The US post office is now TRACKING the SDR's created by IMF to potentially replace US dollar as worlds reserve currency........COM'ON MAN!!! :eek: These FACTS sure go right over your head......sheeesh!
Ok I will humour you one last time, if you dont give me atleast a well thought out response then after this im done. How exactly, (and i want precise details) is the fed responsible for the governments ridiculous spending?
While you wait on his reply, please google something along the lines of "government expenditures as percent of GDP".
Because the FED monetizes a significant portion of debt, which keeps rates artificially low, which allows the Government to borrow on the cheap. If the FED did not buy Government debt, borrowing costs would be much higher and consume an untenable portion of the budget. Therefore, the Government would be forced to borrow much less, as it simply couldn't afford to carry the current debtload at market prices. Congress is a heroine addict. The FED is their drug dealer. IOW, the FED enables unsustainable deficits through monetization. Bernacke blames Congress and Congress blames the FED. They are both to blame. And they are both lying. And they both know it. It's a big game. A joke.
Again, i will ask, Who is responsible for this? Is it the feds fault that the government over spends and borrows money? The fed has absolutely zero control over the amount the government spends per year. When the fed jacked interest rates to 20% in the 80's, do you then credit the fed for the balanced budgets in the 90's? If the feds interest rates are responsible for government spending, why doesnt the chinese government rack up excessive credit? I fully agree that the fed has crushed our dollar, but that is based on an idiotic thought process by them that if we kill the U.S.D. enough we can compete with the third world exports, this is bad policy, not a conspiracy. Banks can give all the cheap credit they want, the bottom line is that no one besides the debtor can choose to borrow based on the feds rates, so it isnt some giant conspiracy by banks, that forces people to do this, businesses/people do it based on their own stupidity.
+1 The Fed "creates" the money the gov't wants to spend. In the case of low interest rates, the big banks "borrow" cheap and buy Treasuries, giving the gov't the money it wants while banks get their free money off the interest paid after the gov't taxes the citizens to get it. The gov't gets a good deal because it has the full purchasing power of the money because it is not inflationary yet - the gov't gets to spend it first. Then as it ripples throughout the economy, it becomes inflationary and buys less. The people at the lowest economic rung get screwed the worst, since inflation is basically a regressive tax on them. But the gov't and the banks make out pretty good - for just making an accounting entry.
If a good looking prostitute walks into the street and says anyone can screw her for a dollar, and a guy takes her up on the proposition and gets busted by the cops, is it the guys fault, or the prostitutes? If I go to McDonalds every day and buy a bunch of 1 dollar cheeseburgers and i become morbidly obese, is it my fault or McDonalds? If i go to a bar that is serving beer for a dollar, and i roll my car on the way home after drinking a keg, is it my fault, or the bars? The person who makes the ultimate decision in every single case is the consumer.