"Hope it works hehehehe" ???
Erm it can't fail, it can only burden and prop up. That is what it is doing; that is what it is meant to do. It is propping up a failed system (WallStreet [the Equity farce gamble & ponzi game], private banking, congressional overspending, etc).
Why do you think the markets are having a small rally?
Let me break it down for you:
1.) Every insider knew Feb-March would be either the near bottom or near bounce. Turns out to be a bounce point.
2.) The summer will be the next near bottom or bounce point.
Based upon that, knowing the general forward looking elements that go into that assessment:
3.) Cash flow was still needed for the bounce (small rally).
4.) That came in the form of the Fed adding assets to it's balance sheet.
5.) The Securities purchased by the Fed from WallStreet institutions, freed up cash for WallStreet to buy assumed undervalued equities.
The Fed has been a market manipulator and WallStreet support mechanism, as far back as I can remember, so same as it ever was.
6.) Increasing the money supply at the Federal Reserve level is cheaper than doing it in the private sector. Why don't bankers support: loans directly to businesses from the fed or expanding the money supply directly? Because anything that doesn't add to their balance sheet or ability to earn interest means they're out of the picture.
7.) The private banking money supply is still in a state of contraction. The pool of available money is shrinking, thus GDP, thus jobs, thus actual money to pay bills with and meet one's daily needs. It is contracting due to accounting procedures. They are required to destroy money; debt; when a loan defaults. If there is a difference in real value (of the asset) versus the debt-instrument (loan) the bank is liable for the difference. If a loan with an existing principle payoff value of $300,000 is only worth $150,000 true market value, then the bank is liable for the difference. Technically $150,000 is being destroyed from the available money pool, now multiply that by a million times--and you've got an insolvent banking system and severely collapsed money supply.
The article is a smoke-screen and yet few will ever read it anyways. It defers criticism to policy makers in Washington, "look what they're doing," while saying nothing about WallStreet or the true nature of the system. It's basically pointless.
The only problem with creating commitments and money at the National level--is failing to get ride of the slimy system existing in the private sector (private money supply creation scheme. PS: That causes more inflation than the Fed does. Why? It's obvious they've created more money through debt creation).
8.) The money supply does need to be expanded--to get back that portion of the money pool destroyed by private banking (their venture into RISK, making risky loans [creating money] for high interest income).
Last edited by topal63 (2009-04-03 13:50:07)
