The Runaway Money Printing Policy of the Fed(eral Reserve Bank)

Fresh on the Heels of the Government Shutdown and the painful Necessity to raise the Debt Ceiling a surprising but not unexpected Announcement from the Fed, in the waning Days of the Chairmanship of Mr. Bernanke:

http://www.nbcnews.com/business/fed-says-it-will-keep-stimulating-economy-leaves-rates-unchanged-8C11498307

Basically, the Fed, under Mr. Bernanke's Policy of so called „Quantitative Easing” just announced that will be pouring another $ 85 Billion into the Stock Market, buying Bonds, each Month, for the foreseeable Future, until at least March ofr 2014.  This is Money which is not reflected in the Federal Deficit and Money which the Government neither has, nor has authorized through Congress.  The Report further states and we are quoting here,

Wall Street had expected the Fed to refrain from tapering its so-called Money Printing Operation. (Emphasis added).

According, to The New York Times,on the other Hand,

The statement contained no surprises, and the stock market barely budged. The Fed was widely expected to continue adding $85 billion a month to its portfolio of Treasury securities and mortgage-backed securities, particularly in the aftermath of the disruptive partial shutdown of the federal government in the first half of October.

The Fed maintained a relatively optimistic economic outlook in the statement, released after a scheduled two-day meeting of its policy-making committee. It said the economy continued to expand “at a moderate pace” and that the availability of jobs continued to improve.

Now, as Mr. Bernanke prepares to clean up his Desk and leave his Office at the Federal Reserve, the several Trillion Dollars that he has spent, under this ill advised Policy will, of course, remain on the Books backed by Bonds.  What Kind of Bonds?  Goodness only knows.  It will be Mrs. Yellen's Job, presumably, to find out.

This stubborn Policy, pursued by Mr. Bernanke, to „Lift the Economy by the Bootstraps” under some strange Trickle Down Theory strongly reminsicent of „Reaganomics” has been conducted by Mr. Bernanke, if not singlehandedly, because he has had the Concurrence (although not unanimous) of the Federal Reserve Board Members, certainly without the Approval, Appropriation or even Advice of Congress nor that of the President of the United States.

It is true, that the Federal Reserve Board is supposed to function independently.  One wonders aloud, however, if under „independently” the Framers of the Law setting up the Federal Reserve Bank had in mind it spending $ 85 Billion per Month without any Accountability whatsoever.  No such Thing has ever been done by anyone else, anywhere, ever, with the one notable Exception of Vice President Cheney, who spent Billions on the War in Iraq, also without Congressional Approval.

It must be said, in Defense of Mr. Cheney, that the Sums of Money he spent pale in Comparison to the Amounts being spent by Mr. Bernanke.

This is also coming at a Time where incalculable Effort has been spent on showing that there has not been and there is going to be Little if any Inflation in the Consumer Price Index.

It would take too long to fully examine what that Statement is supposed to mean.  However, in Shorthand, it can safely be said that „No Inflation” means „No Inflation” except that certain Things are not to be included in the Equation, to mention a Few, Energy (Fuel and Utilities), Housing, Commodities (Food) plus a Couple of other Things here and there...

Even that Theory, as flawed as it is, has come under Scrutiny by the Mainstream, although many Economists have questioned ist Wisdom for a long Time.

See...

http://www.nytimes.com/2013/10/27/business/economy/in-fed-and-out-many-now-think-inflation-helps.html?nl=todaysheadlines&emc=edit_th_20131027&_r=0


Janet Yellen, the presumptive incoming Chair(wo)man of the Federal Reserves disagrees with Mr. Bernanke and believes that a draconian Control on Inflation (while notably excluding the Categories noted above and more) is not necessarily a beneficial Policy.

But the Consequences will be for her to sort out, once Mr. Bernanke leaves.

We are not sure where Mr. Bernanke is headed; Rumours have persisted and it appears that it is his wish to return to teaching at Princeton University; we simply don't know.  Earlier, we mentioned, we believe more than once, that President Woodrow Wilson (who was also President of his beloved Princeton University), may have rolled in his Grave (more than once) at the Thought of some of the Things that Mr. Bernanke did; to this, we need to add that he surely would have also scratched his head, if he would have been able to.

Be careful what you wish for

We all recall ,,The Arab Spring'' and the Encouragement which was offered, particularly by Secretary of State Hillary R. Clinton to the Forces which toppled Regimes in Tunisia, Egypt and Lybia.  Traditionally, some Long Term Thinking and Analysis of what the Consequences might be when one undertakes a particular Course in Foreign Policy are indispensable.  Many Historians and Political Scientists compare Foreign Policy to a Game of Chess, where thinking several Moves in Advance is essential.

Thus, the Statement reported to have been made today by Egypt's relatively freshly elected President, Mohamed Morsi is quite insightful, we believe:

In a speech that was by turns defensive and conciliatory, he ultimately gave no ground to the critics who now were describing him as a pharaoh, in another echo of the insult once reserved for the deposed president, Hosni Mubarak.

“God’s will and elections made me the captain of this ship,” Mr. Morsi said.

