The American Economic Association held their annual meeting this past week. (Imagine a bunch of liberal eggheads trying to justify Obama’s economic holocaust in abstract theoretical verbiage.)
There was a ghastly silence when Philadelphia Fed President Charles Plosser mentioned the “B word.”
Do yourself a favor and do a Google search for the past 18 months. How many references will you find stating that the Federal Reserve has been buying 60% of our government’s debt – USING PRINTED MONEY – during that time. (And all along you thought it was the ChiComs – same difference.)
This seems like a pretty big issue to me. I’d love to buy a Monopoly game at the toy store, grab all that monopoly money, and use it to pay off my mortgage, buy a vacation in Tahiti, and build an air conditioned gazebo for my outside cats Bevo and Speedo.
What a hoot to deposit all that money in my brokerage account. Use it to buy U.S. Treasury Bill mutual funds, and rake in a solid 4% on my “investment.”
Sound like a Saturday Night Live prank? Not! That’s exactly what the Fed’s been doing. They print money, buy T-bills, then the federal government pays them a 4% return. This is what the economic thumb suckers call “liquidity.” Pissing in the toilet bowl is liquidity too.
Steve Liesman (read “Lies Man”) this morning on Squawk on the Street was quite confident that unwinding the Fed’s $3 trillion balance sheet (i.e. selling those securities on the open market) would not cause inflation.
Let me get this straight. The Fed PRINTS money, buys T-bills, then sells them to investors for REAL money?
They’re worried about INFLATION? What about conspiracy, racketeering, grand theft treasury, fiscal holocaust?
