QE2 used to refer to a luxury liner that sailed the ocean. In today’s world “Quantitative Easing 2” sounds like a euphemism for a bowel movement in a retirement home. Notice that no one has described this easing using the word “Titanic,” or the word “Gigantic.” The first portends an aurora of imminent doom and the latter suggests something that is going to cost a lot, like government health care. The average person has no idea of the financial impact on their wallet. QE2 is just another government program.
The idea that Ben Bernanke can take 20% of everyone’s savings without Congressional approval and spend it on bailouts is to say the least very upsetting. The average guy on the street has no clue as to what the Federal Reserve is doing. Their money is safe in the bank. Ben’s technique is called Inflation. We’ve lived with it all our lives. Nobody loses a dollar on the deal. Your $100 dollars only buys $80 of food after the fact. Debtors love inflation; you borrow real dollars and pay the loan back with cheaper inflated dollars later. Heaven help us if deflation was to creep into the mix—our savings would have more buying power. The biggest debtor that comes to mind is the US government ---HMMMM
The average worker making 40k a year, still gets 40K, but after QE2 it will only buy 32K of goods and services. The worker hasn’t seen the hand of the government messing with his pay check, but the price of everything went up. The bank depositor is a babe in Toyland. Oblivious to what is going on behind the curtain. The worker that saved up one million dollars now only has the buying power of 800K and he's clueless until he tries to spend it. Of course, the person without a dime to his name has lost nothing.
Add up the taxes, Social Security, Health Care, Federal tax, State tax, gas tax and sales tax. These are all visible. Then there is the dirty little Ben Bernanke tax (It’s not a tax, they are going to pay it all back—Guffaw, Guffaw).
The Federal Reserve's powers need to be curtailed. This institution was not created to perform the functions it is now exercising. Bernanke has been delegated tremendous power over our financial system without any Congressional say so. He needs to be reigned in and throttled down or maybe just throttled and fired.
Of course, between Obamas health care and Bernanke's bailout we have a plan that works only because nobody has to pay for it. This must be heaven. I'm sure this will become even more plausible after consuming a 12 pack of beer.
Copyright 2010 All rights reserved