Wednesday, July 13, 2011

USA is broke. So the Fed will give us money we don't have!

What a freaking joke!

Yesterday Barack Obama said we are dead broke.

It is all George Bush's fault.

And if the mean old congress does not raise his allowance then Social Security checks and payroll for Soldiers fighting in Afghanistan won't be met.

Now, Barry's Boy, Ben Bernanke, says he is ready willing and able to throw more Billions into the wind and into the open arms of the 60% of Americans that pay no taxes.



Bernanke: Fed would supply more stimulus if needed

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke said Wednesday that the central bank is prepared to provide additional stimulus if the current economic lull persists.
Delivering his twice-a-year economic report to Congress, Bernanke laid out three options the central bank would consider. One possibility, he said, was another round of Treasury bond buying. That would make the third such effort since 2009.
Bernanke indicated that the Fed would only take such actions if economic conditions worsened and deflation re-emerged as a threat. Deflation is a destabilizing period of falling prices.
He also said the Fed was nimble enough to respond if the opposite happened. He said the Fed was ready to raise interest rates that have been held at record lows for nearly three years, should the central bank fear a greater risk of inflation.
"We have to keep all options on the table," Bernanke told the House Financial Services Committee on the first of two days of Capitol Hill testimony. "If we get to the point where the recovery is faltering" and inflation is dropping toward zero, then the central bank would consider the additional stimulus options, he said.
Stocks jumped after Bernanke signaled the Fed's willingness to take additional steps boost the sluggish economy. The Dow Jones industrial average rose more than 142 points in midday trading. Broader indexes also increased.
In response to a question about the congressional debate over raising the borrowing limit, Bernanke warned that a failure to act by the August deadline could trigger a major financial crisis. He said that if government defaults on its debt, it would throw "shock waves through the entire financial system."
The government reached its borrowing limit in May. The Treasury Department has said that the government will default on its debt if the limit is not raised by Aug. 2.
The Fed last month agreed to end on schedule its program to boost the economy through the purchase of $600 billion in Treasury bonds. But the central bank acknowledged that the economy had slowed in the first half of the year. As a result, it lowered its economic growth forecast for 2011 and said unemployment wouldn't fall below 8.6 percent this year.
Since that meeting, the government reported a second straight month of dismal hiring in June and the unemployment rate rose to 9.2 percent -- the highest rate this year.
The Fed has said that temporary factors, such as high gas prices and supply chain disruptions caused by the Japan crisis, are partly to blame for the sluggish period.
Bernanke told Congress that the Fed believes those impediments should ease in the second half of the year. But if that forecast proves wrong, he said the Fed is prepared to do more.
"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support," Bernanke said.
Economists noted that Bernanke was careful to balance the possibility of further Fed stimulus with the possibility that inflation could become a problem.
Paul Ashworth, chief U.S. economist at Capital Economics, said the Fed would likely hold off on further steps unless deflation emerges as a threat again. Ashworth said any decision would not come until next year.
"The Fed wants to wait and see if the drop off in economic growth was due to transitory factors and whether inflation drops back," Ashworth said.
The Fed launched its last round of bond buying last when deflation worries were increasing. The bond-buying program, which ended in June, was the Fed's second round of "quantitative easing." That's a term economists use for a tool the Fed can use to drive down long-term interest rates by purchasing Treasury bonds.
The topic of new stimulus was raised at the same June meeting in which Fed policymakers agreed to end the last program. Some members said the Fed should be open to additional measures if growth failed to pick up enough to "meaningfully" reduce the unemployment rate, according to minutes of the June 21-22 meeting.
Others expressed concerns about inflation and said the central bank would need to take steps to begin removing its low-interest rate policies "sooner than currently anticipated."
The minutes highlighted a division at the Fed between officials who are most worried that the economy is growing too slowly, including Bernanke, and some regional bank presidents who are concerned that the Fed's policies could spark high inflation.
Bernanke spoke to the minority's concerns in his testimony. He said that the central bank would be prepared to start raising interest rates faster than currently contemplated, if prices don't moderate.
The Fed has kept its key interest rate at a record low near zero since December 2008. Most private economists believe the Fed will not start raising interest rates until next summer. And some say the Fed won't increase rates until 2013, based on the slumping economy.
Bernanke was testifying after the government released a dismal jobs report last week.
The economy added just 18,000 jobs last month, the fewest in nine months. And the May figures were revised downward to show just 25,000 jobs added -- fewer than half of what was initially reported.
Companies pulled back sharply on hiring after adding an average of 215,000 jobs per month from February through April. The economy typically needs to add 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.

1 comment:

  1. I'm glad I'm not the only one who is having a problem with this....
    I've decided to do the following-

    Biting the bullet - cutting expenses.

    I HOPE YOU WILL PARTICIPATE AND DO YOUR PART

    The President ordered the cabinet to cut $100 million from the $3.5 trillion federal budget.
    I'm so impressed by this sacrifice that I have decided to do the same thing with my personal budget. I spend about $2000 a month on groceries, household expenses, medicine, utilities, etc, but it's time to get out the budget cutting axe, go through my expenses, and cut back.
    I'm going to cut my spending at exactly the same ratio, 1/35,000 of my total budget.
    After doing the math, it looks like instead of spending $2000 a month; I'm going to have to cut that number by six cents. Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about.
    I'll just have to do without some things, that are, frankly, luxuries.
    Did the president actually think no one would do the math.

    ReplyDelete