Some Federal Reserve officials are open to raising the amounts of mortgage and Treasury securities purchase programs beyond the $1.75 trillion that they have already committed to buying, according to minutes from the Fed’s April meeting.
Officials, meanwhile, projected an even deeper recession than they expected three months earlier and a more sluggish recovery over the next two years as labor markets remain under pressure.
“Some members noted that a further increase in the total amount of purchases might well be warranted at some point to spur a more rapid pace of recovery,” according to the minutes of the April 28-29 meeting, released Wednesday with the usual lag.
The Fed can buy all it wants, but the fact of the matter is that most of what the Fed is buying is worthless – to put it into more understandable terms: the Fed could buy my mortgage from my current lender, but the Fed would be buying a mortgage on a piece of property which not only can’t be sold to cover the mortgage, but probably can’t even be sold at all given the number of foreclosed houses on the market undercutting any attempt to sell a non-foreclosed property. So, the Fed will buy worthless securities with money printed into existence at a time when the wealth value of the United States – the source of our currency’s value – is rapidly declining. The institutions which receive this fiat money will then, as swiftly as possible, convert it into anything not tied to the value of the dollar because those dollars are being made progressively worth less by the Fed printing them in order to buy the worthless securities. Who gets screwed in all this. Go look in the mirror.
The old economy is dead – that economy which had as its crowns the Federal Reserve, the International Monetary Fund, the World Bank…all these institutions built to move make-believe money around in a usurious financial system which could only exist by means of the greater fool economic theory (in other words, there is always a greater fool to buy the security). We need a new economy – really, of course, a return to a real economy. We need an economy where the farmer, miner and manufacturer rule the economic roost; a place where there is a free movement of goods and people; a place where a degree in law, accounting or business is of less worth than ten year’s experience on the shop floor.
We’ll get this economy, in the end – but it might take a while before the paladins of our current collapse are forced out of power.