With QE3 Federal Reserve And Obama Administration Fully Qualify For Definition Of Insanity (Doing SAME Thing Over And Over And Expecting Different Results)

Things aren’t getting better.  Obama told you a lie.  Democrats have been telling you lies.  I (and other conservatives) have accurately and reliably told AND PREDICTED the truth from the get-go.  As I will document in this article.

First of all, the QE3 that was launched today is an open recognition of the failure of the Obama administration by the Federal Reserve.

The initial title of this article – as you can see by examining the link itself – was “GOLDMAN: Bad Jobs Report Puts Odds Of QE Next Week Above 50%.”

GOLDMAN: It Looks Like QE Is Coming Next Week
Joe Weisenthal|Sep. 7, 2012, 8:47 AM

Quick blast outta Goldman.

BOTTOM LINE: With today’s August employment report showing a nonfarm payroll gain of 96,000 and an unemployment rate of 8.1% because of a drop in the participation rate, we expect a return to unsterilized and probably open-ended asset purchases at the September 12-13 FOMC meeting.

MAIN POINTS:

1. We now anticipate that the FOMC will announce a return to unsterilized asset purchases (QE3), mainly agency mortgage-backed securities but potentially including Treasury securities, at its September 12-13 FOMC meeting. We previously forecasted QE3 in December or early 2013. We continue to expect a lengthening of the FOMC’s forward guidance for the first hike in the funds rate from “late 2014” to mid-2015 or beyond.

So this isn’t a “good thing.”  This is a bad thing.  The 200 point increase in the stock market is a temporary blip and ultimately only the institutional investors who can move money around in microseconds will be able to benefit from it.

Here’s another article I wrote back in August that cites proof that the QE3 that we just saw Friday is the result of the Obamanomics disasterThe Fed simply didn’t launch QE3 because Obama’s economic policies are working; they did it because Obamanomics has utterly failed.

Second, let’s look at the “success” of quantitative easing:

Here’s more on that from an article I wrote back in August 2011.  Notice that I predicted with complete accuracy that QE2 would fail and that we would be at precisely the point where we are now trying a THIRD round of quantitative easing.

And this isn’t really even “QE3″; it’s really “QE4.”  Because Operation Twist basically WAS QE3.  It was certainly at the very least a “primer” for QE3.  I’m hardly the only one to say that, as it’s rather easy to show.  Just how many times do we have to keep trying this???

As long as Wall Street keeps getting its massive doses of sugar (really more like crack cocaine) from the government, it keeps feeding and feeding from the massively-government-subisidized feeding trough.

Look at the chart above and answer this question: if I were a drug addict pursuing doses of crack, how would a graph of my behavior look different?  I’d have my hit (QE1) and then crash; then I’d take another hit (QE2) and then crash; so I’d need another hit (QE3).  And then another one, ad infinitum.  That is the nature of destructive addictive behavior; and the addict either changes or he dies.  We’ll see in November if we’re ready to change or if we want to keep pursuing economic crack until we collapse and die as a nation.

How many times do you keep doing the same thing?  Now that we are at “QE3,” how is this not the classic definition of insanity???

What do you think the odds are that the market is going to tank again just like it did the first two times in anticipation of a QE4????  And you need to realize that a vote for Obama IS a vote for QE4.  And QE5.  And we’ll be a banana republic before Obama’s Fed would have a chance to do a QE6.

Not counting QE3 today, the Federal Reserve has pumped (or dumped) more than $2.3 trillion in money that it invented by adding zeros to their computer under Obama.

Let me ask you a question?  Where did that $2.3 trillion go?  Are you richer???

You sure aren’t.  In fact, even if you blame the ENTIRE recession on Bush (as liberals invariably do), Obama has still been very nearly TWICE as disastrous for household incomes in his “recovery” than you can blame Bush for during “his” recession.  You’re being lied to every single day.

When George Bush left office, a senior citizen with $300,000 in bonds – basically a fairly average retirement nestegg – could collect $1,500 a month in interest.  Which was enough for them to live on and be able to have the principal for emergencies and hopefully be able to leave that principal to their children.  But Obama and Bernanke have obliterated that; now that same $300,000 is producing only $200 a month in interest.  Which is very obviously nowhere NEAR enough to live on.  And so senior citizens are eating away at that nestegg that they counted on at a very alarming rate.  Obama and his failed policies have screwed these people – and the mainstream media will NOT talk about it.

Now the Fed balance sheet is going to be over $3 trillion.  And you can add to that shocking tally another $40 billion every single month for the foreseeable future.  Before Obama took office, it was $800 billion.  Nobody’s talking about what that massive devaluation of our currency is going to ultimately cost us.  Nobody is talking about the fact that the people who are going to pay the highest tax as a result of this action – and it IS a regressive tax – will be retirees who will see the value of their savings drop even as they look at interest rates and pension funds that pay them nothing.  Retirees are not in a position to snort the crack of quantitative easing; they depend mostly on bonds.  And the Obama administration and the Federal Reserve have decided to stab the bond market  that older investors necessarily depend upon in the heart to artificially inflate the stock market.  Until they have to do it again.  And again.  And of course pretty soon again and again after that.

