drschoon.com / By Darryl Robert Schoon / December 19, 2012
GUNS, GLOBAL WARMING & PRINTING MONEY
Erroneously believing themselves the cause of their good fortune, Americans continue to deny a changing world
In 2006, when I began writing my book on the coming economic collapse, I didn’t know what the Fed would do regarding liquidity. At the time, whether the Fed would raise or lower interest rates was a soon-to-be multi-trillion dollar question.
In the past, central banks walked a tightrope between higher and lower interest rates. Raise rates too high and economies would slow and/or contract. Keep rates are too low and inflation would result.
Today, the central bankers’ monetary tightrope has become a gangplank.
On December 12th, Fed Chairmen Ben Bernanke announced the Fed would be doubling down on its bond buying program. Ostensibly in order to create more jobs, the Fed would now buy an additional $45 billion a month of US debt.
The bond buying announced today will be in addition to $40 billion a month of existing mortgage-debt purchases. The FOMC said asset buying will continue “if the outlook for the labor market does not improve substantially” and hasn’t set a limit on the program’s size or duration.
The reason for the Fed’s accelerated bond buying has only a tenuous connection with the US labor market. The real reason is that unless the Fed is the dominant buyer of US debt—which it now is—market forces (remember those?) would cause US interest rates to rise, eventually bankrupting the US Treasury.
RUNNING THE PRESSES
More and more central banks are opting for the endgame ‘solution’, a fatal descent into ‘monetary easing’, i.e. today’s laundered term for running the printing presses. The Swiss National Bank, the European Central Bank, the Bank of England and the Bank of Japan have all joined the Fed in money printing hoping desperately to save their ponzi-scheme of credit and debt.