Wednesday, June 3, 2009

Will Miracles Ever Cease? The Fed Agrees With Me.

Have you ever heard the saying closing the barn door after the horse is already gone? Fed Chief Ben Bernake has come out and stated, "Unless we come out and demonstrate a strong committment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth".

Gee, do you think? I believe that the loose money policies that the Fed has exhibited over the past 10 years have been major contributors to inflating the housing market and promoting sub-prime mortgages. That's why when I hear socialist knuckleheads cast all of the blame on capitalism for our current mess, I roll my eyes. The Fed playing with the money supply and the interest rates, along with a rash of silly government policies to promote and purchase bad loans are not capitalism, but that's another story. The crazy thing here is that I actually agree with the Fed for a change. Even stranger, German Chancellor Angela Merkle weighs in on the same side of the argument (at least that's what the article notes).

The problem is that the more the government borrows, the higher the interest rate that lenders are going to require from us to keep our debt floating. That is because as our debt mounts, the prospect that the US will default or print more money to pay off the debt goes up. That's why nobody is lending to California anymore. When those rates start going up, it costs even more money to make the payments. I can't see how the government gets out of this mess without one of two things happening: 1) Congress reigns in spending; or 2) The Treasury prints up fresh money to pay the debt with. Just typing number 1 made me laugh out loud. Those fools don't have the courage to do what's right. That's why ALL OF THEM nee to be voted out. Option 2 is on the horizon. When that happens, look for the dollars in your hand to be monopoly money and for inflation to run rampant - Citizen Zane

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