Commodities like oil and food – which conveniently are being ignored as proof positive that we are already seeing MASSIVE inflation – will continue to go up and up and up (see here and here and here for examples).   The fact of the matter is that prices are rising dramatically and HAVE BEEN rising dramatically, and what just happened today will sure that they CONTINUE to rise dramatically.  And everybody but Obama and the Federal Reserve know it.

I put it in biblical terms here.  And I pointed out:

The only thing propping up the economy under Obama’s morally and fiscally idiotic policies is QE2. Banks and major businesses are not being allowed to fail (it’s all too big too fail in an increasingly fascist system in which the government dominates the banking and corporate spheres). Right now, the system Obama has only made more broken is being kept afloat in cash being created out of thin air. The last time quantitative easing ended, the DOW immediately lost 16% of its value in two weeks. And QE2 is set to end in June.

This means QE3, and then of course QE4. Because “QE” means “Quack Economics” far more than it should mean anything else.

I also pointed out that this would fail way back in 2010.  And I pointed out that all the Federal Reserve is doing is monetizing Obama’s damn insane deficits.

But the real inflation monster is still yet to come.

Back in May of last year I wrote this:

QE2 is the economic equivalent of sugar in nutrition. Will it provide quick energy? Sure it will. Will that quick energy come at the expense of future health? You bet it will.

Right now, as a result of the Obama Federal Reserve’s policy of increasing the monetary supply by buying debt from itself (literally creating money out of thin air), there is more economic activity. Right now, as a result of this policy, credit rates are lower. Fewer banks and corporations are going under because of the ready access to cheap money. Investors see the stability and invest.

We should all feed our children tons of sugar, so we can enjoy the short term bonanza of frenetic activity.

Unless you worry about all the cavities, the weight gains, the diabetes, and of course that huge depressing crash with all of those catastrophic health consequences that necessarily come later.

The first time we ended QE1, the stock market lost 16% of its value in two weeks. Which is to say it didn’t work the first time for the same reason it won’t work this second time. Or a necessary third time, etcetera.

One of the more sinister effects of quantitative easing is that it essentially becomes a tax on saving. You were busy at work putting away as much as you could during a period when your money was worth more. But now, as a result of artificially increasing the money supply, all that money you accumulated in saving is worth less. Why is this? Because you can increase the money supply all you want, but you’ve still got the same finite amount of goods and services. And when you’ve got twice as many dollars in the money supply as you had before, over time those same goods and services will cost twice as much as before, and so on.

Right now, prices are going up dramatically on virtually everything that matters. And yet the only ones who refuse to admit it are the federal government and its staunchest mainstream media propagandists who think and report what the Obama regime wants them to think and report.

In another article I wrote over two full years ago:

An increase in the money supply is rather like an overdose of drugs. And in this case the effect of the overdose will be hyperinflation. Basically, the moment we have any kind of genuine recovery, our staggering deficit is going to begin to create an ultimately gigantic inflation rate. Why? Because we have massively artificially increased our money supply beyond our ability to actually produce real wealth, and that means that money will ultimately be devalued. There’s simply no way it can’t be. If simply printing money solved financial problems, the government could just mail everyone several million dollars, and we could all retire. The problem is that more money chasing a limited supply of goods simply pushes up prices higher and higher without doing anything to solve the underlying economic problems. If we have a recovery, with increased economic activity, there will be increased demand on the money supply, forcing an upward climb in interest rates as a means of controlling the currency. And then we’ll begin to seriously pay for Obama’s and the Democrat Party’s sins. Paradoxically, the only thing preventing hyperinflation now is the recession, because people aren’t buying anything and therefore aren’t competing for those limited goods.

THAT is why we haven’t yet experienced truly catastrophic inflation YET.  But the moment we ever actually start to get out of the economic hellhole Obama has dug us into, we will see inflation at levels that will shock and dismay you.  You mark my words.

Now that we are officially at QE3, I want you to watch this video to see what necessarily awaits you:

Get ready, because the American economy WILL be going on a scary ride:

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4 Responses to “With QE3 Federal Reserve And Obama Administration Fully Qualify For Definition Of Insanity (Doing SAME Thing Over And Over And Expecting Different Results)”

  1. HL Says:

    My husband told me this morning that it is actually being called QE INFINITY.

  2. Michael Eden Says:

    HL,

    I hand’t heard that one. I guess it’s “QE to infinity” (… and beyond!).

    As soon as I read your words I understood why: this is an open-ended purchase (read “monetizing of the Obama debt”) that will be a monthly thing ad infinitum.

    This would terrify people if they had a freaking clue what was going on. And there wouldn’t be a single person who was either retired or hoping to retire in the next ten years who would vote for Obama if they understood that he just massively taxed their retirement funds to “redistribute” their wealth.

  3. FMC Says:

    Great article, Michael!

