Have We Seen This Fed Movie Before?

The bull market snapped back yesterday and prospects for modest economic recovery still look good. But I want to issue a warning or two about the latest policy statement from Bernanke & Company. I am not thrilled about it.

The Federal Reserve is keeping its fed funds target rate down near zero and is talking about adding another $1.5 trillion to its balance sheet through the purchase of mortgage bonds and Treasuries. Now, I don’t care whether those purchases come sooner or later. They represent massive new dollar creation and potential inflation. The Fed is targeting unemployment, not price stability or King Dollar.

Here’s my question: Is the Fed repeating the very same easy-money mistake it made between 2002 and 2005, when it totally bubbled-up and inflated housing, energy, and financial markets, all of which led to a 6 percent inflation rate down the road? Of course, all of that also led to a very deep recession. So color me worried.

Distinguished monetary historian and Fed expert Alan Meltzer from Carnegie Mellon says the Fed needs to wind down the printing of excess cash and balance-sheet expansion in order to stop future inflation. He’s absolutely right.

And even if government health-care control doesn’t pass, it’s bad enough that Uncle Sam is borrowing too much and spending too much. This will slow future prosperity and bias the system toward inflation.

In the short run, excess liquidity from the Fed may be good for stocks. In the longer term, it is not good for stocks, the economy, or your pocketbook.

Your Utility Bills Will Skyrocket

“Under my plan, of a cap and trade system, electricity rates would necessarily skyrocket.”

In this rare moment of candor, this politician, then Senator Obama, provided an honest appraisal of his own philosophy.

“Can you get the American people to say this is really important….that requires mobilizing a citizenry. That requires them understanding what is at stake.”

No, President Obama, our “understanding” is not required. After all, aren’t we all just bumpkins who don’t understand? You, representing the Federal Government, already possess all that is required – the brute force of power. The Federal Government need not mobilize a citizenry as you suggest. The passage of HR 2454 in the USHOR is ample proof. Once the Executive Branch and a narrow majority in House & Senate have conspired behind closed doors to concoct legislation, it can often impose its will upon our entire nation. That’s right, about 279 people pushing an agenda, no matter how corrupt, self-congratulatory, or ill-advised.

Does the USA need an energy policy to insure its national security? Yes. Do we need to be force-fed this “cap and trade” bill? Surely not.

George Washington said it best, “Government is not reason, it is not eloquence. It is force, and like fire, it is a dangerous servant and a fearful master.”

BE A PATRIOT: Are you willing to allow your electricity rates to skyrocket? Are you happy that the U.S. House of Representatives (USHOR) has passed the so-called “Cap and Trade” legislation? Are you pleased that your Representative or his leadership in the House did not even read the approximately 1500 pages of legislation before passing it? It’s not too late to make your voice heard. Call, fax, and email your Senator now. Next, even though the House has voted, let your Representative know how you feel, and require them to pass along your opinion to your Senator. Call your state legislators, call your city and county officials. Make them all hear your voice and heed your words.

Presentation of the Declaration of Independence

Signing of the Declaration of Independence by Jonathan Trumbull

The Words of Ron Paul – Part 1

“Could it all be a bad dream, or a nightmare?” Ron Paul (H-TX) asked. “Is it my imagination, or have we lost our minds? It’s surreal; it’s just not believable. A grand absurdity; a great deception; a delusion of momentous proportions, based on preposterous notions and on ideas whose time should never have come; simplicity grossly distorted and complicated; insanity passed off as logic; grandiose schemes built on falsehoods with the morality of Ponzi and Madoff; evil described as virtue; ignorance pawned off as wisdom; destruction and impoverishment in the name of humanitarianism; violence, the tool of change; preventive wars used as the road to peace; tolerance delivered by government guns; reactionary views in the guise of progress; an empire replacing the republic; slavery sold as liberty; excellence and virtue traded for mediocrity; socialism to save capitalism; a government out of control, unrestrained by the Constitution, the rule of law, or morality; bickering over petty politics as we collapse into chaos; the philosophy that destroys us is not even defined.”

“We have broken from reality,” Mr. Paul continued. “…Money does not grow on trees, nor does prosperity come from a government printing press or escalating deficits. We’re now in the midst of unlimited spending of the people’s money, exorbitant taxation, deficits of trillions of dollars spent on a failed welfare/warfare state; an epidemic of cronyism; unlimited supplies of paper money equated with wealth…”

“Of course, it could all be a bad dream, a nightmare, and that I’m seriously mistaken, overreacting, and that my worries are unfounded. I hope so. But just in case, we ought to prepare ourselves for revolutionary changes in the not-too-distant future.” – May 19, 2009

Excerpted from a column by John McCaslin for The Washington Times Online

The Culpepper Minutemen Flag

The Gadsden Flag

Thank You, Mr. Franklin.

The Betsy Ross Flag

So We Don't Care About Pork?

Senator Chuck Schumer (D-NY) claims that “the American people really don’t care” about the billions of dollars wasted by Congress annually on pork-barrel spending.

We, the 286 million Americans living outside of New York, who didn’t vote for Mr. Schumer, disagree with his mindless chatter. Mr. Schumer, we, the People, DO very much care about your irresponsible borrowing against our children’s futures to fund your profligate pork-barrel spending. In fact, many of us more than just care – we vehemently object.

Perhaps, Mr. Schumer, you should “revise and extend your remarks,” and in the future, speak only on behalf of small minority that actually voted for you. Don’t presume to speak for my family, friends, or the American people.

Listen to Mr. Schumer’s speech, then compare his words to those of Thomas Jefferson:
“I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.”

« Previous Page