Dictator In Waiting

Have you had enough of Christie doing what he does best….covering his ass?  Then if you have I will give you a little info that may not have made it through the grapevine to your pc……

We all know, well most of us know, that the new head of the Fed is a woman named Yellin…..but did you know that there will also be a couple new vice chairs of the Fed (another name for dictator in waiting)?

Thanx to ABC News for the update…….

President Barack Obama intends to nominate Stanley Fischer, a former head of the Bank of Israel, to be vice chairman of the Federal Reserve, replacing Janet Yellen, who is ascending to the central bank’s chairmanship.

Fischer, a dual citizen of the United States and Israel, is considered a leading expert on monetary policy. He was a long-time professor at the Massachusetts Institute of Technology. Departing Fed Chairman Ben Bernanke was one of his students.

Not a big deal. right?  WRONG!

I do not think this person should be allowed to hold the position….why?  Simple…he holds dual citizenship and was the head of the Bank of Israel…..dual citizenship?  Pick one!  This should not be allowed.  Will he oversee policies that will effect Israel?  If so, will he be biased in their favor?

If you cannot have dual citizenship to be prez then it should be unacceptable to have it if you lead one of the most powerful entities in the world……personally, I think we ought to flush the Fed down the toilet but as long as we must have it then the people running it should be above reproach…….this guy cannot say that as long as he retains citizenship in another country…..

Thoughts?

They Are Printing Money!

Today’s subject is economics.  Hear That!  Thant sound is most people falling asleep and falling out of their chairs.

I know economics is not the most interesting thing to read about…..but before one can understand what is going on with our fiscal policy….one needs to understand economics….without understanding there is nothing but ignorance.

How many times have you heard the argument against the Fed….is that they are turning on the printing press?  How many times has the Fed been blamed for all the economic problems?

The accusation may be a metaphor but way too many seem to think that the Fed will just turn on the printing presses whenever we are in dire financial straits…..

What does it mean when they say the Federal Reserve is printing money? It doesn’t mean the Fed has a printing press that spouts out dollars. Only the Treasury Department does that. However, most of the “money,” or capital, in use today is not cash. That’s because the large financial institutions that do most investments prefer using borrowed money, or credit.

The Federal Reserve does manage the liquidity of capital, which is the amount that is available for investment. High liquidity means there is a lot of capital because interest rates are low, and capital is easily available. When credit is cheap, businesses and investors are more likely to borrow. The return on investment only has to be higher than the interest rate, so more investments look good. In this way, high liquidity spurs economic growth.

The Federal Reserve manages liquidity with monetary policy and the Fed funds rate. By lowering the Fed funds rate target, the Fed lowers all bank rates. This adds liquidity, which adds to the money supply. This has the same effect as printing money.

The Fed then “prints money” to spur borrowing, investing and economic growth.

I realize that I am nit-picking on this subject……but I like precise definitions…….. I just want people to grasp what is going on with our fiscal policy and to watch out for dog whistle slogans that explain nothing……..the Fed cannot actually print money!

Stop Screwing With The Economy!

If there is one thing that most Tea Partyers have in common….it is hate.  Not the hate of taxes (though some would argue)…..not even Obamacare……and the deficit is not on the list……the one thing that they all hate and want to make go away is…..(drum roll)……the Federal Reserve.

We all have our likes and dislikes but until such time as the Fed can be closed down or disbanded or ……well whatever….until that time we have to live with the fact that the Fed is in control of the money supply….as much as we may hate the fact….they are in control.

Every couple of weeks or months Mr. Bernanke must make the trip to Congress and do his thing….either testify or issue a report…and he recently issued such a report and what he had to say was very telling…..not that any of the clowns in the circus of Congress will heed his warnings…..but he made them the same……

(Newser) – The Federal Reserve isn’t planning to take its foot off the gas pedal anytime remotely soon, Ben Bernanke told Congress today, while rebuking legislators for not doing their own part to juice the economy. The Fed’s interest rate has been near zero since 2008, and Bernanke said he expects it to stay there for a “considerable time,” according to CNN Money. The Fed won’t ease up until unemployment drops to 6.5% or inflation passes 2.5%, and it doesn’t expect either to happen until 2015.

