MAY PAUSE QUANTITATIVE EASING
An obscure report that the Federal Reserve may suspend the monetization of
purchasing Treasury Bonds has the smell of disinformation. The perennial efforts to lift
economic spirits with the beginning of a New Year often are packed with wishful thinking.
Quantitative Easing is being treated as a useful tool for turning on and off the spigot of
liquidity infusion. In reality, the results of the massive origination of debt created
monies fundamental purpose is to save the commercial banks from insolvency.
The trial balloon report, Federal
Reserve could pause QE this year if US economy improves, avoids the risks that come
from another expansive round of deficit spending.
"St. Louis Fed President James Bullard, a voting member of the Fed's monetary
policy panel this year, said a drop in the unemployment rate to 7.1 per cent would
probably constitute the "substantial improvement" in the labor market that the
central bank seeks.
"If the economy performs well in 2013, the Committee will be in a position to
think about going on pause" with the asset buys.
Minutes from their December policy meeting showed that "several" top
officials expected to slow or stop the so-called quantitative easing program, dubbed QE3,
"well before" the end of the year - news that surprised some on Wall Street and
prompted a drop in stocks and bonds, and a rise in the dollar."
The recent spike of equity prices after the sharp increase in taxes on high-end incomes
just does not translate into improving the prospects of the beleaguered middle class.
Temporary uncertainty relief does not make a healthy stock market alone. When the
financiers of employment expansion must face the added costs of Obamacare and a drop in
consumer disposable income, it simply does not follow that unemployment levels will drop
in the near future.
Yet, segments of the Federal Reserve offers optimism, as the labor market may show
"substantial improvement" in the coming months. Could this forecast imply some
newfangled governmental make work new spending programs?
financial media is pushing the success of the QEs rescues. One example is the TV
commercial where AIG
advertises the end of its bailout.
"AIG has just
launched a two-week, multimedia campaign seeking to reintroduce itself after its role in
sparking the Great Recession," MediaPost reported yesterday.
"The company got an $85 billion bailout
as the government took about an 80% stake."
The ballyhoo over paying back the loans steers clear of the real reason why AIG was
"Too Important" to fail; namely, to salvage the incalculable derivative
obligations. Rescuing the money center banks has always been the intent of the "Too
Big to Fail" taxpayer salvage schemes.
But when will the limit of such gifts be reached? When the banks are
satisfied or when the Treasury is emptied and looted, as the cost of extending the usury
based financial system. Future generations do not have a chance for economic prosperity as
long as the Federal Reserve continues the bond-buying thievery.
In order to
confuse the public even more, The Big
Banks Expect Quantitative Easing Into Early 2014.
"The New York Feds primary dealers, the 21 banks with which it carries out
transactions, expect quantitative easing to continue until 1Q 2014. This is according to a
Dow Jones Business News report.
The recently released minutes of the December
FOMC meeting revealed that several Fed governors were taking a more hawkish stance in
regards to the bond-buying program."
Remember that the Fed is forecasting a slow modest recovery. What will the change in
attitude become with a serious double-dip recession?
Do not believe for a New York minute that the Fed is looking to transition out of their
gravy train financial backdrop for their bankster holders of the privately owned
The practical gauge of how long Quantitative Easing remains will be decided by the
amount of debt that needs to be refinanced. Rolling over current debt is easy enough of a
concept to understand. Should it not be just as comprehensible to recognize that continued
increases in the national debt requires even greater appetites to buy government bonds?
this normal mechanism of finance, the perverse imagination of the paper printers knows no
bounds. The Trillion-Dollar
Platinum Coins provides the latest absurdity.
a legal loophole allowing the Treasury to mint platinum coins in any denomination the
secretary chooses . . . Yes, it was intended to allow commemorative collectors
itemsbut thats not what the letter of the law says. And by minting a $1
trillion coin, then depositing it at the Fed, the Treasury could acquire enough cash to
sidestep the debt ceilingwhile doing no economic harm at all."
Greg Walden (R-Ore.) has
introduced a bill to specifically ban President Barack Obama from minting the coins.
The obvious conclusion when the market refuses to support low interest T Bonds is that
something has to give. Either interest rates need to rise significantly or the Fed must
continue their Quantitative Easing.
As long as the Obama administration maintains, We
Do Not Have a Spending Problem, and stonewalls significant and meaningful reductions
in the federal expenditures, the national debt will continue to be a drain on the
financial bond markets.
Mr. Bullards optimistic projection of lower unemployment might simply be a signal
that the methods for compiling the statistics may be in the works. The main street economy
sees no benefit from a banking system that shuns loaning money to productive businesses.
Quantitative Easing in any form or machination is a euphemism for crony corporate
welfare. The big money center banks are virtually financially immune from lawful
accountability or criminal prosecution.
Slapping fines and penalties for violating statues and regulations, results in escaping
trial by juries. This basic exclusive protection for the elites that run the counterfeit
presses is the proof of true power. Inexhaustible Quantitative Easing is just another
means to keep the spending financed with other peoples money.
SARTRE is the pen name of a reformed, former political
operative. This pundit's formal instruction in History, Philosophy and Political Science
served as training for activism, on the staff of several politicians and in many
campaigns. He is a past columnist for Ether Zone.
"Published originally at EtherZone.com :
republication allowed with this notice and hyperlink intact."
SARTRE can be reached at: BATR@batr.org
We invite you to visit
his website at:BREAKING ALL
the January 13, 2013 issue of Ether
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