The Fed Statement
By Chuck Augustin
3/21/07
Wall Street and the propaganda machine were very pleased with the Fed statement on 21 March – the markets soared as visions of rate cuts triggered euphoria. Meanwhile the market manipulators across the world kept the all-important Yen-Dollar carry trade intact by sitting on the exchange rate. Gold and silver were allowed a token rise by the manipulators, but nothing significant. Goldilocks was raised from the dead and everything in the economy is once again perfect.
I have a different take however – but then again I’m not on their payroll. Wednesday the Fed clearly indicated just how bad the economic data truly is – especially the housing and consumer spending projections. Despite "official" inflation figures well above the Fed’s "comfort levels" and rising, and despite their posturing as inflation fighters, today the Fed removed the tightening bias. That my friends is no reason to pop the champagne corks! Something very bad is brewing for them to do that.
Unfortunately, the return to sanity in lending requirements will negate any positive effect Fed rate cuts will have on the housing market. The problem is that home prices are WAY TOO HIGH in relation to income-to-debt ratios for most Americans. Additionally way too few Americans have any savings they can use for down payments. Fed rate cuts, even if they come true, will not stem the tide in growing unsold home inventories with falling sales prices for a long time to come.
Without home equity extractions, consumer spending is headed down…way down. With the decline in housing and consumer spending, jobs are going to be lost in huge numbers in our service-based economy. The vicious cycle already well underway will soon become very visible to all despite the continued manipulation of data and markets by our elitist, fascist government. Foreign governments already know the situation clearly and will continue to "diversify" out of the dollar. China is now the world leader and will continue to dictate the "terms" of doing business. When it is convenient, the dollar will be allowed to find its true value – worthless. The currency of a bankrupt country is not worth the paper or digits it is printed on.
However, the elites on Wall Street became much richer again today thanks to the Fed – especially the financial sector. Imagine that! Unfortunately, the poor and middle class received another notice today from the Fed that their already deteriorating standards of living is about to sink much further, and soon. Today Bernanke clearly stated that hyperinflation will be next, following closely by depression. I just wonder how comfortable those on Wall Street will be when millions of well-armed, hungry and extremely angry Americans look for someone to blame. Perhaps they will also be able to claim "executive privilege" when we come knocking on the doors of their mansions.
chucka@pahrump.com |
