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GDP down, let’s print more money…

January 30, 2013

Today’s GDP number came out on the negative end at -.1% . All the “experts” were shocked because  the Fed had been stimulating the economy. In fact, look at how much growth was created by “money printing” and “deficit spending”. Imagine you ever ran a business with that kind of return on capital…

gdp

As I have said before and the evidence shows again and again, printing money has never solved a country’s economic problems. If it could solve economic problems, we should all just wait at home for the next government check and forget about working. In reality, all “QE” does is “transfer” wealth from the cash holder to the entity that receives the magic new money. I have explained before how the large financial institutions and corporations benefit but I want to quickly illustrate the madness of the Fed buying Treasuries.

As of now, the Federal Reserve creates money on a computer screen, then pays primary dealers(large banks) hefty commissions to buy Treasuries. The artificially depressed interest payment from the Treasury to the Federal Reserve is then hailed as a gain by the Federal Reserve. After that, the Federal Reserve remits the interest payment back to the Treasury as the Fed cannot make a profit. We are then told that both the Fed and the Treasury function in harmony. After all, the Treasury borrowed money for nothing and the Fed claimed to have made a profit for the country. Needless to say, this is absolute lunacy and will be terminated by the markets if we don’t end it ourselves…

 

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26 Comments
  1. Der Lord permalink

    Hi Richi! Das heißt ja vereinfacht gesagt, dass einfach zu wenig neue Schulden gemacht wurden – und zwar um mindestens 5 Milliarden Dollar ;)
    Christoph

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