Community | August 12, 2010 | 44 comments

Fed Leads America “To The Brink Of Collapse”

source: http://www.prisonplanet.com/fed-leads-america-to-the-brink-of-collapse.html

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Dagum
When even the New York Times and CNN are admitting that the United States faces not only a double-dip recession but potentially a new great depression, any alarm bells that have not been rung should now be sounding loudly.

Following in the footsteps of the New York Times’ Paul Krugman, who in June wrote that the United States had entered a third depression similar to the Long Depression of the 19th century, CNN Money carried an article yesterday brazenly entitled, Is this finally the economic collapse?.

The piece, written by Keith R. McCullough, points out that the Fed’s announcement that it will start buying Treasury debt, is a “crossing the Rubicon” moment and “could lead the country to the brink of collapse”.

“Crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It’s a point from which it’s almost impossible to return,” states the article, adding that the market has not responded to quantitative easing so to engage in more of the same would be completely futile.

“With 40.8 million Americans on food stamps (record high) and 45% of the unemployed having been seeking employment for 27 weeks or more (record high), what’s left if (or when) QE2 doesn’t kick start GDP growth? Should we start begging for QE3? Should we cancel the bomb of the National Association of Realtors’ existing home sales report, scheduled for public release on August 24th? Or should we bite the bullet and accept that current economic policy dictates 0% returns-on-savings, even as Washington continues to lever-up our future to the point of economic collapse?” writes McCullough.

The Dow Jones slipped by 265 points yesterday as both the Bank of England and the Federal Reserve indicated that, as we predicted all along, the happy clappers who blithely talked of “robust recovery” were in fact completely wrong and now that the futile and transitory life-support machine of quantitative easing has been turned off, the picture looks almost as bad as when the crisis began in 2008.

Predictions on GDP growth seem to be shrinking by the day as Ben Bernanke greases the skids for QE2 – a fresh round of printing money out of thin air, destroying the long term value of the dollar which has already had 9 consecutive down weeks since June but ensuring the central bankers that run the United States continue to reap lucrative interest payments on the spiraling national debt. The U.S. government, via the taxpayer, paid out nearly $20 billion in interest on debt last month alone, as the Federal Reserve enjoys record profits, only 20 per cent of which is returned to the Treasury....

Continued at: http://www.prisonplanet.com/fed-leads-america-to-the-brink-of-collapse.html
  1. groups:
    Community,   US Politics,   Progressive America,   Current Democrats,   4 more
  2. tags:
    The Federal Reserve,  Alan Greenspan,  Ben Bernake
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44 comments // Fed Leads America “To The Brink Of Collapse”

  • pissedoff
    • 0
      pissedoff  

    • Perhaps the only hope for this country is the total collapse of the Government and the Fed.
      This would leave Americans the freedom to excel without big brother dictating every aspect of our lives.

    • 1 year ago
  • GodIsTheReason
  • Nephwrack
  • toyotabedzrock
  • Saladin
    • +6
      Saladin  

    • “Crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It’s a point from which it’s almost impossible to return,”

      This is bullcrap.

      We were over 120% of GDP-Debt after WWII and then we had the largest economic growth over the next two decades in our entire history.

      The debt is a problem, but it's a problem because we give out huge corporate subsidies, fight massive wars and encourage our own businesses to go international with their jobs. This does nothing to help our long-term economic needs but we refuse to stop any of it. Then we cut taxes as if that'll fix things and the people celebrate. It's a disease.

      We're so dumb we refuse to even look at what's destroying us.

      If we don't fix these core problems, then it isn't even going to matter whether we fix the Fed or not because the debt won't get under control if we have a fair monetary system. In fact, since the whole system relies on the scheme it'll just fuck up things even worse.

      What we need to do is fix the economy, and that requires a hell of a lot more spending. That means sucking it up, paying more taxes and flushing out more spending. More specifically, it means closing loopholes, dishing out the estate tax and making income brackets way more hardcore.

    • 1 year ago
  • fun_size
    • 0
      fun_size  
    • Saladin:

      Well put Saladin. Its the stupid partisan bickering keeping everyone distracted while we slip deeper and deeper into debt due to stupid policies that politicians keep pushing on us. If i hear the Republicans bitch about the debt but call for tax cuts one more time im gonna have to smack a bitch!

    • 1 year ago
  • CreditFigaro
  • Dagum
    • 0
      Dagum  
    • CreditFigaro:

      The 20% profits figure comes from the 2.5 trillion dollars of income the federal reserve received for interest payment at a 5% (2008 rate) on the monetized U.S. debt.

      http://www.fms.treas.gov/mts/mts1108.pdf

      of the 2.5 trillion, page five of the monthly treasury statement, the government only received approximately 500 billion on excess treasure profits. Hence the 20%.

