Bernake trying to keep his and obama's jobs
The donut senario is interesting and could be yummy if not more expensive as the
finite number of donuts dwindles and the cost rises as those who own the
remaining donuts realize the supply is not keeping up with demand. Rising prices
equals inflation: Indirect tax the government is getting away with now because
it is being imposed by businesses in goods cost.More direct to
reality: QE 1, 2 and 3 have led to higher gas prices. In the past 4 years the
value of the dollar has decreased giving it less buying power as there are too
many flooding the world markets. That is in great measure why our gasoline
prices have gone from $1.84a gallon to over 4.00 dollars. Federal Reserve
policy devalues the dollar but our major oil suppliers realize the dollar is
cheaper so they want more dollars for the oil. Food producers want more for the
food we eat. For food and energy inflation is a substancial factor in family
budgets and those budgets are getting hit hard. But the Federal Government
measures core inflation minus food and energy! Do you wonder why? To hide the
hidden tax crushing the middle class!
Gross oversimplification of economics. Inflation is near 2%, M1 has been
decreasing and reserves at the fed are at all time highs, neither of which has
caused oil prices to dramatically increase, the instability in the middle east
and the increasing demand for oil in developing nations are the root cause of
increasing costs in oil.
Quantitative easing is ongoing at the rate of $40 billion a month for as long as
it takes. Most people have probably forgotten Bernanke announcing this policy
last month. The Fed is using the money to buy bad mortgages so the banks can
remove them from their books. Bernanke says it is so that interest rates will
stay low. Doesn't matter that rates are low, banks are not lending. An
economy thrives on the flow of money. They should have let all the over
leveraged banks fail and pumped all the tarp money into the solvent banks with
the stipulation that they loan it, putting it into circulation. The tarp money
was used to cover bank debts and so was never put into circulation. The Board
Members of the Fed is all the bankers from the over leveraged banks, so no
surprise. The too big to fail banks are bigger and still at their old tricks.
The day of real reckoning is yet to come.