http://www.americanbreakingpoint.com/personal-risk/another-round-of-the-same.html?cc=eletter&ct=ABP20120611A&cs=cgrk&sid=IQ7136&en=4362824

Another Round of the Same

by Charles Goyette | Jun 11th 2012

We are 54 months into the central banking economic calamity in which the Fed moved heaven and earth to artificially push down interest rates and inflate the housing bubble.

So let's take a look at what the authorities have done to fix this problem, which is, so far, a problem of their own making.

The Federal Reserve has purchased about $2 trillion in bonds, toxic securities from the private banks and U.S. government debt. The Fed is the largest purchaser of U.S. Treasuries, all with money that it simply created out of nothing - conjured up with smoke and mirrors.

Thanks to the Republicans and Democrats, we have hundreds of billions of dollars in congressionally-appropriated bailouts and stimulus packages. The Fed has played around with a yield curve and operation twist. We have had quantitative easing, both QE1 and QE2. The Fed created trillions behind the curtain in bailout credits for foreign banks and foreign companies. The Fed has created penury for people on fixed incomes who can't get meaningful returns on their meager savings without taking extraordinary risks. Savers who are just the remedy for what we need in a time of overwhelming debt, in that they have savings, are discouraged from saving by deliberate Fed policy.

Europe too has followed the same path, with two trillion euro in bailouts and central bank bond purchases. Governments buried in debts they already can't serve are encouraged by Keynesian economists like former treasury secretary, Larry Summers, to borrow more. And they do. It has been one statist master plan after another: Liquidity operations, stimulus packages, deficit accommodating, quantitative easing, bailouts.

We've let the states subvert the most basic principles of the capital markets, like the brazen robbery of GM bond holders.

Meanwhile, another federal government-inspired bubble, the $1 trillion student loan bubble, is popping just as the Fed's housing bubble and the dot.com bubbles popped.

Having been lead down this primrose path in which the only ones profiting are the bailed-out investment banks on Wall Street, what should the monetary and fiscal authorities be doing?

Another round of quantitative easing, QE3?

More interest rate machinations?

More operation twists?

More spending of bigger deficits?

$16 trillion not enough for you?

Do I hear $20 trillion?

More of what they've already been doing: More bailouts, more stimulus spending, more Solyndras, more crony capitalism, more tax money for the IMF to give to the ECB so that it can give it to debtors in Greece and Spain who then can turn around and give it back to the banksters?

More of all the things that haven't worked all along.

We would be better off they covered themselves in berry juice and danced around in the moonlight. It would do just as much good and a lot less harm. Instead, the debts get bigger, the world economy stumbles. British debt (like American debt) has now been downgraded. Japan's DK index just hit a 28-year low. China is turning south. Brazil has gone soft. Europe is in a state of panic, and the latest numbers confirm that the United States still has depression-era levels of unemployment.

We are 54 months into this calamity, and things keep spinning down the drain. So far, nobody in authority has thought to take any advice from the people who saw the problem while it was in the making. Instead America is gearing up once again to choose between one of the two wings of the Washington party that conspired to get us into this mess, and whose remedies have made things worse, adding mountains of more debt to a problem that was caused by too much debt.

No matter how the people choose in November, the buffoons who marched us into the swamp will remain in charge. Maybe Menken was right when he said that democracy is the theory that the common people know what they want and they deserve to get it, good and hard.