Federal Reserve Chairman Ben Bernake said he will ‘help’ the economy again by buying down our unsustainable debt by $600 Billion. He says the Fed will buy bonds to do it. OK fine. Except for the fact that they will be printing money to pay for it. That is called monetizing the debt. Something that Bernake said he would not do. There’s a nifty word for it. They call it Quantitative Easing.
The result of crushing debt will cause one of two things to happen. Declare bankruptcy and start over. A move that would have worked and would have been a lot cheaper if the banks, Freddie, and Fanny were allowed to do it a couple of years ago. But now, the Obama administration and Congress has increased the debt to the point that our country and foreign countries are affected, not just companies. Foreign countries would have a meltdown if we were to declare bankruptcy. OK, maybe that should still be on the table. That will teach them to believe our leaders in Washington. I mean, if China said two years ago, “no, we’re not buying your debt any more. You need to live within your means,” we wouldn’t be looking at hyper-inflation being just around the corner.
The other option is to just print more money. What Bernake did today. Gee, all that will do will cause your savings, earnings, and investments to shrink to levels that would mean you can forget about retiring. You’ll have to work until you die, because a dollar will be worth less than a quarter, if we’re lucky. And, our debt that China, Russia, and other countries are holding will be just as worthless. And Obama just doesn’t understand why companies aren’t hiring? Maybe it’s because the need to survive is taking priority right now.
Why is all this happening? Because we have economic imbeciles in Washington that think you can put a fire out by putting gasoline on it. Some of them got thrown out yesterday. But there is still a lot of unfinished business there.
Links: Ben Bernake: Impeach Me – I’m A Damned Liar in [Market-Ticker] | Fed will spend $600B in latest bid to help economy