Quantitative easing is set to take place again from our friends at the Federal Reserve. If you listen to news channels and read the papers this is what the Fed is supposed to do to help “jump start” an economy that may be slowing down a bit.
Is that a word?
Imagine you are a heroin addict. Basically you spend every moment of your day looking for the next hit, the next injection, the next rush of the drug to provide you happiness. If you start to go into withdraws bad enough you start to do things you might normally not do to get the money to buy the drugs. Perhaps steal it from other people, maybe sell your body, heck, sell your kids to get that drug, because you are addicted to it mentally and physically.
Today your politicians in Washington, the bankers on Wall Street, and most of your business media talking heads are all addicted to a drug. It is not heroin, or cocaine, no this drug is far worse and causes much greater destruction than those. This drug is called “free money“, the root of all evils, the morphine of our time.
Imagine if you run a big bank or corporation. The Federal Reserve calls you up and ask you to “borrow” one billion dollars from them at zero percent interest and that you can do whatever you want with the money and never need to pay it back. Gosh that sounds like something those banks and corporations may take the FED up on. Soon one billion dollars appears on their balance sheet. If you are a bank you can loan out 9 TIMES the amount of that one billion in “new money” to customers and earn say 5 to 10 percent interest on it. If you are a credit card bank maybe 20 percent. If you are a corporation you could just leave it on your balance sheet and watch your stock price go up because all of your investment ratio’s just improved. Why go hire anyone with that money because employees just add more liabilities to a company, the goal is always less employees to do more work, and rise the companies bottom line, you think a billion dollars sitting in cash does that?
Imagine if your a politician, you get to run around on the day that the FED says it will provide “quantitative easing” and say;
“Look I am making it easier for banks to loan you money so you can better your-self!”
“Look I am giving money to corporations so they will put more Americans back to work!”
Every newspaper in America that wants that status quo politician re-elected runs with those quotes and the matter is closed. They never actually follow up and see if the banks lend or the corporations hire americans, just move along.
Over the next few days billions if not a few trillion dollars of “new money” will magically be created out of thin air, not even printed just entered into the computer ledgers on the largest “to big to fail” banks and fortune 200 corporations. Never once will you be told of the MASSIVE INFLATION this will cause on the everyday items that you and your family need to survive on such as gasoline, food, health care, etc. Do you really think gas has gone from $2.00 gallon to $4.00 gallon in the past three years because of decreased oil supply? Do you believe the $4.00 loaf of bread just magically went up because we all now are seeing increases in our paychecks?
No the first two rounds of “free money” that took place in 2008 and 2010 cased MASSIVE rises in basic commodity prices. None of this free money has been removed from the system, it just keeps rising, and every-time more money is printed the money you have becomes worth less.
Why does wall street go up while all of us suffer economically, quantitative easing. Guess what it is about to happen again, buckle up my readers, buckle up!
Filed under: Economic Collapse, National Blog · Tags: business media, commodity price, corporations, federal reserve, free money, inflation, new money, news channels, politicians, quantitative easing, wall street