Thursday, March 7, 2013
The Illusion of Economic Well Being
Well, as most people know, the DOW rally is a direct result of the FED buying up bonds and mortgages and lending money at nearly ZERO interest. With that easy money policy, Banks and other institutions have been investing Federal "EASY" Money in the stock market, raising it to all time highs. Real estate is finally "ever so slowly" starting to rise in price. But, folks, it does not have "Staying Power" and that is frightening. Bernanke has proven that we can create an artificial reversal in a Depression, but so far we have not proven that we can create artificial prosperity.
Multi-billionaire and sage investor Berkshire Hathaway CEO Warren Buffett told CNBC that markets are on a "hair trigger" waiting for signs of change from the Fed.
The market is "hooked on the drug" of easy money, Dallas FED President Richard Fisher recently told Reuters. That should be enough to wake people up. Fisher's comparison of FED policies to a drug is most accurate. I liken it to alcohol and I will explain at the end of this missive.
Everybody believes that the FED should ease out of the market, but if they do, there will be no growth in the market for years while the FED off loads Three Trillion (Another Fortunate Son - Satanic - Bush legacy of Total Evil). The Republiscam Bankers knew 20 years ago that they could move the Stock Market up and Down to guarantee profits both ways, and Goldman Sachs was doing exactly that for the past two decades. When CIA Bush was president we knew that the Republiscam Bankers could actually move the Economy Up and Down to guarantee tremendous profits (for the corrupt individual bankers, but not necessarily for the banks.) Thus CIA Bush used the Savings and Loan scandal for his family and friends to get rich while the Savings and Loans crashed as an industry, and Fortunate Son Bush used the Mortgage Banking Scam and Fraud that he ran from the White House to bring tremendous profits to his family and friends. It did not bother him that he might cause a gigantic global economic collapse because the FED was always there to bail everything out. Greenspan had assured him of that way back in 2001 just before Bush started the Scam.
If the FED just starts offloading without doing it very, very gradually, Bernanke could see another Stock Market Sell off, especially while we have this tremendous decrease in Federal Spending. Combine the FED offloading, and the decrease in Government spending (When we really still need a jobs bill.) and we could get the double whammy of Depression combined with a tremendous stock market crash.
So when does the FED offload its artificial portfolio? (Remember they bought it all with Electronic Money out of the Ether, and that is where they got the 21 Trillion to lend to banks interest free to stop the Satanic Bush Legacy Global Economic collapse, and out of the ether is where they will get the other 20 Trillion that they have pledged to governments and the other central banks around the world. Technically, the FED has spent or obligated way more than the 41 Trillion that I have been harping about for years, but the amount is so much it is impossible to track it all. And to think that the vast majority of Americans out there are so damn stupid that they do not know what is happening. OMG!
All I can say to that is the FED spending may be locked in by the reality of the Satanically Evil, Fortunate Son, Dubya Bush greedily unleashed on the world. We have now spend all of this electronic money. How do we balance the books? Will we ever be able to? Most of the foreign banks that we have lent the money to cannot afford to pay it back. Not now and not in the foreseeable future. Half of Europe is in Depression and the other half is in Recession, and out liberal money donations do not seem to be stopping this collapse. Though, we do seem to have put it into slow motion.
Folks, we have never been down this road before. I warned what evil damage Bush could do before he even became president, but even I had no idea that it could get this totally out of control.
I spent 12 years in the Navy (6 enlisted and 6 as an officer). Sailors have a tendency to drink too much when in foreign ports. I think this is a response to the pain of separation from loved ones (High School Sweethearts, Wives, Children, Parents...) All I know for certain is that Sailors have an expression that describes their excessive state of inebriation while out on the town and that is, "Boy, I Am So Fugged Up!"
Boy, We Are So Fugged UP!