The FED’s Rigged Economy Via QE: A Game of Smoke & Mirrors
Updated: Sep 3, 2021
Recently Wharton Professor Jeremy Sigel predicted live on CNBC that Inflation will spike to 20% in the next two to three years. He used words like “unprecedented” because of the increase in US Money Supply.
The Federal Reserve Bank (FED) keeps printing money (Quantitative Easing) or QE. Actually they don’t even bother to print the money anymore. The FED just adds it to the total economy digitally. So they extend the amount of available money supply theoretically because it’s not ever circulated.
The U.S. federal government cannot raise enough in taxes to pay its bills and it cannot borrow enough money so it resorts to printing money since the U.S. economy is addicted to cash injections (simply because the U.S. economy does not have enough organic growth meaning real growth it needs trickery from the FED to make it appear that it is actually growing). Since February-April 2021 the FED purchased $311 billion of securities (bonds mostly) to “stimulate the economy.”
The FED also dumped a large amount of the money into mortgage-backed securities. Basically ignoring that almost the same processes caused the housing market bubble to burst in 2007. So they're either ignoring the recent past and trying again to see if they achieve different results, or they're buying time to make Biden look good, hoping the bubble doesn't burst in his tenure. Through all of this the FED is essentially ensuring that the “Bubble,” which is getting larger everyday, through all of their artificial manipulation of the U.S. economy will eventually pop and when it does….. Watch out…. The U.S. national debt is now $28.6 trillion. The money supply has increased about 30% alone since April 2020 when the coronavirus pandemic began. Alternatively, the FED could just decide to print and print and print money (like what happened in Germany in the 1920s) and keep dumping the money into the economy to prevent a crash but eventually cause massive devaluation or even a complete collapse of the dollar…. Stay tuned…
For the average American, there is no real economic benefit from the FED’s actions.
Under Obama, between the years of 2008 to 2015 the FEDs total assets ballooned from $900 billion to $4.5 Trillion. Officials give the reason for this as trying to prevent a bad economy from becoming worse. In short they say QE saved the economy, at least in the short term. But the effects on growth and inflation later may be what tell the tale in the long run.
In essence the U.S. economy is running on borrowed time. The country’s money supply was once based on the gold standard. The amount of gold the U.S. treasury had stored backed up every U.S. Dollar. As a result of the Great Depression in 1933 under FDR the U.S. started to move away from the Gold Standard because of the eroding U.S. gold supply, and INFLATION. Decades later the value of the dollar was officially unattached from gold in 1976, ending the gold standard and starting “Fiat money.” Fiat money is basically a form of currency used because a country’s government says it’s what should be accepted as payment. Simply put the USD is not secured by anything other than the government that issued it. The same government that averages about a 20-25% approval rating among the populace. And the FED continues to decrease what that dollar is worth by adding money to the economy and lowering Americans purchasing power for each Dollar. That's why we have so many new "Middle Class Millionaires", because being a Millionaire in today’s economy can be middle class living in some areas of the country simply because each dollar is worth significantly less than it used to be.