The Fed’s Fountain Will Foam Forever Or Until Gotterdamerung Or Something?

Drowning in MoneyGenerally, whatever is the subject, it seems that investment adviser Marc Faber is against it. His glass is never full and usually more than half empty. That said, his prediction that the Fed’s ‘insane’ money manufacturing will be endless has a lot of sense to it. When outgoing Fed Chairman Bernanke recently hinted at the start of a ‘taper’ –Fedspeak for a long, slow and gradual stop to said money manufacturing– the stock market reacted like a skittish horse seeing a rattlesnake. Bernanke even had to cast oilyspeaking retreat upon the roiled financial waters.

Congress is too addicted to spending the funny money the Fed produces first and second, does not want to be seen bringing the economy down to the grinding halt so far held off by the deluge of Fed-originated spending. Nor does any Fed Chairman or now with Janet Yellen replacing Bernanke–Chairlady. Who will tell Janet to Just Say No? So Faber predicts that the $85 B monthly of Fed funding of both the Federal Treasury and the mortgage markets, will continue. Given what passes these days for political courage, his is likely correct. Would you want to be the guy who threw millions into breadlines and soup kitchens while being advertised as the reason for the lack of bread and soup?

So the Democrats and Republicans seem likely to continue playing musical economic chairs with the U.S. citizens, knowing that when the music finally stops, their chairs will be available to them, already funded by those same citizens, who will then have nowhere left to sit. And a lot of them, scratching for much to eat.

The Fed, in Dr. Faber’s view, may –or not– pretend to restrain the overspending but it in fact, won’t. That is not supposed to be inflationary and the government reports little inflation, never mind that a pound of ground beef now sells at a record price. So what? Everybody working for government is getting raises from the taxpayers and our compassionate leaders are talking up a raise in the minimum wage for them. After all, the Fed can just print up the money… Dr. Faber, an attache’ of the gnomes of Zurich, is known for doom, gloom–and often, being correct. Whoopee…


About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much) Couple of degrees in government, a few medals in figure skating; just reading and suspicion for economics ...
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