Can Ron Paul in his new Congressional chairmanship stop the Fed's QE2 Hail Mary Pass?

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"The dollar will collapse, consumer prices will skyrocket, real credit will completely evaporate, millions more will lose their jobs, and our economy will change in ways few of us can imagine. Our standard of living will plummet and legions of middle- and upper-class Americans will be impoverished. It is not a pretty picture, but unfortunately, it's the one our government is painting. Unfortunately, we are running out of time to change artists."

Read more: http://www.businessinsider.com/the-fed-is-about-to-throw-its-hail-mary-pass-2010-10#ixzz15vQiyXe9

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Type: Question • Score: 3 • Views: 779 • Replies: 11

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@electronicmail,

I know some readers aren't familiar with congressional election results: more info

Quote:

One of the most exciting features of the new Congress is the prospect that the chairmanship of a House subcommittee that oversees the Federal Reserve will go to Ron Paul. Final assignments are still being worked out, and the leadership may yet shy away from giving the position to a congressman who doesn't believe the Fed should exist. But Dr. Paul, an obstetrician, has been the ranking Republican of the Domestic Monetary Policy and Technology subcommittee, and tradition suggests he will be the next chairman.

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interesting, i loved his pocket fisherman

http://www.inc.com/uploaded_files/image/how-i-did-it-78-popeil1-pop_184.jpg

although i hated his son Ayn's books

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@djjd62,

Well thanks I guess that ties in nicely with the soundtrack in this video http://www.youtube.com/watch?v=z87XBKNto4Q&feature=player_embedded The original great depression may be coming back and worse than the first time

Quote:

.. alarming levels -- food stamps now feed a record 43 million -- and warns that the program is the only thing keeping Americans from going "postal."

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@djjd62,

I loved your post, although, even as I am trying to control my laughter, I have to question whether we should be laughing at what might be our own expense.

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@electronicmail,

Quote:

Our standard of living will plummet and legions of middle- and upper-class Americans will be impoverished. It is not a pretty picture, but unfortunately, it's the one our government is painting

Sound like you are giving a history lesson of what had already occur the last time the GOP was in power.

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@electronicmail,

em, The call for "fire" on this issue is the wrong one. These moves by the feds do not occur overnight, but over a much longer time period.

That's not to say that the feds are doing the right thing; they're going to hurt the future economy of the US and the world. Too many countries use the US dollar as their primary (backup) currency.

The reason for this are many which I'll try to identify:
a) there isn't another currency that has much strength such as the Euro. the reasons are obvious; many Euro countries are in bankruptcy.
b) the trade of oil is based on the US dollar
c) there's no present fear that the Yuan is going to take over
d) many bond holders around the world hold US Treasuries
e) many fear the devaluation of the US dollar because 1) their trade surplus with the US will have less value, 2) their own currency will lose value, and 3) the US is still the biggest economy

QE2 is a very bad idea gone amuck; they've lost site of the long-term effects of making such a move. When Greenspan lowered interest rates to increase the availability of the US dollar, it was the basis for what created the balloon we now call the Great Recession. I have criticized Greenspan when he was fed chairman, and many financial pundits believed he was god.

I've criticized Ben Bernanke for many years, and I believe I'm right - and he is wrong.

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@cicerone imposter,

I agree with you. Nobody likes this QE2 except for Obama. He's no economist.

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@electronicmail,

Obama seems to disappoint me at every turn; beginning with his expansion of the war in Afghanistan.

Just out from the WSJ:

Quote:

Criticism Hinders Fed's Easing Plan

BY SUDEEP REDDY

Criticism of the Federal Reserve's latest bond-buying program, both from insiders and from U.S. politicians, is muting the plan's potential benefits for the economy.

Amid widely publicized skepticism about the efficacy and wisdom of the bond buying, investors and traders are questioning whether the Fed would be able to expand its bond purchases beyond $600 billion—even if inflation continues falling and unemployment remains high. Those doubts have contributed to an increase in yields on U.S. Treasury bonds since the Fed announced the program on Nov. 3, they say.

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@electronicmail,

Not just Obama. Berneke likes it too.

To the topic title, though, I think they can run it through before Paul is formally chairman and before the new Congress is sworn in. It's their last chance, and the old Congress can pretty much shut down the government if they want to plant their feet.

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@roger,

QE1 was tried and had no effect on the economy. It was part of the bank bailout. Combined these QEs come close to 2 trillion dollars. Then there's a 1.3 trillion dollar federal government deficit.

Obama is just a politico angling for reelection. He's also a big-government wonk who knows there's no more tax-and-spend without armed revolt and wants to run the printing presses instead. And initiate new black hole entitlements like Obamacare. And thinks the Chinese are idiots who'll keep buying our 30 year bonds forevermore.

Our ship of state is a ship of fools. I hope to God we make it reasonably unscathed till 2012 and throw the bums out. I really worry this QE2 will bring Great Depression 2 instead.

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@electronicmail,

QE1 was a necessary evil to save ours and the world economy. QE2 tries to play games with our economy that doesn't make any sense for the short-term or long-term. It certainly is not going to create jobs. An increase in cash in our economy is not going to automatically create jobs. What it actually does is fuel the bubble in assets without any positive outcome.

If the government wants to create jobs, they can spend money on our infrastructure - even as they create an increase in our national debt, because that will really end up creating more jobs, and an increase in our income tax base that will eventually pay to lessen the debt.

When those infrastructure workers use their income to spend in our economy, demand increases for everybody.

It's a simple idea that most governments fail to understand when our factories are running way below capacity.

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Can Ron Paul in his new Congressional chairmanship stop the Fed's QE2 Hail Mary Pass?

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