    I have a Grandmother who is nearly 87. She lives by herself and lives off of social security mainly and the interest (or the lack there of) that is being spun off from her CD’s (certificates of depreciation). She only has roughly 50K in CD’s, so she doesn’t get much on an annualized basis, thanks to helicopter Ben. Whenever I see her, she complains about the costs of everything she buys/needs going up. I have to remind her that back in 2002-2003 time frame, I had strongly recommended that she trash the CD’s and put the money in gold in silver, explaining to her that was the next big bull market (gold was trading for under 300 then) and, if she did that, she would have nothing to worry about. What a shame, she didn’t do it and still wont do it. Today, politicians and Bernanke are killing (stealing from) seniors like my Grandmother!

    I remember back in 1998 when a hedge fund known as Long-Term Capital Management (LTCM) blew up during the Russian financial crisis. The Fed ended up orchestrating a bailout of the fund, which was leveraged to the hilt, because of fears that it would upset the world economy. Aside from the LTCM bailout, the Fed lowered interest rates which increased liquidity into the economic system. This liquidity quickly found its way into the stock market. Although the Nasdaq had already seen great gains, it nearly doubled itself in the months (roughly a year) following the LTCM bailout and Fed easing. Of course, the Nasdaq bubble hit its nadir in early March of 2000 and began its collapse shortly after the Fed started raising interest rates

    Shortly thereafter the Fed started easing again on the heels of 9/11 to stimulate the economy, and this money found its way into the housing market, creating the bubble that led to the collapse of 08′. Now, the Fed is up to its old games, this time creating the bubble of all bubbles in the U.S. Treasury market. We are in the end game, because when this bubble implodes, it will take everything down with it and no amount of easing and pumping will rescue it. Although the Fed has had many accomplices along the way, ultimately the blame for all this mess lies with them and, secondly, the politicians. Bernanke is an insane madman!

    Looking back, there was still a saving chance if the Fed would of just let the Nasdaq bubble burst and let it run its course without Fed intervention. After a nasty recession, which is really the way an economy heals itself, and some time, the economy would be just fine today. Unfortunately, the Fed has continued manipulating and distorting this economy, basically destroying it. Like I’ve said before, we need to get rid of both Obama and bernanke. Actually, we would be better off without the Fed, just letting free market forces dictate interest rates and money supply.

  4. Michael Eden Says:

    FMC,

    The problem with the Fed – and with socialist elite bureaucratic tinkering with the machine in general – is that you undermine the principle of cause and effect.

    If I touch the hot stove and I burn myself, I feel that pain right away and I learn a valuable lesson. In the sense of economic principles, the same principle ought to apply: if I blow all my money stupidly and I lose my home and I’m really hungry, I should hopefully learn not to blow all my money stupidly.

    But of course we’ve got the welfare state, and so truly stupid personal behavior is not only subsidized but even REWARDED. And when I say “REWARDED” I mean it: welfare literally pays better than work, so why work?

    Of course, those who parasitically live off “the system” have turned their backs on any sense of honor and they are essentially in a permanent state of childhood (depending on mommy government) at the expense of decent people. And they end up pissing away their lives frivolously when they could have accomplished so much more had they just applied themselves in a positive manner. And the Democrats in rewarding their foolish behavior contribute to the pathetic lives of all the people who live off of that immoral system by voting “Democrat.” But that’s another discussion, I suppose.

    In the case of crony capitalism and debt-spending and federal-reserve-style policies, you get an abrogation of “cause and effect” in spades. You can keep doing the same stupid thing for YEARS and even DECADES before the “effect” finally comes. The Federal Reserve method of doing that is to devalue the currency at the expense of all the people who worked for and saved that currency prior to the Fed’s policies that steal their interest and their appreciation that they SHOULD have received. Like your grandmother. One of the ways the liberal politicians do the same sort of thing, of course, is to force your children (or, in the case of liberals, somebody else’s children because many of them have murdered their own children) to pay for your stupidity. Why should I sacrifice when I can vote for liberals – who don’t give a damn about the next generation that can’t vote NOW – to give me stuff now at their expense later???

    And, of course, since the liberals invariably separate cause from effect and the pain is delayed and experienced somewhere else in the system at somebody else’s expense, it’s also easier to lie about the “cause” that actually produced that effect. If I touch the stove and get burned, and somebody tells me it wasn’t because I touched the stove, but because I looked to the right or whatever “alternative theory” they can come up with, it wouldn’t take me very long to figure out that no, it was my touching the damn hot stove that caused me to experience the effect of getting burned. But when the effect comes five damn years down the road due to all the liberals’ monkeying around with the system and it’s somebody else who gets burned, you can come up with pretty much any damn theory you want, can’t you?

    Ultimately, there’s no avoiding the “effect” of stupid policies; and if we do it long enough the nation will collapse.

    Which is EXACTLY what the Bible says will happen in the last days as the beast comes riding in on his white horse in Revelation 6 to “save the day.” And the beast will be the ULTIMATE “big government messiah.”

    The thing that I now realize is that bad people invariably prefer to believe lies than to believe the truth. That is ultimately the reason why they ARE bad people.

    John Adams rightly stated that “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.” And we are now seeing that “democracy” is the worst and most destructive form of government that there is when a people become a bad people and vote for evil policies and evil candidates.

    This is exactly where we either are or very nearly are as the world waits for the arrival of the Antichrist, the beast of Revelation.

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