We've Yet to Witness the Fed's Greatest Failure

June 15, 2011

With the economic numbers getting worse and worse in the US, it's clear that the Fed's policies thus far have ended in abysmal failure. Indeed, I really can't see how anyone could have argued the US had experienced a recovery to begin with.

• 15 million jobs have been lost since 2007.
• Food stamp usage is up 57% since 2007.
• Over one in five US mortgages is underwater.

Seeing as the Fed's policies were supposed to help US consumers (we all know their real purpose: Wall Street bonuses), I cannot see how the above numbers indicate success of any kind.

Indeed, the other effects of the Fed's moves have made an already difficult economic situation far, far worse by pushing the price of food and energy through the roof. Thus most in the US now find themselves facing stagflation in a big way.

However, the Fed is far too myopic in its belief system to possibly consider not printing more money. After all, from the end of QE 1 (April 2010) until the unveiling of QE lite (August 2010), the Fed continued to juice the market every month, particularly during options expiration weeks.

So the Fed will be juicing the system again at some point in the future. It's all the Fed knows how to do. And it's all the Fed has done since the Crisis began in 2007. Indeed, the Fed has completely and utterly failed to address ANY of the causes of the Financial Crisis.

Yet, for the Fed the failure to address any of the underlying causes of the Financial Crisis has been a great success story. After all, all it had to do was pump the financial system full of more money (increasing the amount of leverage) and push for the suspension of accounting standards (so the crap debt is still there, but no longer is visible).

So what do we have? A financial system where the underlying problems still exist and the Fed's simply pumped TRILLIONS into the banks, resulting in commodities soaring, the US Dollar tanking, and investors taking on even more leverage.

Since 2009, I've been warning that the Financial Crisis is not over and that the next round will be even worse than the first. THIS is the REAL problem every one should be preparing for... not just a minor correction in stocks or the end of QE 2. Because at some point, the Fed WILL lose control of the system again. And this time it will be COMPLETELY powerless to re-instill confidence (the Fed's already spent all of its bullets during Round One).

Comment:

Now comrades, when the Federal Reserve keeps printing millions and millions of dollars, it cause what? If you said inflation, you get a gold star (better hang on to it, you may need it to buy groceries soon enough). That's their answer to our money problems: Just print more of it - even though it's illegal for them to do so. The constitution plainly says that only Congress shall have this power. It says nothing about contracting it out to a private corporation, which is what the Fed is - a private corporation, NOT a branch of the government.

If the Fed keeps this kind of nonsense up, eventually it will take a wheelbarrow full of cash just to buy a loaf of bread. Far-fetched? Not at all. It's happened before. It happened in the Wiemar Republic. It happened right here in the United States. That was the problem during the Great Depression. Our money was virtually worthless, and we're heading that way once again.

It all makes sense if you realise that money is nothing more than a piece of paper. It costs exactly the same amount to print a one dollar bill, as it does to print a one hundred dollar bill. Money is only of value because one, it is backed by the government as legal tender, and two, because it is limited in amount. Consider this: Why is gold worth so much? After all, it's only metal, just like iron, or aluminum. What makes it so valuable? Because everyone wants it? Why does everyone want it? Because it's so valuable, and it's so valuable because the amount available is finite. If someone struck gold tomorrow, and it was a major strike, bringing up hundreds of pounds, then the price would drop because it wouldn't be quite as rare. The rarer something is, the more valuable it is. The more there is, the less its value. It's the same with currency.

In Zimbabwe, they print money freely. It's so worthless, you could use it for toilet paper. Make no mistake, if the Fed keeps this up, we'll be in the same boat. I doubt things will get that bad, but you never can tell. And even if they don't let things get that bad, as bad as things are, just how much farther will they let things go? We may not have all that long to wait.

The ANP has an excellent booklet about the Federal Reserve system. It covers its history, how it works, and just how technically ILLEGAL the whole system is. It covers too much to post here, but if you email HQ, I'm sure for a small donation they'd be happy to send you one. I'd send for one. It's a real eye opener.

Comrades, the ANP is the best solution to this ever increasing problem. There are some groups who waste their time on useless protests and demonstrations that fall on deaf ears, and provide great ratings for the Jews Media. Other groups are waiting for the day when the White man will rise up, grab his gun, and take back his country. Please. The way the sheeple have been conditioned, do you really think there's a chance of that happening and us winning? Not bloody likely. Then there's other groups who just sit behind their computers doing cyber-activism. Well, that has its place, but it isn't enough. The ANP does BOTH. Plus we are now politically active.

