Some argue that the Fed is inorganically manipulating free enterprise while others maintain that all the Fed is trying to do is create a balanced economy. This infographic looks at how the Fed’s actions are actually impacting the economy and just what information is still being kept from us.
This short video – on the unsustainability of government spending – should be watched by everyone, including those not yet old enough to vote. It should be shown in every high school and college classroom. Anyone that cannot understand this presentation should not be allowed out without a guardian.
Nouriel Roubini thinks things could get bad after the U.S. presidential elections in November, so bad that the Fed may not be able to prevent the next stock market plunge, and may even go so far as to buy stocks to keep things afloat at some point. Read on to find out what else Dr. Doom thinks might be in store for us.] Words: 310
If you are angry about LIBOR – angry that 18 banks can set one of the world’s most important interest rates in such a poorly supervised, ill-understood manner – you should be even angrier that just 12 people sitting in a room can set the world’s single most important interest rate to suit the needs of the stock market, all under the pretence of controlling inflation? Let me explain. Words: 810
Interest rates have been manipulated to keep them extremely low in an attempt to stimulate the economy but…unless deficits are dramatically reduced…. interest rates will eventually rise and government interest expense will double or triple from the amounts being paid today. That potentially triggers a debt death spiral, where government has to borrow more than otherwise expected. It also raises the credit risk and could ratchet interest rates up again. It has happened to Greece, Portugal, Spain and other European countries already this year and could well happen in the U.S. too. Words: 595
The US Federal Reserve, which has been the life-support for the U.S. economy (for better or for worse), is finally discovering that its policies and theories don’t actually apply [in] the real world….This means that the primary prop underneath the U.S. stock market and financial system (namely Fed intervention) is slowly being removed. What follows will not be pretty and smart investors should be taking steps now to prepare in advance. Words: 350
The Federal Reserve is in quite a pickle. Mr. Market expects them to print money to support the economy…but if the economy continues down this path, we may have a deflationary depression on our hands…Fed Chairman Ben Bernanke has said he will not allow this to happen under any circumstances. The Fed wants to keep interest rates low and create inflation so that it can pay off existing debt with cheaper dollars, avoiding insolvency. [The fact of the matter, however, is that] the Federal Reserve cannot stop printing money or the U.S. will experience the economic phenonmenon referred to as the Minsky Moment. [Let me explain just what the aforementioned all means.] Words: 1195
“Ben Bernanke is trying like mad to stimulate credit and lending but to no avail. It’s an uphill battle because of demographics, student debt, and lack of jobs. [Frankly however, given such an environment,] prospects for family formation are fundamentally very weak and overall economic fundamentals are very weak as well” [and that certainly does not bode well for housing coming back anytime soon. Let me explain.] Words: 650
The next crisis will be a Crisis of Faith pertaining to the US Federal Reserve… when the market begins to realize that the Fed CANNOT backstop the entire financial system (it never could but most people hoped regardless) – and…when this happens, THEN the REAL crisis will hit and it will make 2008 look like a picnic. Bernanke has [already] admitted publicly that he’s clueless [as to] what’s going on [and this] is a MAJOR step towards the world realizing that he’s lost control. [As such,] if you’re not taking steps now to prepare for what’s coming, you need to start moving. [The REAL crisis is coming – soon! Let me explain.] Words: 1018