Yes we’ve had QE3 for approximately 10 days but what really is it going to do for us. By the 11-1 vote the Fed decided to print $40 Billion a month for an unlimited and indefinite amount of time. Probably until sometime in 2015. So, the government has decided to kick out half a trillion dollars a year to boost the economy. So far all it has really done is reduce our credit rating to AA-. But what does Bernanke have to say about all of this?
Bernanke and the Federal Reserve are trying to create inflation in order to fix the economy. It doesn’t matter to them that fixing the issues now the way they are doing it will only create a giant pile of problems down the road. Inflation, debt, pffffft, not our problem they seem to be saying.
So we are going to inflate away with the third round of quantitative easing because the first two rounds worked so well. No, all the first two rounds of QE did was flush piles of fantasy money along with our credit rating down the drain. It is the equivalent of taking $40 out of your left pocket and giving yourself a $40 loan into your right pocket and then going out and spending $80. Then you write yourself a $40 IOU to cover the money you didn’t have, which facilitates another loan to pay that IOU, buying your own debt. How long do you think you could keep this up before someone comes and beats your ass because you keep giving them worthless paper.
Folks, unemployment sits at over 8% and that is only because we have tweaked the numbers to discount those who have stopped looking for work all together and those who are underemployed. Kind of scary when you think the number ought to be closer to 13% or higher. Add to that the spiraling cost of fuel, energy, food, and now textiles and you are heading somewhere I don’t think we want to go.
Making banks more liquid with this QE is not going to bring jobs to America, buying $40 billion of mortgage-backed securities is probably not going to stimulate the housing market either. Show me a jobless person that is going to be getting a mortgage anytime soon? Who wants to bet on this crap shoot?
All this is really going to do is make your dollar worth less and your things cost more. Housing, jobs, and other things of the like aren’t going to be more available; and the only way the unemployment rate is going to drop is if people just stop looking for work.
We’ve let the government write a check that our ass, nor the asses of our children or grandchildren can cash. Guess what kind of crash that comes with?