The Fed Policy is Just Beyond Stupid...

Posted by Ian Cooper - Tuesday, January 11th, 2011

From The Wall Street Examiner:

"The Fed’s pumping will now pick up from the reduced pace of the past two holiday weeks. That will coincide with another Treasury paydown this Thursday that will add even more cash to the system. New notes settling on January 18 will absorb some of that, but for the coming week conditions will be favorable for both stock and bond prices to increase.

An additional bullish factor is that both the commercial banks and foreign central banks appear to be entering the upside of their buying cycle. A normal cyclical uptrend in those forces at this point could be bullish influences for a month or two. At the same time, individuals appear to have stopped their run on stock mutual funds for the time being. All of that creates a bullish brew for stocks.

The issue is whether it will be sustainable. I have my doubts. Bernanke’s printing press seems to be adding about 10 cents a gallon per month to the price of gasoline. Food prices are also rising. The negative feedback mechanism of Fed pumping is running full blast. It is boosting economic activity thanks to government deficit spending but it is primarily stimulating non core food and energy inflation—the kind of inflation that the Fed pays no attention to. Bernanke’s policies are decimating the middle class thanks to soaring prices for necessities, and sending senior citizens to the poorhouse by the millions thanks to zero interest rates.

This Fed policy is beyond just stupid. On top of being doomed to massive failure, it is a crime against humanity. While impoverishing the middle class and the elderly, the policy is enriching the oil barons, speculators, and Wall Street financiers. When criminals are rewarded instead of punished what you get is more criminals and more criminal behavior. The system rots until it collapses completely. A house built on fraud cannot long stand."

Read more here.


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