 

(as reported by The New York Times - Emphasis added)

Full Article:

http://www.nytimes.com/2012/11/24/world/middleeast/amid-protest-egypts-leader-defends-his-new-powers.html?nl=todaysheadlines&emc=edit_th_20121124&_r=0
 

 

Traditionally, Secretaries of State have been notably apolitical.  A Secretary of State strived, sometimes more succesfully than at other Times, to further the Interests of the United States to be served for the current and future Administrations, regardless of which Political Party were to come into Power.  Secretaries of State did not harbour Presidental Aspirations.

 

However, all this Amalgamation of Developments in the Middle East already combined with Talk about ,,2016'' and how long Mrs. Clinton will stay on the Job as Secretary of State after having announced her Announcement to leave, for so long and so many Times, might be Ground for one to give thought to the Adage:

 

,,Be careful what you wish for.''

 

To this, we should consider the Thought that Events in Syria and Gaza, not to mention Iran, Iraq, Afghanistan, Pakistan and even Turkey, are still unfolding.

Duel - Obama v. Clinton Teil 2 - Part Two - Deuxième Act

One little Item went nearly unnoticed over the News Wires a few Days ago; Mrs. Clinton said, she would not (Emphasis added) commit to serving as Secretary of State in a Second Obama Administration. For that, obviously, the Implication is that Mr. Obama would be re-elected for a Second Term but, the Implication also is that Mr. Obama would be re-nominated by the Democratic Party for a Second Term; an almost universally shared Assumption. However, one should not assume that almost universally shared means that Mrs. Clinton shares in that Universe. Not too long ago, Mrs. Clinton had also stated in various Interviews that she loves her Job as Secretary of State, that it is such a great Job and that it gives the Opportunity to deal with so many Challenges on the World Stage.

Last Weekend, The New York Times broke with the Story regarding the Rift between 'The White House' and 'The State Department' (on the Issue of the Transition in Egypt, with Mubarak staying Short Term or Longer Term) which, translated into English means, the Rift between President Obama and Mrs. Clinton. There have also been Suggestions that the Leak(s) regarding the Rift came from The White House, which, if true, would absolve Mrs. Clinton of any Attempts to undermine the Authority of the President. Only The New York Times knows that for sure. However, before going too far inside that Suggestion, it might be useful to make a few Observations.

When the Demonstrations in Egypt broke out, the First Hawkish Statements came from Mrs. Clinton herself. In her inimitable Albrightesque-Cojonesque Style, Mrs. Clinton declared, with a menacing Voice, that the Leaders of Egypt (i. e., Mubarak) have no Choice but to listen to the Voices being raised in Tahrir Square. The White House bought into the Argument and, as the Demonstrations proceeded and gained Intensity, Mr. Obama came out on Television and through Statements issued by The White House and his Press Secretary, for a Rapid Transition in Egypt, accusing Mr. Mubarak of not moving fast enough, which of course he was not.

When, for all Intents and Purposes, Mubarak's Fate had been sealed, then the State Department became engaged into an Effort of lobbying for a Longer Transition, with Mubarak continuing to play a Role. That, in Effect, as we say, pulled the Rug from under the White House Statements, or, as I think somebody said way back during the Nixon Administration, left the White House 'twist slowly in the Wind,' without full, active and unqualified Support from The State Department.

Thus, one may ask the Question: 'Why?' One possible Answer is that Mrs. Clinton may be eyeing 2012. Many think that Mrs. Clinton would not attempt such a Thing until 2016. However, Politics today seem to dictate, 'Sooner is better than later,' in every Circumstance except when it comes to Budget Cuts and raising Taxes. Additionally, many of us, including Mrs. Clinton, could not help but notice the meteoric Rise of Sarah Palin who has literally come out of nowhere and who, many think, is going to make a Run for the White House, no matter what. Virgil said, 'Audentes Fortuna juvat.' With a little Bit of Luck, there may even be some Palin v. Bachmann Republican Primaries or even Palin v. Nikki Haley Primaries, in the South. Most astute Observers think that Palin is not very likely to be nominated by the Republican Party and, if she were, she would lose badly against President Obama or, any other possible Democratic Nominees and there aren't that many other 'possible Democratic Nominees' except, of course, for Mrs. Clinton. However, the very Fact of a Palin Candidacy in the Primaries, would raise the Awareness for a Woman Presidential Candidate.

For Mrs. Clinton to make another Run for the Democratic Nomination, the Stars would have to line up not just right, they would have to be perfectly lined up. That would mean, for the Budget, Deficit and Economy Issues to continue to run South; those, Mrs. Clinton knows she has no control over; they are on Automatic Pilot but the Automatic Pilot is steering a Course favourable to Mrs. Clinton; so, a few Foreign Policy Misalignments would not hurt.

Mrs. Clinton received a Total of 18 Million Votes in the last Series of Presidential Primaries; that is a formidable Achievement, particularly because she ran against a formidable Opponent and this Time, if it were that even the Possibility arose, that the First Woman President of the United States could be elected, the prevailing Wisdom would very likely be: No! Not Nikki Haley, not Michelle Bachmann and Heaven forbid Sarah Palin; Clinton!

And President Clinton would no longer have to go to the Pulpit in a Black Church and have to ponder outloud, how to solve the Dilemma of an 'Abundance of Riches' when it comes to making up his Mind regarding who would be the best Presidential Candidate this Time; there would now be only one logical Choice.

Nicollò Macchiavelli's Book, 'Il Principe' may have finally come to deserve a Sequel...'La Principessa.'