It’s to ride the blue trend, no matter what nonsense Paul Krugman chooses to make attempts defy reason, logic, and facts.
Actually, Paul Krugman doesn’t even want to talk about this stuff I’m mentioning here — and there’s a good reason for it: his Neo-Progressive Gatekeeper status would diminish and less people would read his column, buy his books, or rent him to lecture the impressionable ObamaNation.
With Venezuela threatening to cut oil production “if it’s necessary” to fix prices — jacking them up 40-80% — the People can literally not afford a dollar crisis.
To understand the significance of all this, see our Federal Reserve archive.