Thursday, December 13, 2012

"Oh Neville..."

The number of Initial Unemployment Claims fell by 29,000 to 343,000 which is the second lowest number for the year. It seems the total collapse of the US Economy that the right proclaimed was ensured by Acorn's rigging of the Presidential election has been put off. Same for the Fiscal Cliff. New polls show 2/3 of Americans support the President's position of raising taxes on the rich.

It has been speculated that Speaker Boner was putting off a deal with Obama until his own re-election as speaker on January 3rd, but this may not be the case. Boner has demoted four tea bag Congressmen from the Banking and the Appropriations Committees down to sorting hangers in the cloak room.

These were plum positions that made campaign fund raising (and bribe taking) a simple matter of holding open a large bag with the dollar sign on the side while the cash poured into it. A Tea Bag Congressman may find it difficult to get re-elected if he must actually raise funds from the 'Tea Party' instead of Wall Street. Outraged Right-wing groups have pledged to support the Bagger Congressman, but that doesn't necessarily mean they will actually want to share their own ill-gotten gains with them.

Just to indulge in 'wild speculation', I wonder if the exit of the Tea Bag Senator Jim DeMint was actually organized by mainstream Republicans just to get rid of him. There is a general belief that he's joining the Heritage Think Tank to take the 'think' out of the operation. What if it's just a tar baby? Once he leaves the Senate, he'll be stuck to it somewhere out in Brer Woods never to be heard from again. One can't assume we've completely out maneuvered the Billionaires, they aren't simply going to give up when they're this close to owning the entire country. It's very possible that the Tea Party will be gone by the next election. You can't really expect an astro-turf roots organisation to live long once the money guys shake the etch-a-sketch. I wonder what they'll call the new 'grass roots' movement, after they create it down at the 'think' tank. It seems impossible that they could re-invent themselves, but what we've just been through should have been impossible.

The Federal Reserve announced this week that they will keep interest rates at zero until unemployment drops below 6.5% or 'projected' inflation rises above 2.5%. They said 'projected' so even if inflation should spike from gasoline for example, they can continue to 'project' a lower rate. This is the first time since the Fed was given a new mandate by Congress in 1977 to do something about unemployment as well as inflation, that they (the Fed) have actually done anything. For the decades that Alan Greenspan ran the Fed, he read the Congressional mandate to mean that it was his job to control 'wage inflation', in other words drive down wages and break unions.

In reality there isn't much they can do. They will begin printing money again, this is QE(guess the number). This newly created out of thin air money will be used to buy bank held Treasury bonds and mortgage bonds to keep interest rates down. The important thing is that they are keeping us from dipping into deflation. The rich and their corporations are sitting on trillions in cash just waiting for an asset price collapse to buy up stuff for pennies on the dollar. Ironically most of the $3 trillion that corporations hold is really borrowed money that they got at these near zero interest rates. The Rich guys trillions are the result of 30 years of no taxes. They want to buy up the country, the riff-raff have owned it long enough. To use the words of  Ann Romney, for them, 'it's our turn'.

If the Fed were to cook up some real inflation these people might be provoked into actually putting their money to work rather than see inflation eat it up. The problem is that they simply have so much money that they aren't intimidated even by the Fed. "Oh Neville, tell one of the servants to do something about that yapping dog".


Anonymous said...

Write on, my friend, your're awesome. thanks!

Anonymous said...

I have a suggestion. You know those worthless IOUs that make up the Social Security Trust Fund why can't the FED offer to buy those back to fund Social Sucurity Trust Fund to the full amount of $2.6 billion dollars. This would relieve the bunched silk panties of the top 2% from funding the Social Security when the FICA tax can no longer make payments. George W. Bush came up with the worthless IOUs in describing the Trust Fund not realizing his Grandfather, Goerge Prescott Bush, funded his inheritance with US Government Bonds.

prairie2 said...

Fed buying SS bonds, actually they could do that if it came time to redeem them and the government couldn't cover them. It would be inflationary but it would be an easy way to spread the cost around. Only there's no reason to do that. You can't placate the Republicans anyway, just toss them off the fiscal cliff and see how well they fly.