      And it would be hard to imagine that it takes $1.5 trillion in pure operating costs to keep the Federal reserve running.

    • 1 year ago
  • JohnA
    • 0
      JohnA  

    • And still you can't get 1% interest on a fucking CD. No wonder no one is spending. Raise the interest rates, we've bailed out all the bad debt, now reward the good. No one is investing because you don't get shit back on your investment. Might as well bury it in the backyard. Companies are sitting on cash. Raise the interest rate!

    • 1 year ago
  • CreditFigaro
    • 0
      CreditFigaro  
    • JohnA:

      I kind of agree with you but disagree at the same time. Raising interest rates has a whole plethora of problems and benefits. Lets say we raise the rates to 4%?

      1) People in the workforce looking to retire would likely retire: if you have a million saved up, would you rather get $10k/year from 1% interest or SURPRISE Fed raises rates to 4% and you are getting $40k/year in interest. I think I'd retire.

      2) provides incentives for companies to continue holding cash. Since the billions of dollars on everyone's balance sheets in cash is now getting 4% instead of 1% in short term investments, a 300% greater return.

      3) People on a fixed income (who bought long-term bonds during this time that had a crappy return) will get fucked bigtime... Sorry grandma, we have an experiment to run!

    • 1 year ago
  • JohnA
    • 0
      JohnA  
    • CreditFigaro:

      Well how the hell is anyone supposed to retire? I've worked hard all my life and I have money saved. So how does anyone make any money? You might as well by lottery tickets as get in the stock market right now. And you don't get shit in interest for your money. So what do you do? Just sit back and watch inflation devalue your savings to nothing? There is no incentive for saving money and planning ahead. I don't want to work until I'm 80.

    • 1 year ago
  • hunzedog
  • oppressed1
  • Incredulous
    • +3
      Incredulous  
    • oppressed1:

      there are lots of people like your dad out there, but I don't think you can beg, buy, borrow or steal the kind of security we are going to need if it does collapse....and then again, there is a part of me that says maybe we will all surprise ourselves and turn into human beings again...

    • 1 year ago
  • telcod
    • +1
      telcod  
    • oppressed1:

      Let's see 4 AR 15 semi auto rifles against a well trained Marine combat platoon. The money is on whom??? Hope your dad has some Afghanistan type mountains and a lot of beef jerky close to that 200 acre spread. Might want him to trade in a couple of AR 15's for a .338 Lapua with a really good scope or convert one of the AR 15's to a .50 cal conversion ........ with a really good scope.

    • 1 year ago
  • oppressed1
  • telcod
  • wally60
  • telcod
  • rodstradamus
  • greendiggler
    • 0
      greendiggler  

    • I think it is disgustingly funny that people blame the "Fed" instead of the greedy, rich, non-tax paying Republicans for the mess we are in. Oh, wait, maybe that explains it ...

    • 1 year ago
  • Dagum
    • +5
      Dagum  
    • greendiggler:

      I dare say that statement demonstrates your ignorance of our economic system. What party sets interest rates? What party is charged with safeguarding our currency and controls the amount of money in circulation? Who has been charged with the task of achieving full employment of America's workers?

      NO party. That job belongs to the extra-constitutional Federal Reserve System. As set out in the federal reserve act of 1913.

      Who thought it would be a good idea to set interest rates ARTIFICIALLY low, to encourage reckless spending on credit, proliferation of bad loans and mortgages, the housing bubble and its subsequent burst, which sent our economy into a tailspin?

      The Chairman of the board of Governors of the Federal Reserve Systems “FED”, Ben Bernake, along with his predecessor. Alan Greenspan.

    • 1 year ago
  • greendiggler
    • -2
      greendiggler  
    • Dagum:

      I dare say your cup of Kool Aid runneth over ... the reason we are in this mess is because the rich, greedy corporate interests that rule this land don't pay there fair share. Period. End of Story.

    • 1 year ago
  • telcod
    • 0
      telcod  
    • greendiggler:

      Was that sardonic?? Fed = greedy, rich, non-tax paying Republicans (and greedy, rich, non-tax paying Democrats). You may have missed the last part.

