What is the Real Effect of Borrowing and Printing Money - But Not Letting People Get to It?
We all know that big corporations - including lots of banks - have gotten millions of taxpayer dollars. Mortgage rates are remaining low and short term interest rates apparently going to stay that way for a while.
But truth be told, people and corporations are still going broke at an alarming rate. The reasons are varied but the huge elephant in the room is that cash is not reaching folks who need it the most to create jobs.
The gatekeepers are keeping billions of dollars locked in the, uh... vault. But so much money has been printed and borrowed from our children's futures that the gate is bulging enough to break. And break it will. When it does the result is inflation that that will bring back all those fond memories we have of the late 70's and early 80's.
Though some money is starting to trickle out it still seems to dry up before it gets to producers, workers, and spenders. So capitalism as we like it is just plain anemic. Underemployed folks, like Tom Persinger who now makes 24k/yr as a nurses aid, have have pulled significant power from the economy. He used to make 60k/yr for GM before they got bailed out. He is relatively lucky though. Just under one out of ten Americans have no job at all so they cannot contribute earnings so that others have jobs. But the government is also manipulating statistics. Prior to the Clinton administration that 10% would have been closer to 21% unemployment which certainly echoes the Great Depression.
California is issuing IOU's, Rhode Island shuts down for a couple of weeks - and all the rest of the states are scrambling to raise taxes and cut spending. Nothing is secure anymore.
Nervous about the stock market? Just when it seems equities are stabilizing you and every other investor gets faked out when they dump again. Real estate, though housing markets seem to no longer be in free fall, is still causing anxiety and hand wringing.
Bond trader pros are saying that the Fed is printing money just to keep the interest rates low. This is a long-term policy that is guaranteed to keep the economy anemic if not on all out life support. Until recently the US could console itself in the knowledge that all the other major world players were doing the same thing. Some of them are showing signs of solid recovery now. The reason? They did not sign on to a stimulus policy, took their bumps and the markets are recovering.
So what do the bankers do? Well, it seems they have decided to keep the tax dollars given to crank up the economy and instead use them to buy other banks. Opportunity like that just does not come along very often for sure and when people don't have jobs and assets are depreciating why not?
So the Fed is printing money, the government is madly borrowing, and all that cash is dammed up by the bankers. But they are going to eventually have to open the gates to avoid serious stagflation. When they do we will all be experience what, thus far, "developing" countries regularly see when their economies are grossly mismanaged - very high, if not hyper, inflation. Grab a paddle and try to stay above water. - 23218
But truth be told, people and corporations are still going broke at an alarming rate. The reasons are varied but the huge elephant in the room is that cash is not reaching folks who need it the most to create jobs.
The gatekeepers are keeping billions of dollars locked in the, uh... vault. But so much money has been printed and borrowed from our children's futures that the gate is bulging enough to break. And break it will. When it does the result is inflation that that will bring back all those fond memories we have of the late 70's and early 80's.
Though some money is starting to trickle out it still seems to dry up before it gets to producers, workers, and spenders. So capitalism as we like it is just plain anemic. Underemployed folks, like Tom Persinger who now makes 24k/yr as a nurses aid, have have pulled significant power from the economy. He used to make 60k/yr for GM before they got bailed out. He is relatively lucky though. Just under one out of ten Americans have no job at all so they cannot contribute earnings so that others have jobs. But the government is also manipulating statistics. Prior to the Clinton administration that 10% would have been closer to 21% unemployment which certainly echoes the Great Depression.
California is issuing IOU's, Rhode Island shuts down for a couple of weeks - and all the rest of the states are scrambling to raise taxes and cut spending. Nothing is secure anymore.
Nervous about the stock market? Just when it seems equities are stabilizing you and every other investor gets faked out when they dump again. Real estate, though housing markets seem to no longer be in free fall, is still causing anxiety and hand wringing.
Bond trader pros are saying that the Fed is printing money just to keep the interest rates low. This is a long-term policy that is guaranteed to keep the economy anemic if not on all out life support. Until recently the US could console itself in the knowledge that all the other major world players were doing the same thing. Some of them are showing signs of solid recovery now. The reason? They did not sign on to a stimulus policy, took their bumps and the markets are recovering.
So what do the bankers do? Well, it seems they have decided to keep the tax dollars given to crank up the economy and instead use them to buy other banks. Opportunity like that just does not come along very often for sure and when people don't have jobs and assets are depreciating why not?
So the Fed is printing money, the government is madly borrowing, and all that cash is dammed up by the bankers. But they are going to eventually have to open the gates to avoid serious stagflation. When they do we will all be experience what, thus far, "developing" countries regularly see when their economies are grossly mismanaged - very high, if not hyper, inflation. Grab a paddle and try to stay above water. - 23218
About the Author:
My Market Friend is Paul Kluskowskis's blog. It is packedwith current financial, economic, and market news. He is a financial manager at T/R Financial Management Group. He has been in the business for over 10 years and writes extensively with many articles and three ebooks to his credit. Paul also manages the PINGP Work Control Center Mgr at Xcel Energy. You can sign up for his financial servicesand information at My Market Friend
posted by X - Men @ 3:57 AM
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