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Federal Reserve to continue pumping money

by Phantom Ace ( 129 Comments › )
Filed under Bailouts, Economy at September 18th, 2013 - 5:00 pm

In order to keep their Wall Street Friends happy, The Federal Reserve will continue printing 80 billion a year. Let’s not forget that Ben Bernanke worked at Goldman Sachs. He is determining Fed policy not on what is good for the economy or living standards, but just a few fat cats living good.

An economy still stumbling toward recovery was not enough to sway the Federal Reserve, which defied market expectations Wednesday and said it will not begin pulling back on its monthly asset-purchasing program.

Stocks on the Dow industrials and S&P 500 averages surged to record highs on the news and bond yields moved sharply lower, with the benchmark 10-year note most recently at 2.76 percent.

“This is incredibly wimpy,” David Kelly, chief global strategist at JPMorgan Funds, told CNBC.

[….]

aders cheered the developments, despite their somewhat dour implications for the state of the economy, with the belief that more QE would keep fueling the stock rally.

“The idea that the economy is still too weak to taper and market goes up has its limits,” Leon Cooperman, manager of the Omega Advisors hedge fund, told CNBC. “If we keep going we are taking away from future returns.”

Bernanke further insisted that market demands would not dictate Fed action.

This is not free market capitalism, this is corporate socialism. Wall Street maybe doing good, but the average America’s living standards continue to decline. The Federal Reserve and Ben Bernanke are not putting the interest of the nation in their decision, they just want to enrich their friends at our expense.

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Posted in Bailouts, Economy | 129 Comments »

Bernanke says the Fed needs to prop up the Obama Boom

by Phantom Ace ( 146 Comments › )
Filed under Bailouts, Business, Economy, Misery Index, unemployment at July 11th, 2013 - 11:30 am

Reading any business website would lead one to conclude Americans are in an era of unprecedented prosperity. A term like economy is on all cylinders and expanding job opportunities are all the rage. Even 1.8% GDP growth is now celebrated as “explosive” and “gaining momentum.” These economic pronouncements are very reminiscent of The Soviets bragging about fictitious industrial and grain production numbers. The reality is the economy is stagnant and sucks.

Ben Bernanke is propping up the Stock Market and Real Estate buy printing $80 billion a month. This has inflated asset prices, but has not benefited the economy. If Bernanke were to stop the money printing, the Stock Market would collapse and the economy would be back in recession. The Fed Chairman was honest in his assessment and says his QE policies will continue because the Obama Boom needs assistance.

WASHINGTON (AP) — Chairman Ben Bernanke says the U.S. economy still needs help from the Federal Reserves’ low interest rate policies.

Bernanke is telling the National Bureau of Economic Research that because unemployment remains high and inflation is below the Fed’s target, the policies are still necessary. He also said the economy is also being held back by higher taxes and federal spending cuts.

Bernanke is answering questions after a speech in Cambridge, Mass. that focused on the Fed’s successes and failures in managing the economy over the past 100 years. Bernanke didn’t signal any changes in the Fed’s bond-buying program during his remarks.

As a result of this admission, The Stock Market is roaring today.

Stocks spiked sharply across the board Thursday, with the Dow and S&P 500 crossing above their record closing highs, after Fed Chairman Ben Bernanke emphasized the central bank intends to keep its stimulus measures for the foreseeable future.

 Wall Street is addicted to the Fed’s easy money policies like a junkie is top Heroin. This is another bubble brewing and one that is not benefitting most Americans. The media will cheer every new high the Stock Market achieves without explaining the printed money behind it. For most Americans, the paycheck to paycheck struggle will continue in the Obama Boom

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Posted in Bailouts, Business, Economy, Misery Index, unemployment | 146 Comments »

The Obama Boom: Only the Rich are benefitting

by Phantom Ace ( 69 Comments › )
Filed under Business, Debt, Economy, unemployment at July 2nd, 2013 - 11:00 am

The media continues to crow about the Obama economy. Day after day there are articles online and “experts” on tv proclaiming America has entered an economic golden age of economic prosperity. Some of the economic analysts are even talking about a labor shortage and explosive GDP growth. The economy only grew at 1.8% which is anemic by any standards, but in the age of Obama it is considered red hot.

To the average America, they are baffled by the new media proclaiming an economic golden age. The Obama Loyalists choose to believe it, because Obama is a god like figure to them. The rest of us think this is just propaganda to prop up the faltering god-king. There is a 3rd reason why the media is proclaiming times are great, it is because they are rich and for that class of America things are good economically.

FORTUNE — One reason Ben Bernanke might be thinking it’s time for the Federal Reserve to pull back on its stimulus efforts could be American consumers.

