Subtle Shift Within Fed Toward Deflation Concerns – NYTimes.com

Starting in 2007, the Fed lowered the benchmark short-term interest rate all the way to zero and pumped some $2 trillion into the economy with an array of emergency loans and purchases of government debts and mortgage bonds.

Those purchases were phased out in March, but there is now talk within the Fed of resuming them. Doing so would further enlarge the central bank’s balance sheet, which has more than doubled, to $2.3 trillion.

To buy all those assets, the Fed essentially printed money — the $1 trillion in reserves. If the reserves were withdrawn and loaned out too quickly, that could trigger a rapid increase in the supply of money in the economy.

via Subtle Shift Within Fed Toward Deflation Concerns – NYTimes.com.

If you can read this article and not be scratching your head and thinking What The Fuck, then you are a better person than I am.

Clearly no one is driving the bus and no one has a map. Seriously, What The Fuck? Is there going to be deflation or inflation? Does it really fucking matter?

There must be inflation in the dark world of denture collectors because some whack job just bought Winston Churchill’s dentures for $23,770. That fucker beat my bid by $70 bucks. I was standing firm at $23,700. That was my top price,  wasn’t going to budge from there. I had to hold my ground. There has to be some limit to what I would pay for a dead fat statesman’s choppers. I simply could not justify anything over $23, 700.  There was a bit of crab cake salad stuck in his left incisor and they were throwing that in for free, but even with that free hunk of Dungeness, I couldn’t go higher.  Fuck I am so pissed I missed out. I promise I will not miss out on Gandhi’s teeth when they go up for auction.They don’t come with free food. The poor guy didn’t eat much.

But back to the Federal Reserve. The Dark Lords are busy trying to come up with a plan to get what little money we have left. My favorite statistic this week is that 83% of all US stocks are in the hands of 1% of the people, if you can call the Dark Lords people. I think they are more reptilian than human, but you know what I mean.

They are in their lairs right now sitting on their heated thrones (reptiles are cold blooded) plotting how they are going to get the other 17% of the stocks. It is driving them crazy that they do not control 100%. Somebody is going to get a beating up in Bohemian Groove this summer.

They have a great plan. It involves disinformation like this article. They will get us to willingly hand over everything we have to save us from the Mad Beast of Inflation or Deflation, or whatever they are calling the Beast this month.

I love the conspiracy theory that the Federal Reserve is owned by a private consortium of banks who are in turn owned by The Brotherhood of Darkness.  And if you follow the conspiracy theory, and I always do because it is much more fun than the so called real story, then the Fed prints money (and by print I mean presses a few buttons on the money tree computer terminal) and they “lend” that money to the US Treasury (which is us, the small people) and collect interest.

Picture me borrowing money from you and then lending it back to you and collecting interest. That is about as simple an explanation as it gets. There is more to it of course but that about sums it up.

I don’t want to get into all the gory details because there are so many other writers who do it already. The explanation is just meant as a reference point.

The other interesting point in the article is that it states that the economic “recovery” may be weakening. The economic recovery? You mean the stock market recovery? Yeah, same thing right? Uh OK I guess, if you are among the 1% of the Dark Lords. For the rest of us 99% the small people, there was no recovery. We have been muddling along listening to this double speak for 2 years. Well 40 years but we can let that slide.

If you know one person who lost their job in the last 2 years who has gotten a job with the same or better pay then you are remarkable lucky. Actually the person you know who got the job is remarkably lucky. For most people the recession will not be over until they find a job. Right now there are 15 million people looking for work.

And why is there is no job recovery? Well check  the article, banks aren’t making loans and companies are sitting on giant piles of money afraid to spend it.

No amount of money flooding the market is going to get spent on job creations. Why? Because corporation’s have suddenly discovered that if you keep your employees in fear of losing their jobs, they will do the work of 2 people for the price of one. The will work like dogs to keep their hovel’s warm or their condo’s from foreclosure. If you were a CEO why would you increase hiring when you could just tug a little harder on the leash? Fear is the ultimate motivator.

When I read these types of articles I try to keep them in context. Alan Greenspan actually said he couldn’t see  the housing bubble although he was the one responsible for creating it. Bernanke said housing prices will never decline across the board. They are both very smart guys who don’t know shit. So take these economists with a grain of salt. They are telling us what they want us to hear, not the truth.

The truth would cause more panic that the asteroid slowly coming to impact the Earth scenario. The truth would sound something like “We built this giant economy and we fucked it up so bad we have to start from scratch.” It is the China Syndrome, a complete meltdown of an economy hijacked by a tiny sliver of the population. That sliver of 1% is holding on for dear life, they will push you down and stand on your head if they think it will keep them from drowning.

Chicken Little may have been right. The sky may be falling, but it is doing it in slow motion.