Last week the Federal Reserve began the second incarnation of "Operation Twist," an attempt to drive down interest rates by purchasing long-term Treasury debt and selling short-term debt. This is just the latest instance of the central bank desperately flailing around doing something merely for the sake of doing something. Fed officials still do not understand – or admit – that the Fed itself caused the financial crisis by driving interest rates too low and relentlessly expanding the money supply. Thus, this latest action will just exacerbate the problem.
Markets, however, understand that the Fed has failed and has no clue what it is doing. This is why markets went into a tailspin after the Fed's new strategy was announced. Stocks, bonds, and commodities dropped in price while the financial press wondered whether this worldwide sell-off meant that the entire system was collapsing. Not since 2008 had there been such a dramatic drop across so many different sectors of the market.
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5 comments:
Printing money to buy our own debt only steepens the slope to our demise.
Rick,
Well said.
We must finally face the reality that these folks are NOT stupid. They understand EXACTLY what they are doing - and are very good at it.
They are deliberately destroying our currency and thereby our sovereignty. Global Government is now the goal. The Bank of England and the Federal Reserve Bank have always been one and the same.
Most do not realize the ownership of the Federal Reserve Bank has been kept secret since its inception in 1909. It is believed to be owned by the Rothschild Family Dynasty - the same one's who crashed England's stock market 1 day before Wellington's defeat of Napolean. It is a fascinating story.
Check it out.
The Fed has nothing to do with the bank of England. The Fed is American. It looks out for Americas interests, not England. And its not private. the Fed (like the name) is Federal. Get it? It is part of our government. They do what is best for the poeple of America.
The Fed is private. Do your research. The Fed is destroying America.
10:54... the sarcasm is DRIPPING from your post. Why don't they call it by it's REAL name --- "The Shell Game" .... China is very angry at how we are printing worhtless money and paying them with it. Our money is just a step above colored counterfeit paper. Maybe voting will help.
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