The Economics of "Change"

Ok so we've obviously seen that Obamacare has raised health care costs... Obama also said that under his energy plan electricity rates would skyrocket... Food prices are nearing record highs... And he wants you to believe that minimum wage is the problem...

Well over here in reality, it is not hard to see the cause and effect between the Fed dumping gigantic amounts of cash into circulation, and that cash therefore being worth less overall...

If income inequality really is the biggest problem, why is Obama ensuring that only the top 0.01% benefit most from all of the Quantitative Easing?

The real 800 pound gorilla in the room is fascism. Don't be misled, this is not the same outwardly overt, "Kill all the Jews" style fascism that our grandparents fought in Europe. This is a slow, creeping, "under your nose" kind of fascism. However, it still holds true to Mussolini's definition: "The merger of State and Corporate powers"

Greenspan told you as much, he stated that "There is no other agency of government that can overrule actions taken by the Federal Reserve". Combine that with the fact that the Federal Reserve is nothing more than a revolving door for the heads of the 6 Mega Banks, who ensure that their board members end up on the Fed's board with the express mission of protecting the interests of the Mega Banks. Is the picture a little clearer? 
As much as the left loves painting the free market capitalist system as only leading to the Bernie Madoffs of the world, in reality it is the moves we've made away from capitalist principles which have done the worst damage.

Although the Federal Reserve has been causing havoc in the economy for the past 100 years, up through even Reagan we still had some protections in place keeping us on the right side of capitalism. There is much more to be learned about the Fed itself, and I would point you toward the book: "The Creature from Jekyll Island" by G. Edward Griffin

As the end of the 20th century approached, the rhetoric of the day moved toward terms like "modernization". It was all too easy of a scapegoat. "To remain competitive in the coming century, we must adjust our laws to align with global standards" which really meant "Give the banks unprecedented power and access create and manipulate markets, and in turn the banks will ensure that the politicians will be set for life"

Enter what Max Keiser so eloquently calls "The Casino Gulag". Part of this "modernization" was to repeal a law known as Glass-Stegall. Basically this law kept commercial banking (i.e. loans, savings, checking, etc.) separate from investment banking (i.e. Stocks, Bonds, Commodities, etc)

This change in law allowed for all of the shady dealings that caused the crash of '08 to take place. This stuff makes "The Wolf of Wall Street" look like a boy scout by comparison. Market manipulation, price fixing, interest rate rigging, "special investment vehicles"... All things these bankers knew that the general public couldn't even begin to fathom. They also knew that if it all came crashing down, that they would have already made their fortunes and would be set up in offshore tax havens.

Even when it did finally crash, all of the big time players just hid behind scary terminology like "too big to fail". The regulators and the DOJ were scared to death to try and prosecute any of this. Partially because everyone was screaming that if you arrest the bankers, you take down the entire global economy, and partially because the changes in law had moved all of this malfeasance into a legally gray area that would have been tough to prosecute. Mainly because it would be impossible to get a jury to understand what the banks were doing, let alone explain exactly how it was illegal.

So along came Obama. His "Hope and Change" platform swept him into office like few before him. But while the average voter heard "Hope and Change", some of us saw that he was ultimately just another puppet. However, a much more dangerous puppet than anyone before because he was able to be a front man for the banks and the status quo, while publicly grandstanding as a "man of the people", and the people bought it. Hook. Line. Sinker.

So now we come full circle back to the question of the Fed and QE. Obama started his attempt at economic recovery with "stimulus packages". Later it became apparent that the jig was up, and no other countries were going to buy our bonds and perpetuate this nonsense.  So the Fed decided to just flip on the printing press, and leave it on. This has continued with next to zero press coverage to the point where the Fed now owns more of our country's debt than anyone else.

Presumably, the Fed intends to sell the government bonds they bought up at a premium, and actually make money in the process. Unfortunately the dirty little secret is that nobody wants to buy them, and probably never will.

This has led to the conundrum we find ourselves in today. The Fed keeps claiming they want to "Taper" or slowly stop buying the $85 Billion in bonds every month, but every time they even hint about it, the markets tank by a couple percentage points.

The market has become addicted to this Quatntitative "heroin". Every month, more money is printed, and our dollar becomes worth less. This doesn't effect the rich, as they have millions to spare. But when a dollar won't buy as much as it did last month, it always hurts those who only have a dollar to spend.

The public at large loves to jump at the idea of "free stuff" (healthcare, food stamps, unemployment, higher minimum wage, etc), but they fail to realize that each time one of those programs expands the printing press is fired up, the value of the dollar sinks, purchasing power is lost, and the cycle is perpetuated.

So we see how the status quo is stacked to keep itself, and there will never be any kind of real substantive progress unless we make real moves to reign in the "Casino Gulag" and take steps back towards a true free market system.