More on The Fed and why QE is coming. That has been my position in recent posts regardless of what happens in the economy. Here is a similar take by “traderjoe” in a response to a Zerohedge post on Thu, 10/07/2010 – 14:57 #633466:
The Fed has no choice. It’s not an excuse, or even a reason, but they have no choice. Why else would the Fed willfully destroy the dollar? The Dow’s at 11k. Employment is at least steady. Not rosy – but we haven’t definitely slipped back yet. What do they see? [Even Guy Adami on Fast Money asked this question.]
They see the end of the global fiat fractional reserve ponzi if they do nothing. They see EU bond auctions failing without ECB support. They see Ireland teetering, Greece cheating. Riots could break out at any time. They see munis teetering on BK. CA, IL have billions in unpaid bills. The unfunded liabilities kicking in. Perhaps they see China saying no mas on more Treasuries. They see a Congress that can only pass a nefarious banking/notary law in unison.
There can be no austerity – only cuts GDP and makes the problem worse. There can be no stimulus (unless they buy the debt themselves).
Without more QE, the banking system will implode in months, weeks.
They know the odds of QE IIb failing are overwhelming. But they have no choice. The collapse will happen any way, why not throw that one last Hail Mary pass? Maybe, just maybe, they get lucky. A new technology magically appears that changes productivity.
They know food prices are going up. That millions of people around the world will starve in the coming food panics, riots, and shortages. They know that gas will go to $5+ a gallon. They know corporate profits (see Conagra, SBUX, etc.) will get squeezed. They know savers are getting crushed. That middle class families will be torn apart with the stress and strain of paying their increasing bills with lower wages.
They don’t care about all of that. They just want to see if they can re-start the party one last time. You didn’t expect them to go quietly did you? You didn’t expect BB to come on TeeVee one night and confess: “We’re a private corporation. We create money out of thin air and take your collateral (productive assets and labor) in return. Fractional reserve lending is fundamentally flawed. It didn’t have to be this way. The Treasury can issue it’s own currency. Without debt. Without interest. But that wouldn’t have made us rich and powerful, and that was the point. Sorry about that.”
They will thrash about more as the air gets thinner and thinner. They see the likely end-game. They will push it into the future are long as possible. And just before the inevitable happens, they will press the panic button – a false flag, a civil insurrection, a world war. And then they will make their escape and hope to pop back up again when it is safe – as the savior to a devastated and downtrodden citizenry desperate for help.
It’s a sociopathic institution that cares nothing for the long-term health of our country, from its very inception to its dying breath.
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