I'd like to remind you that the Fuhrer tried a violent revolution. He got a prison sentence for his troubles. In the end, he succeeded through politics. That means elections. At first, the NSDAP lost. Then, little by little they started winning, until the time came when the Fuhrer was appointed Chancellor, and the NSDAP was the second largest party in Germany.

It can happen here too. But only if we ALL work together and do our parts. For example, spring isn't over for another five days. That means Spring Blitz is still going on. Let's get out that literature. I'll be making one last effort before summer begins. For security reasons, I won't say exactly when, but soon.

Even after spring, we should still get our regular amount of literature out. Talk to people, and I don't mean beer talk in bars. People love to sound off when they've had a few, but rarely follow through when they sober up. Keep trying to recruit. Nothing ventured, nothing gained. But remember everyone, never trust a stranger with sensitive information, like names of other Supporters. Let them send in their applications and pledges, do a little work for us, then we'll see how much they can be trusted. Trust is earned, never given. For example, when I returned to the ANP, I'm sure there were eyes on me until they felt I could be trusted. Under the circumstances, it was a sensible precaution.

But anyway, even though people like to have fun in the summer, we still have keep up our work. That especially goes for those of you who live in climates with a much harsher winter. A lot of the time you can't get out to do your activism because of the weather. Now that it has warmed up (an understatement for you Eastern Comrades with the current heat wave you're going through), we must get to work. Not that there isn't time to play, but we must make time for our work as well.

Proper management of our time will leave us plenty of room for our jobs, activism, AND some summer fun.

We've Yet to Witness the Fed's Greatest Failure

June 15, 2011

With the economic numbers getting worse and worse in the US, it's clear that the Fed's policies thus far have ended in abysmal failure. Indeed, I really can't see how anyone could have argued the US had experienced a recovery to begin with.

• 15 million jobs have been lost since 2007.
• Food stamp usage is up 57% since 2007.
• Over one in five US mortgages is underwater.

Seeing as the Fed's policies were supposed to help US consumers (we all know their real purpose: Wall Street bonuses), I cannot see how the above numbers indicate success of any kind.

Indeed, the other effects of the Fed's moves have made an already difficult economic situation far, far worse by pushing the price of food and energy through the roof. Thus most in the US now find themselves facing stagflation in a big way.

However, the Fed is far too myopic in its belief system to possibly consider not printing more money. After all, from the end of QE 1 (April 2010) until the unveiling of QE lite (August 2010), the Fed continued to juice the market every month, particularly during options expiration weeks.

So the Fed will be juicing the system again at some point in the future. It's all the Fed knows how to do. And it's all the Fed has done since the Crisis began in 2007. Indeed, the Fed has completely and utterly failed to address ANY of the causes of the Financial Crisis.

Yet, for the Fed the failure to address any of the underlying causes of the Financial Crisis has been a great success story. After all, all it had to do was pump the financial system full of more money (increasing the amount of leverage) and push for the suspension of accounting standards (so the crap debt is still there, but no longer is visible).

So what do we have? A financial system where the underlying problems still exist and the Fed's simply pumped TRILLIONS into the banks, resulting in commodities soaring, the US Dollar tanking, and investors taking on even more leverage.

Since 2009, I've been warning that the Financial Crisis is not over and that the next round will be even worse than the first. THIS is the REAL problem every one should be preparing for... not just a minor correction in stocks or the end of QE 2. Because at some point, the Fed WILL lose control of the system again. And this time it will be COMPLETELY powerless to re-instill confidence (the Fed's already spent all of its bullets during Round One).

Comment:

Now comrades, when the Federal Reserve keeps printing millions and millions of dollars, it cause what? If you said inflation, you get a gold star (better hang on to it, you may need it to buy groceries soon enough). That's their answer to our money problems: Just print more of it - even though it's illegal for them to do so. The constitution plainly says that only Congress shall have this power. It says nothing about contracting it out to a private corporation, which is what the Fed is - a private corporation, NOT a branch of the government.

If the Fed keeps this kind of nonsense up, eventually it will take a wheelbarrow full of cash just to buy a loaf of bread. Far-fetched? Not at all. It's happened before. It happened in the Wiemar Republic. It happened right here in the United States. That was the problem during the Great Depression. Our money was virtually worthless, and we're heading that way once again.

