What does the Federal Reserve QE3 mean for main street?
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The Federal Reserve announced QE3 last Friday September 14th, 2012 indicating that it would do another round of "quantitative easing" amounting to buying 40 billion dollars a month of mortgage-backed securities for an indefinite period of time and that it would keep interest rates low or even zero until 2015.
The average American's eyes glaze over at this kind of financial news and most do not comprehend its import.
The press treats it as a political issue between Republicans who claim that printing 40 billion a month will create inflation and the Democrats are portrayed as liking it because all that money might help Barack Obama get re-elected.
Neither of these notions is accurate.
The stock market went up because the monied classes knew the truth-the money was coming to the wealthy, to wall street, not main street. It is another bailout for the banks, disguised as "helping the economy, and loaning money to the government."
This is not accurate.
The Federal Reserve IS the big banks giving themselves free money (zero percent interest) which they then use to further indebt the US government and having us the US taxpayers pay the bill for increases in the national debt. This is a crazy round robin scam that has gone on for years. On top of this the stocks of their various banks go way up, the corporation’s stock go way up, and in fact what has happened is that the banks have used tax payer money, once again to pay off their toxic derivative gambling debts. This sleight of hand maneuver has been done over and over again in many different ways, but done by way of this "quantitative easing" there is no public outcry because most do not understand what it means.
A second fault line here is that this "easing" tactic means that the banks are getting free almost zero interest money which they voted themselves as Federal Reserve Directors, money they will use to speculate in the derivatives and commodity (food and fuel) markets as they have been doing for years. Nothing has changed except, we the American taxpayers have given them now, via this "easing," unlimited free money-our money to play with.
It will bring down the world economy and the banks will have cornered the market on virtually all of the dollars in the world economy leaving the middle class broke, dependent and with homes or other assets devalued-this while prices of stocks, fuel, food all will go up because these bank speculators and private equity firms will be bidding those prices up with money they got from us-beyond what we can afford.
It is a plan which brings us back to a feudalist state of affairs.
This is horrible and shameful.
Notice this is QE3. QE2 and QE1 had the same effect which is why we are in the world wide financial mess we are in.
The same is true in other countries as well. In England for example:
"A recent CNBC article discussed a very interesting report from the Bank of England about the effects of quantitative easing....
It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.
Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.
Many said the BOE's easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it."
Moreover retires will be especially hurt by zero interest rates. Their retirement plans assumed at least 5% interest rates; they get zero and most will not be able to retire and their houses have lost value and their credit cards have zeroed out and they have to sell or give their houses back to the banks for pennies on the dollar. This is a plan, not an accident.
In addition, the policy of the Federal Reserve of keeping interest rates as low as possible is absolutely crippling the finances of many retirees. Even the former president of the Federal Reserve Bank of Atlanta, William F. Ford, recognizes this....
One of the overlooked consequences of the Federal Reserve’s recent rounds of monetary stimulus is the adverse impact those policies have had on the interest income of savers. The prolonged and abnormally low interest-rate structure put in place by the Fed has made life particularly difficult for retirees and others who depend on conservative interest-sensitive investments. But the negative effects do not stop there. They spillover into the overall performance of the economy.