But he also criticized Washington’s recent economic moves, saying that the Fed didn’t “have the capacity to offset an economic headwind of this magnitude.” He cited the expiration of the payroll tax cut, other tax hikes and spending cuts (particularly defense spending), and the sequester as “a substantial drag on the economy.” Neil Irwin at the Washington Post translates the message to Congress thusly: “You’re the reason the economy isn’t taking off more.”

You may not like Bernanke but his words are accurate….Congress has done nothing to make our economy stronger….they have done nothing that would benefit the middle class……Congress wants to spend their limited time showboating at hearings that accomplish nothing but make for a spot ad in their next campaign.

Economists have been saying this same thing for 4 years….but NO one heeds the warnings or offers anything that would make our economy better…….hearings……37 votes to kill Obamacare……anything and everything except an economic solution……Repubs have spent 870 days without doing anything substantial, like offering bills, to fix the economy and create jobs…they even find bad news in the good news that the deficit will fall this year…..

You can hate the Fed but it is wasted effort…..why not hate Congress and then do something that will heal an ailing economy?  Like vote the douche bags out of office.  Or do nothing and bitch about stuff that you are too lazy to fix…..keep whining and watch the country crap out.  It is your choice.  Choose wisely.

Who Really Owns The US Debt?

it is election time and we hear from the Right about the evils of China….first, they are stealing American jobs…that is an oversimplification….the jobs are given away…not stolen….second, those Chinese devils own massive amounts of American debt….so in essence they are our creditors…….let us look at the debt thing before you go out and start believing the Mitt tale on China….

The recently released Federal Reserve Flow of Funds report for all of 2011 reveals that Federal Reserve purchases of Treasury debt mask reduced demand for U.S. sovereign obligations. Last year the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis. This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.

It is true that the U.S. government has never been more dependent on financial markets to pay its bills. The net issuance of Treasury securities is now a whopping 8.6% of gross domestic product (GDP) on average per annum—more than double its pre-crisis historical peak. The net issuance of Treasury securities to cover budget deficits has typically been a mere 0.6% to 3.9% of GDP on average for each decade dating back to the 1950s.

But in recent years foreigners and the U.S. private sector have grown less willing to fund the U.S. government. As the nearby chart shows, foreign purchases of U.S. Treasury debt plunged to 1.9% of GDP in 2011 from nearly 6% of GDP in 2009. Similarly, the U.S. private sector—namely banks, mutual funds, corporations and individuals—have reduced their purchases of U.S. government debt to a scant 0.9% of GDP in 2011 from a peak of more than 6% in 2009.

The Fed is in effect subsidizing U.S. government spending and borrowing via expansion of its balance sheet and massive purchases of Treasury bonds. This keeps Treasury interest rates abnormally low, camouflaging the true size of the budget deficit. Similarly, the Fed is providing preferential credit to the U.S. government and covering a rapidly widening gap between Treasury’s need to borrow and a more limited willingness among market participants to supply Treasury with credit.

Read More…

Looks like all the chest thumping in the GOP ranks, at least at this election time, may be just another blowjob handed to the voter……please spend a little time checking the issues that will decide this election…please become an informed voter……..please help save this country from itself!

Whatever Do You Mean?

The Fed has been doing little things to try and keep the economy from bottoming out….like keeping interests rate near zero…thus making money more available to the innovators….but so far few have taken the bait…..but once a month there is all kinds of stories about what the Fed chair, Bernanke, is going to do to help the economy….

But there has been a turn of events…..it seems that some in Congress have taken it upon themselves to write a letter to Bernanke……

“[W]e submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people,” the Republicans write.Sens. Mitch McConnell (R-KY) and Jon Kyl (R-AZ), and House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA), ostentatiously cautioned Bernanke against providing the economy any further monetary stimulus.

Can Repubs be any more transparent?

Cool letter….but……According to the Board of Governors, the Federal Reserve is independent within government in that “its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government.”

