It is normal for the Federal Reserve to inflate the money supply just prior to presidential elections in order to make people (temporarily) feel that things are getting better and therefore help the chances of the incumbent. After all, the appointment of the chairman of the Fed and all of the policy decisions that he makes are highly political. That’s old hat in the US system. But the central bankers at the Federal Reserve have now upped the ante with their announcement of QE3 – in other words, massive money printing and intervention in the economy. They’re Keyenesians, after all; printing money is what they do. Ryan McMaken writes about this latest bad move by the Fed for LRC:
In the latest round of government “stimulus” the Fed has announced that it will be buying $40 billion in mortgage-backed securities each month for an indefinite period of time.
The logic here:
- Buy more mortgage-backed securities (MBSs).
- This will in turn increase liquidity available for lending to people to buy houses or possibly other real estate.
- All those people buying houses will then have houses to spend money on and they will spend money at Home Depot and other places, and then the economy will miraculously recover.
The effect of this will be:
- Even less saving going on than is happening now. Why do the lending institutions need more liquidity? Because there are no real life loanable funds in the first place. No one is putting money in depository institutions, for example, because interest rates are at rock-bottom levels, but also because people have no excess money to save. So, the Fed is creating fake loanable funds through the purchase of the MBSs. Much of this will probably be newly-created money.
- It will maintain the focus on consumer spending rather than investment. The idea is to keep people spending on real estate. Thus, less will be spent on business investment.
- People will incur more debt.
We’ve heard for years from some incorrigible economists that what we need is the Fed to pump up the real estate market to get people spending again. Their answer is: more debt, more spending, less savings and less investment.
This is what has been happening for years to no avail, of course, and the Fed is now just turning it up a notch. I’m sure recovery is right around the corner.
The definition of insanity/Keynesianism: Doing the same thing over and over and expecting a different result.
Materially, the smartest thing empire citizens can do is pay attention to things such as this, and “cash in” on the casino culture.
Morally, it’s best to totally ignore the “ups and downs” created by an unholy way of doing money (an unrighteousness that the christian country is roped into).
One day, maybe people will begin attacking the money system on the grounds of its morality. On the grounds of the kind of citizenry PRODUCED under such a system—- the Casino Culture, the Casino Citizen. the Gambler public. Gambling used to be a SIN.
People bred to “Profit on others LOSS” (sin) are just sinners.
And the reason things are sins, is because they come back to haunt you.
Profitting on Loss, profiting on somebody else’s loss, profiting on future loss—- is sin.
The average citizen becomes a Userer—- and doesn’t hardly even know it. They cannot enter into normal friendships and other relationships (because they covet as a way of life, because they steal from their neighbors.)
Stealing from your neighbors (as a way of life) renders a person useless for REAL friendships.
—-even when it works, the problem is WHAT THE PEOPLE BECOME internally, under such a system.
Most of too superficial, made too afraid and too hungry (these are Christ’s temptations, too), to even realize the internal depravity they can come to be under this system
You may be poorer—- but a person will still have a better life (internally) if they refuse to own any stocks, for instance.
If you play the market— then you have been reduced to the status of a gambler. Living on whim. Feeling the smart thing, the goal, is “get things cheap,” and sell high, and screw over somebody who is losing. It is mostly all profit on loss.
If you are looking to buy foreclosures… you are looking for somebody down and out, somebody vulnerable, somebody sick—- and this is how you “get yours.”
Sound money—- often bases money in more than “whatever you can get.” Eg, ties “value” to labor and materials. So that there’s more to it than just haggling like you’re in a third world market.
These are casino citizens, haggling in another third world market…. Criticizing the Goods, always, because they must TRY TO CHEAPEN THINGS, MAKE THINGS CHEAP AND UGLY… since their habit of mind is that this is how to make things cheaper (and better for them to get)
This is part of why the most Generational Americans, the wasp founding stock, is constantly degraded (and under many names, like puritan, or whatever).
It Degrades their things— so they can all be sold and got real cheap…