Having committed treason, Ben Bernanke and the Federal Reserve Board do not dare cross into the Republic of Texas where they can expect to be “treated ugly” by the six gun a-tote’n, blue jean crotch adjustin’ Governor Perry. Congressional Republicans issued a letter to Chairman Bernanke expressing their displeasure as well, but withheld the dime novel cowboy threats.
Republicans are desperate to keep anything from being done to benefit the economy as their only hope for the election is to make things as bad as possible, and even if they begin to question this strategy, their billionaire overlords will not tolerate deviation from their plan. The Fed action is not going to have a huge effect, but will drive consumer interest rates lower making more people eligible for home loans and such. The current scheme involves selling 400 billion in short term debt that the Fed holds, and in turn buy that much in long term debt such as the ten year Treasury notes that is the basis for home mortgage rates. Home loans are already going for less than 4%.
The Treasury has been selling new short term debt at auction that is paying little more than zero interest, and ten year notes are paying slightly more than 2%. The S&P 500 fell 3% and this was blamed on the Fed action and their gloomy economic forecast. The real reason the market fell might have something to do with the downgrading of major zombie banks BoA, Citi and Wells Fargo by Moody’s Ratings.
This Fed switch up of Treasury bonds is referred to as Operation Twist. This because the last time it was tried was in the early 60s when Chubby Checker’s iconic song The Twist was the new dance hit. Too bad that Rock and Roll didn’t last, (Buddy Holly would have been 75 on Sept 7).
The Twist should in fact push stocks higher as the goal is to increase inflation or more accurately keep deflation at bay. Conservatives are screaming “inflation, inflation, a wheel barrow of cash for a loaf of bread. buy gold, buy gold!!!”. By the way, conservatives have gold they will sell you, and gold was down today as were commodities across the board. The USD continues to strengthen which is not a good thing for exports, but we don’t make anything, so it doesn‘t matter that much.
Actual inflation requires wages and prices to be driven up by excess cash in the system. In fact there are trillions of cash in corporate coffers and in the hands of the super rich who are hoarding it in the anticipation of the kind of runaway deflation you get in a major Depression. If you can buy for 10 cents on the dollar you can too become a billionaire robber baron like Fred Koch did. Fred came back from setting up Joe Stalin in the oil business in early 30s with millions in cash from the grateful tyrant, and he turned that into hundreds of millions thanks to deflation. After a later falling out with Joe, Fred started the John Birch society to rid the US of communists and anybody else he didn‘t like.
The current generation of traitors, the Koch brothers who fund the tea baggers and a whole host of similar operations to undermine democracy, would like to turn their billions into trillions and get rid of us socialists once on for all. A socialist to them is anybody who isn’t a billionaire.
Having the entire country owned by giant corporations and controlled by the managerial class is basically how Joe Stalin ran things, he didn’t much care for socialists either, despite the propaganda. Do you see the similarity between “comrade worker” and “Walmart associate”? Both convey similar ideals of fraternity, and have the same reality of slavery. www.prairie2.com