However the Fed is subject to congressional oversight but not interference.

But the letter seems to warn the Fed from doing anything that may help the economy…now is it a desire to try and use it as a political tool?  Or are they truly worried about something?  Personally. I think it is a pathetic attempt to keep the economy in the toilet for as long as possible.

Was Perry Right?

Recently Gov. Perry of Texas and presidential candidate accused Bernanke of treason or that his actions were treasonous…..many pundits condemn his statement as amateur swagger….that it was a rookie mistake on the first couple of days on the campaign trail…and as much as it pains me…..(pause here for grimacing)……he could be right.

What!  Prof. Chuq is siding with Perry?

Sorry, but Perry does have a point in his statement…..

The Federal Reserve is quietly continuing with one of the many outrageous bank-bailout programs it initiated during the financial crisis–the one in which it pays big banks interest on their “excess reserves.”

What are “excess reserves”?

Money that the banks have but aren’t lending out–money that banks are just keeping on deposit at the Fed.

The Fed is paying banks 0.25% interest on this money.

0.25% interest may not sound like much, but it’s more than the banks are paying you to keep money in your savings or money-market account. It’s also more than you’ll earn if you lend the Federal government money for 2 years.Why on earth is the Fed paying banks not to lend? Well, back in the financial crisis, the Fed wanted to find ways to secretly bail out the banks without it being screamingly obvious to every American that that was what it was doing. And this particular bailout program was one of the more successful ways it discovered of doing that. Over the past few years, this program has secretly funneled about $10 billion in risk-free cash (rough estimate) directly to the banks, just for being banks and not lending. Don’t you wish you could get in on that game?

The Fed pays banks about $4 billion of interest a year on that money–the money the banks aren’t lending. And bankers get big bonuses based on that interest, for being so smart as to not lend money and instead just take the free interest from the Fed.Source:BI

Read the entire piece at Business Insider and then say that you cannot understand the frustration that Perry may feel….personally, I think the Perry is an idiot and most likely never heard of the piece in BI….but beyond all that…..we are still being screwed by the Banksters and we are smiling all the time…..how smart are we?

But let me add……I think Prick….my bad……Rick Perry is an idiot…he is a self-serving little toad…Just so there is NO confusion of what I really think of this arrogant snake……if he wins the election in 2012,  I will look for property in Nova Scotia…….why?  All is lost for this country!

Damned If I Know!

For the last couple of days I have been studying Fed chief Bernanke’s latest press conference……and have come to the conclusion that he has NO idea what to do next to save the economy…..and the title says it all!

Michael Snyder has made an excellent point……

Is the U.S. economy improving?  That is what Federal Reserve Chairman Ben Bernanke would have us believe.  Bernanke declared today that the “recovery appears to be proceeding at a moderate pace” and that everything is going pretty much as planned.  Sadly, the mainstream media and most of the American people still seem to have faith in the economic pronouncements of Helicopter Ben.  They seem to have forgotten all of the Bernanke quotes from before the financial crisis.  Bernanke pledged that there would not be a housing crash and that there would not be a recession.  It is amazing that anyone still believes that Bernanke has any credibility left.

Bernanke for once was pretty honest with his analysis……(okay, that is sarcasm)

Brutally honest, Bernanke admitted that he had no clue what was actually causing the current fragility in the U.S. economic recovery. While the FOMC statement assigned blame outside of the U.S., pointing at Japan along with rising food and oil prices, Bernanke was put on the spot by a reporter who noted the inconsistency behind that explanation and a lowering of long term forecasts. Bernanke took the hit, admitting only some of the factors were temporary and that he didn’t know exactly what was causing the slowdown, but that it would persist. “Growth,” said Bernanke, “will return into 2012.”

Come on!  Bernanke knows damn well what is causing the lag in the economy……his policies as well as the spending frenzy that politicians have been on for 20 years has everything to do with the condition of the US economy……..there is only one thing that we should recognize……

Sadly, this is about the best that our economy is going to get.

What we are experiencing right now is “the recovery”.  As we move forward things are going to get progressively worse.

