Quantitative easing (QE) by the Federal Reserve did plenty for Wall Street and international banking, but hasn’t warmed up the real U.S. economy. The Federal Reserve creates money out of thin air to buy U.S. Treasuries, mortgage-backed securities and corporate debt for temporary funding purposes with the hope of selling them at an advantageous time. Indications (based on gov’t figures) are that either the stimulus did not work or it did work, but the real economy was more severe and harder to control than advertised. Your opinion? The ongoing structural and underlying massive debt is now more pressing thanks to the Federal Reserve policies. At this moment, Fed Chairman Ben Bernanke is arriving in Washington to testify before Congress to answer for the disaster. No doubt, he will bumble on about financial literacy, like this knowledge actually helps anyone when greed and corruption were and are the largest issues behind the meltdown. The Fed is just another large corporation with their own money-making agenda.
The policy followed by the Fed has bailed out the system that was initially responsible for the meltdown, but has done little to nothing for unemployment, exports, small business, consumer spending or declining revenues. For years America lived on credit as wages have not kept pace with real expenses. Moral support by the banking community has vaporized since the they have been unable to monetize securities. On balance, the simple act of loaning money isn’t enough for them. They want another way to make runaway profits, as if the fractional reserve isn’t rich enough for them!
The Fed itself is aware of what they are facing and the obvious disconnect from all their past projections. This was published in a chart included in the latest economic paper by the Fed in Dallas titled “Unemployment Exceeds No-Stimulus Forecast.”