Fed chief Ben Bernanke recently announced the Fed’s policy to buy up an additional $40 billion in mortgage-backed securities every month at least until the end of this year. He said that the policy will continue until we have recovery. Some on Wall Street are already saying that QE3 will not be enough. They want more.
Whenever the Fed prints money, money flows into Wall Street and pumps up the stocks and makes investors wealthy. No wonder they want more. They want the Fed to guarantee their investments. And since interest rates are so low because of Fed policy, investors can borrow all the money they want and make huge investments in the stock market, hoping that Bernanke will be there to bail them out if their investments don’t perform like they thought they would. How this is supposed to help the middle class with getting jobs and increasing our incomes, I have no idea. This kind of reckless policy always has disastrous effects on the middle and lower classes.
I remember during the last presidential election, “expert economists” on the news were talking about how we actually needed higher gas prices because that was better for the economy. Excuse me? Yes, what they meant was that it was good for the investors at the top who were bidding on the price of oil. Having higher gas prices would mean that their investments were doing well, and as they bid up the price of oil, their stocks would go up, and they made more money. So, sure, their tiny microcosm of an economy at the top was doing great as long as the Fed’s spigot was running, but how about the rest of us? How is this fair to those of us who don’t make livings at the expense of the middle and lower class? How is this even “redistribution of wealth?” It’s not a uniform redistribution. It’s turning into a complete transfer of wealth from the lower and middle classes to the higher class.
This isn’t fair to anyone. It’s not fair that those at the top have essentially free access to easy and cheap money and credit. By the time the money “trickles down,” prices have gone up. So, the taxpayers are literally subsidizing risky investment decisions. We’re the ones that are paying to guarantee and bail out Wall Street bankers. And they’re wanting more now.
The U.S. isn’t the only country in the world that is doing this. A blog writer on TheEconomicCollapseBlog.com notes that Japan is on its 8th round of quantitative easing, and things continue to get worse in the Japanese economy. European Central Bank President Mario Draghi announced they will be inflating the money supply as well in order to “preserve the Euro.” He said, “Within our mandate, the European Central Bank is ready to do whatever it takes to preserve the euro, and believe me, it will be enough.”
While the world’s central banks continue to strangle the global economy, Obama blames the failing economy on Bush’s tax cuts. How is Obama even qualified to say anything about the economy when he doesn’t even know what the national debt is? A recent Gallup poll showed that democrats were more likely than republicans to be uninterested in (and by deduction, ignorant of) political issues. Maybe he’s one of those democrats.