Thursday, November 4, 2010

News Flash! $600B Fed Funny Money--A Big Economic Lie!

From Martin Weiss Research.

"Fed Chief Bernanke’s going to buy another $600 billion in Treasury securities to pump liquidity into the economy. But it’s all one big, fat lie.

Here’s why:

First, because the whole concept of “buying Treasuries” is a smokescreen. What Bernanke is really doing is running the money printing presses, and it’s no secret. Even the emperor himself knows he has no clothes.

Second, because Bernanke also knows — all too well — that he’s not truly pumping money INTO the U.S. economy. In reality, the U.S. economy is leaking like a sieve. So for all practical purposes, he’s pumping the money OUT OF the U.S. economy — to countries overseas.

Third and most important, the “big number” — $600 billion — is meaningless. The Fed says quite bluntly that they will …

“regularly review and adjust the program as needed to best foster maximum employment and price stability.”

In other words, they’ll blow right past the $600 billion mark whenever and however they darn please. "


"Meanwhile, yesterday’s elections have left one political party in a state of shock and the other basking in the warm glow of success. And our readers are not the least bit surprised! "


"That means Congress is now officially OUT of the stimulus and bailout business. It also means that many in Congress will be fighting to actually reduce government spending at every opportunity.

Most importantly, it means all the gas that was fueling the meager recovery of the past two years is no more. President Obama couldn’t push a new spending bill through the new House or Senate even if his life depended on it!"

This is why Obama circumvented Congress and went directly to the Fed, who can spend all the money it wants and Congress (or we) can't do a thing about it--the Fed is an appointed post, not an elected one.

"Obama & Team know that the 2012 presidential campaign effectively starts TODAY … that voters will hold the president personally responsible for turning the economy around … and that ANY FAILURE TO SLASH UNEMPLOYMENT WILL DOOM THEIR CHANCES in the next election!

But new spending bills are no longer a possibility. So that leaves the president with one and ONLY one weapon of last resort: The Federal Reserve.

That’s why today’s Fed announcement — that it will print only $600 billion to buy Treasuries and other securities — is just a down payment. Merely a small tip compared to the truly big money-printing binge yet to come."

In other words, the faces in Congress may have changed, but the intentions of the Democrats/Progressives have not. They've just found a new way to carry it out.

" the new world that has just dawned, the game has changed. Radically! Congress and the Treasury are on the sidelines. The responsibility for stimulating the economy now falls on the Fed ALONE.

That’s why you need to take today’s Fed announcement with a grain of salt. Yes, the Fed is firing up the printing presses again."


"Every dollar you earn and own is about to be gutted of its value.

Even just the dollars the Fed has printed so far are ALREADY driving the price of essential everyday items through the roof.

Just since last July, margarine prices have risen 6 percent. Women’s dresses are up 6 percent. Beer is up 6 percent. Milk prices have risen 6.5 percent. Candy is 13 percent more expensive. Butter is up 19 percent. Shoes are up a whopping 45 percent. All in just over four months!

Now, with the Fed set to flood the world with unbacked paper dollars, it’s time to get ready for even greater destruction of your buying power … an all-out assault on your standard of living … a brutal frontal attack on your financial security.

Plus, this sea change in the management of the U.S. economy will have an enormous impact on every investment market. It will impact stocks … bonds … foreign currencies … precious metals … oil and other commodities, especially food."

Take the above underlined items as hints of where to put your money if you hope to have any retirement savings left by 2013. Stocks will go down, bonds will go up (but stay away from the long-term Treasuries), and currencies, precious metals, oil, and commodities will also go up.

Even if the economy WERE to recover, prices would still go up--it would be generated by TRUE DEMAND instead of GOVERNMENT MANIPULATION. In true demand, the consumer generates the inflation through demand spending, while the government generates inflation through dollar depreciation.

UPDATE: Wall Street isn't waiting--they're already acting. From Prudent Bear:

Gold Gains as Dollar Weakens--Silver at 30-Year High

Euro At 9-Month High After Fed Move

Oil Climbs to New High After Fed Announcement

Stock Index Futures Advance--Qualcom and Whole Foods Jump


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