During a speech at the Council on Foreign Relations last week, Fed governor Jeremy Stein was asked where he sees economic growth coming from, and he said consumers were one of the main reasons he was optimistic. “Consumers generally seem to be showing some signs of strength.”

They have seemed like a resilient lot. Despite a payroll tax increase, government furloughs, and the rest of the sequester cuts, consumers in general appear to be spending more this year. But that may be an illusion.

We got a glimpse of that last week. On Wednesday, the government said the economy grew 1.8% in the first quarter. That was down from an earlier estimate of 2.5%. The bulk of the reason for the revision was consumer spending. Americans didn’t open their wallets as wide or as often as originally thought.

To the people living in the media bubble, they really believe the Obama economy is booming because they are receiving the benefits. Ben Bernanke’s money printing scheme is inflating assets that are own by just the wealthy. This has created a disconnect between the perception and the reality of our economic situation. Hence whne these analysts make these proclamations of good times, many of them are actually not lying about their personal situation. For the rest of us, the economy still has not recovered.

Our political and economic elites are enjoying good times at the American public’s expense. This will can’t continue and will not end well for America.

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Posted in Business, Debt, Economy, unemployment | 69 Comments »

The Obama Boom: Easy Money is not the path to prosperity

by Phantom Ace ( 242 Comments › )
Filed under Debt, Economy, Inflation at June 25th, 2013 - 12:00 pm

The Stock Market has been rattled in the last week, but the media is being silent about this. Up until last week, the media was triumphantly proclaiming the economy is booming. Some media analysts even claimed we are experiencing an economic golden age and that we are in an era of unprecedented prosperity. Their proof was the booming Stock Market, but the propagandists did not tell the truth for the run up. Ben Bernanke and the Federal Reserve has been buying 80 billion a month in mortgage back securities from the banks. This has kept interest rates low and incentive the banks to invest in the stock market.

This money printing based equities boom has not benefited the average American. Food and fuel costs are high, due to a devalued currency, thus lowering living standards. Yet the media ignores this and continues to push the economy is booming. Printing money is not leading to real prosperity, despite the propaganda.

WASHINGTON — We are now discovering the limits of cheap money.

For more than four years, central banks around the world — led by the Federal Reserve — have aggressively pumped money into their economies to stimulate faster revival. These infusions are huge. From 2007 to today, the assets of major central banks nearly doubled from $10.4 trillion to $20.5 trillion, reports the Bank for International Settlements (BIS) in its just-released annual report. When these assets (bonds, mortgages and other financial instruments) are purchased, the sellers receive cash. The outpouring of cash aims to lower interest rates, push up stock prices and real estate values, and restore confidence and stronger economic growth.

The most charitable verdict on this massive monetary experiment is that it’s done modest good. In the United States, it did reduce long-term interest rates and, to some extent, bolster stocks. Even so, the speed of the U.S. recovery (about 2 percent annually) is roughly half the average of all recoveries from 1960 to 2007. As for the global economy, it grew 2.5 percent in 2012, down from the 3.7 percent average from 2003 to 2007, says IHS Global Insight. Few major countries are doing better now than before the financial crisis. Cheap money hasn’t been a smashing success. Still, when the Fed suggested last week that it might curb bond-buying later this year, stocks swooned.That’s one downside: Cheap money is hard to reverse gracefully. The larger problem is that central banks are trying to do things beyond their powers. Says Stephen Cecchetti, the chief BIS economist: “Monetary stimulus alone cannot put economies on a path to robust, self-sustaining growth, because the roots of the problem preventing such growth are not monetary.”

The easy money policies of Ben Bernanke are not benefiting the average American. But that is not the narrative the media is portraying on a  nightly basis. In a page out of Soviet propaganda, they claim the economy is good and prosperity is spreading. These lies will be exposed and the results of QE will be a disaster.

Here is an article claiming the economy will boom in 2014.

When will America’s economy finally stop limping along? 2014. That’s what a growing number of economists are predicting.

Things have been grim since the recession officially ended in June 2009. Job creation is barely outpacing population growth, and our GDP growth is sluggish.

 But next year, economists foresee a convergence of several factors that could finally kick this recovery into high gear.
[….]

Just how good? Steve Blitz, chief economist at ITG Investment Research, thinks GDP growth in the 3.5% to 4% range is possible for 2014, if the global economy doesn’t deteriorate. Monthly job growth could peak in the 300,000 range, he believes.

Blitz anticipates a large numbers of Millennials entering the car-and-home-buying stage of life, giving an added boost to the economy. Plus, the drop in defense spending associated with the draw-down of troops from Iraq and Afghanistan should be largely behind us.

I wonder what will be their excuse next year if this growth does not materialize.

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Posted in Debt, Economy, Inflation | 242 Comments »

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