Federal Reserve

Ruinous Symbiosis Between Congress And The Fed

by Wolf Richter •  • Comments Off on Ruinous Symbiosis Between Congress And The Fed

The members of the congressional panel on deficit reduction are struggling to come up with something that will—I mean, let’s be realistic—get them reelected and fill their campaign funds. Even if they come up with a plan that will reduce the gargantuan budget deficits, Congress won’t follow through. Because it doesn’t have to, thanks to the Fed.

The Inexplicable American Consumer Strikes Again

by Wolf Richter •  • Comments Off on The Inexplicable American Consumer Strikes Again

Consumer confidence indices have collapsed to levels not seen in years or even decades. Yet the toughest creature out there that no one has yet been able to beat down struck again. Consumer spending increased at an annual rate of 2.4% during the third quarter, though the mood has become outright morose since.

Just Say No, Germany … and Don’t Listen to Geithner

by Wolf Richter •  • Comments Off on Just Say No, Germany … and Don’t Listen to Geithner

The German parliament has a historic opportunity to say no to the bankers: it gets to vote on expanding the European bailout fund to €1 trillion, though it had just been expanded to €440 billion. Since no one has any money, it will be in form of leverage, the very mechanism that has wreaked so much havoc already.

Berlusconi, waiting for money.

The GAO Audit of the Fed Doesn’t Call It ‘Corruption’….

by Wolf Richter •  • Comments Off on The GAO Audit of the Fed Doesn’t Call It ‘Corruption’….

The audit report confirms what we already knew about the financial crisis: during the bailout mania at the Fed, trillions of dollars were handed out based on self-serving interests— “conflicts of interest,” the Government Accountability Office mercifully calls it.

Tough Day For Our Calamity Economy

by Wolf Richter •  • Comments Off on Tough Day For Our Calamity Economy

The ugly numbers speak volumes on how the Fed’s policies hurt the real economy. But those policies enable Congress and the White House to run up ruinous budget deficits that make those of the Eurozone look benign.

That’s inflation—not jobs, wages, or GDP.

The Brutal Trade Deficit

by Wolf Richter •  • Comments Off on The Brutal Trade Deficit

At $46 billion in August and a hair-raising $376 billion year to date, the trade deficit is a powerful descriptor of what’s wrong with the U.S. economy. By year end, it will amount to half a trillion. Economic activity gone overseas. The cause: an ancient and valid business principle that is now harming the overall economy.

Where the Heck is Ron Paul? A Media Boycott Heats Up

by Wolf Richter •  • Comments Off on Where the Heck is Ron Paul? A Media Boycott Heats Up

NPR’s report on tonight’s GOP debate covered about everything you can cover in a few minutes: Palin’s and Christie’s exit from the race; Cain’s from-the-outside strategy; Romney’s 25% ceiling; and Perry’s effort to make up ground he lost in the last three debates. But where the heck is Ron Paul? And it’s not just NPR.

When False Premises Become Economic Policy

by Wolf Richter •  • Comments Off on When False Premises Become Economic Policy

“A shame that we can’t see Japan because of the marine layer” is an old joke in San Francisco. The premise that the fog over the Pacific keeps you from seeing Japan is just as false as the premise that running up huge deficits and printing trillions of dollars can create a healthy economy. Yet, that’s the line propagated by the status-quo media and its economists.

Geithner: The Truth Could Cause Significant Damage

by Wolf Richter •  • Comments Off on Geithner: The Truth Could Cause Significant Damage

During his congressional testimony, Geithner fretted that the crisis in Europe could undermine confidence. Alas, bank stress tests were supposed to inspire confidence—yet one of the “safest” banks just collapsed. If inspiring confidence isn’t based on facts and transparency, it’s a con game.

Deflation In Japan and its Chances in the US

by Wolf Richter •  • Comments Off on Deflation In Japan and its Chances in the US

Deflation phobia broke out again. Fed governor Bullard grumbled about inflation expectations being too low and threatened to print more money, while deflationistas paint the Japanese “deflation spiral” as sheer horror. So here is my experience with that horror.

Alas, in one category, deflation has hounded us for 10 years.