      Peace be upon you

    • 1 year ago
  • telcod
    • -2
      telcod  
    • Dagum:

      Good for you, but I think "greendiggler" was being facetious. Right, the Federal Reserve is about as Federal as Federal Express. Screw the problem of taxation with out representation, the founding fathers were more pissed that England would not allow the colonies to print their own money. Seems that the Bank of England charged for printing money. Just like the Fed, at interest. Even though they get backed with money, interest free. The Fed, "a private company", controls the money flow, which controls the country, unemployment, commodities and war.

    • 1 year ago
  • Incredulous
  • wally60
    • 0
      wally60  
    • telcod:

      we came to america but we never got rid of the bankers.i think it is time we do so.
      lets just tell them game over we dont owe you squat.they have milked this country
      to long

    • 1 year ago
  • dwb2585
  • PirateSauce
  • telcod
    • 0
      telcod  
    • PirateSauce:

      Been preparing all my life. Thanks for the good advice. This time, I think they went too far. Don't want to have to get to the paint your faces blue and the "Sons of Scotland" Mel Gibson speech. Freedom brother.

    • 1 year ago
  • Sparky2U
  • Sparky2U
    • +4
      Sparky2U  

    • Recession is when a friend is out of a job.
      Depression is when you are out of a job.
      Recovery is when we make sure those that caused this mess are out of jobs.

    • 1 year ago
  • littlwarrior
    • 0
      littlwarrior  
    • Sparky2U:

      I cant believe im about to do this but, I agree we do need to audit the FED, we have a right as taxpayers to know who what when where why and how especially with this kind of money. Oh and i love your horse, makes me miss mine.

    • 1 year ago
  • Sparky2U
  • Incredulous
  • telcod
    • 0
      telcod  

    • The fix is in and you and me brother are powerless. Just like the doomed passengers on the Titanic, it's is shut up and feel the water rise. Remember Katrina? But don't forget to vote. Kinda like the passengers putting on their life jackets for water that was 33 degrees F. My neighbor's dog is looking kinda tasty.

      But, for you happy-go-lucky types in your SUV's, do not ruffle you panties. Just take comfort in the lessons of those happy souls in Stalingrad in 1939, having no clue what life was going to be like in 1943. Could it happen here? Not in the wasteland of the free. Want to bring your dog over for dinner? What you do not know will kill you. It has already killed thousands of others.

      Peace be with you brothers and sisters

    • 1 year ago
  • Incredulous
    • 0
      Incredulous  
    • telcod:

      like don't eat the shellfish because all that oil is still sitting at the bottom of the Gulf, irregardless of what they tell us, the truth is out there, and they got rid of Matt Simmons because he wouldn't shut up and kept telling us they killed the Gulf. Meanwhile, our president tells us its safe to eat the shellfish, kind of reminded me of Bush telling everyone to go out and shop after 9-11.

    • 1 year ago
  • telcod
    • 0
      telcod  
    • Incredulous:

      Good advise on the shell fish. About "go shopping." It's about that consumer economy we have. Probably the only reason we don't bring back slavery here. No buying power. The South still can't wrap its head around that. (Been working for Southern based companies.) Dumb as bricks management. 10 Watt Bulbs. Too small a gene pool.

    • 1 year ago
  • Dagum
    • +3
      Dagum  

    • And they were rewarded with more power in the recently passed financial reform bill. Ben Bernake, the unauditable, unaccountable, unconstitutional, god of our money, will do this country in yet.

      The double dip into a great depression will be coming soon, along with never ending nostalgia of the days when the United States was a first world country.

    • 1 year ago
  • afloyd60
    • +5
      afloyd60  

    • ron paul, peter schiff, and others in the austrian school of economics camp have been sounding the alarm for this collapse for several years. maybe it's time we stopped continuing the destructive keynesian policies of the FED and started to listen to those who correctly predicted our current situation. but, we all know that's not going to happen. our current banking system is designed to keep the common man down while enriching big business and their crony friends in washington.

      END THE FED!!!

    • 1 year ago
  • unimatrix0
    • -2
      unimatrix0  
    • afloyd60:

      Ron Paul is a no-nothing idiot - the fixation on the fed is simple minded magical thinking by those unwilling to embrace the complexities and nuances of the current economic situation.

      It is like using a sledge hammer for brain surgery.

    • 1 year ago
  • dwb2585
    • +2
      dwb2585  
    • unimatrix0:

      Why don't you explain? Is the fed not creating money out of thin air then loaning back to the people? Do they not control inflation? Are they not privatized? Im not saying, "let's go back to Gold standard," but instead a fiat system that works for the people and NOT against them.

      Ron paul may be a "no-nothing" ???? but at least he KNOWS-something about what he talks about and backs it up.

    • 1 year ago
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