A lot of people don’t like to hear that we are in the middle of a long-term economic decline, but that is the truth.

The era of tremendous economic prosperity for America is coming to an end.

An economic nightmare is coming.

You better get ready.  (thanx to Michael Snyder)

Everybody Has A Plan

Daily we hear of the plans for the correcting of the economic problems we have here in the US….there are tax cuts…..there stims….there are infrastructure….there are …..on and on……everybody has a plan….Repubs, Dems, Greens, Libertarians, etc etc….and now the Fed chief has a plan for deficit reduction….

Bernanke speaks and his plan is…….

“Clear metrics are important, together with triggers or other mechanisms to establish the credibility of the plan. For example, policymakers could commit to enacting in the near term a clear and specific plan for stabilizing the ratio of debt to GDP within the next few years and then subsequently setting that ratio on a downward path. Indeed, such a trajectory for the ratio of debt to GDP is comparable to the one proposed by the National Commission on Fiscal Responsibility and Reform.To make the framework more explicit, the President and congressional leadership could agree on a definite timetable for reaching decisions about both shorter-term budget adjustments and longer-term changes. Fiscal policymakers could look now to find substantial savings in the 10-year budget window, enforced by well-designed budget rules, while simultaneously undertaking additional reforms to address the long-term sustainability of entitlement programs. Such a framework could include a commitment to make a down payment on fiscal consolidation by enacting legislation to reduce the structural deficit over the next several years.”

Spoken like a true intellectual……..all that geek speak means…..the debt ceiling should be raised…..a bi-partisan approach to spending and a long term plan…period.

Three Cheers For The Recovery

From the VOMITORIUM

Who will be claiming responsibility for the slowdown in the economy, slowed to 1.8%, below the expectations of all the economic wiz kids in Washington….but it is still growth, just at a slower pace….we will hear the experts say on the tube….look, the will say, inflation is down or holding steady……good one….that is because they do NOT figure in gas prices of food….if you throw that in then our inflation is about to run wild….every quarter we hear how well the economy is doing….then explain to the millions at are unemployed…..we hear that the markets are doing well,  so good that we have not seen growth like that since 2008….then explain it to the people who have lost their homes in the last month…..go ahead I will pause here for your explanation………(waiting…..waiting……)

Wait!  They have an answer!

The first-quarter increase reflected growth in personal consumption expenditures, private inventory investment, exports and nonresidential fixed investment. Federal, state and local government spending fell. Imports, which negatively affect the calculation of GDP, increased.

See told you there was good news (sarcasm, in case you missed it)……

But there are few questions that need to be asked of Bernanke or Geithner or whatever Wall St. insider is at the helm of our economy…… American labor has issued a couple of questions they would like to be answered….and I think they have some excellent questions….

1. Where are the jobs and why are the implications of the Fed’s actions so far not leading to sufficient job creation?2. How is the Fed going to respond to continuing weak economic growth?

3. How is the Fed taking into account in its decisions the powerful headwinds facing the economy, including falling housing prices, rising energy prices and large-scale layoffs and wage freezes for public employees?

4. How will the Fed’s policies address the inadequate public investment in the United States?

5. What is the Fed’s plan for closing the gap between economic growth and job creation? Between productivity growth and wage stagnation?

6. Can we have a healthy economy until we deal with rising inequality?

7. Is there anything the Fed can do to revive our economy if government at every level persists in irresponsible, job-destroying budget cuts at a time of economic weakness?

We will know just how f*cked we are…these questions will Not be asked by anyone in the media….and there will be NO answered offered up by the government….so we will continue to be subjects of the elaborate con job that is economic recovery……

And the disconnect does not stop there…..a recent poll shows that majority of the people feel that the economy is going badly…..the disconnect is that the media reports on macro-economics and Main street lives with micro-economics….and Main Street could give 2 shakes in Hell about the debt…..their personal debt concerns them…food prices concerns them…..being unemployed concerns them…..macro-economics concerns them not…they do not care that Samuelson basically invented the study of the macro field…they do not care…their only concern is their family and their livelihood……