It all makes sense if you realise that money is nothing more than a piece of paper. It costs exactly the same amount to print a one dollar bill, as it does to print a one hundred dollar bill. Money is only of value because one, it is backed by the government as legal tender, and two, because it is limited in amount. Consider this: Why is gold worth so much? After all, it's only metal, just like iron, or aluminum. What makes it so valuable? Because everyone wants it? Why does everyone want it? Because it's so valuable, and it's so valuable because the amount available is finite. If someone struck gold tomorrow, and it was a major strike, bringing up hundreds of pounds, then the price would drop because it wouldn't be quite as rare. The rarer something is, the more valuable it is. The more there is, the less its value. It's the same with currency.

In Zimbabwe, they print money freely. It's so worthless, you could use it for toilet paper. Make no mistake, if the Fed keeps this up, we'll be in the same boat. I doubt things will get that bad, but you never can tell. And even if they don't let things get that bad, as bad as things are, just how much farther will they let things go? We may not have all that long to wait.

The ANP has an excellent booklet about the Federal Reserve system. It covers its history, how it works, and just how technically ILLEGAL the whole system is. It covers too much to post here, but if you email HQ, I'm sure for a small donation they'd be happy to send you one. I'd send for one. It's a real eye opener.

Comrades, the ANP is the best solution to this ever increasing problem. There are some groups who waste their time on useless protests and demonstrations that fall on deaf ears, and provide great ratings for the Jews Media. Other groups are waiting for the day when the White man will rise up, grab his gun, and take back his country. Please. The way the sheeple have been conditioned, do you really think there's a chance of that happening and us winning? Not bloody likely. Then there's other groups who just sit behind their computers doing cyber-activism. Well, that has its place, but it isn't enough. The ANP does BOTH. Plus we are now politically active.

I'd like to remind you that the Fuhrer tried a violent revolution. He got a prison sentence for his troubles. In the end, he succeeded through politics. That means elections. At first, the NSDAP lost. Then, little by little they started winning, until the time came when the Fuhrer was appointed Chancellor, and the NSDAP was the second largest party in Germany.

It can happen here too. But only if we ALL work together and do our parts. For example, spring isn't over for another five days. That means Spring Blitz is still going on. Let's get out that literature. I'll be making one last effort before summer begins. For security reasons, I won't say exactly when, but soon.

Even after spring, we should still get our regular amount of literature out. Talk to people, and I don't mean beer talk in bars. People love to sound off when they've had a few, but rarely follow through when they sober up. Keep trying to recruit. Nothing ventured, nothing gained. But remember everyone, never trust a stranger with sensitive information, like names of other Supporters. Let them send in their applications and pledges, do a little work for us, then we'll see how much they can be trusted. Trust is earned, never given. For example, when I returned to the ANP, I'm sure there were eyes on me until they felt I could be trusted. Under the circumstances, it was a sensible precaution.

But anyway, even though people like to have fun in the summer, we still have keep up our work. That especially goes for those of you who live in climates with a much harsher winter. A lot of the time you can't get out to do your activism because of the weather. Now that it has warmed up (an understatement for you Eastern Comrades with the current heat wave you're going through), we must get to work. Not that there isn't time to play, but we must make time for our work as well.

Proper management of our time will leave us plenty of room for our jobs, activism, AND some summer fun.

Now We're Screwed!

by Graham Summers

This is just a quick note to say that the US Dollar has just broken below its 50-day moving average again, bringing its latest bounce to an end.



In other words, the next round of inflation is now officially on the way.

Comment:

I'm sure many of you have noticed that gas prices have gone down about twenty cents a gallon in the last few weeks. Many financial analysts say that it is typical for prices to drop a bit just before a round of inflation. The calm before the storm, so to speak.

If financial expert Graham Summers is correct, we're in for the economic version of Hurricane Katrina in the next few weeks. If this does occur, the ANP must be ready to spread our message even more, and concentrate first on our economic, employment, and illegal alien policies above all. Not that we should ignore our racial policies by any means. But as the economy worsens, people will be more concerned about finding and keeping jobs, and being able to pay their bills, rather than whether some "damn Nigger" moves in next door.

Comrades, let's all be ready for the worst when it happens. If it doesn't, then no harm done. Of course, there's no if about it. However, there's no question that the worst will occur. The question isn't if, but when.

"Hope for the best. Prepare for the worst." - Benjamin Franklin.

Dan 88!

Now We're Screwed!

by Graham Summers

This is just a quick note to say that the US Dollar has just broken below its 50-day moving average again, bringing its latest bounce to an end.



In other words, the next round of inflation is now officially on the way.

Comment:

I'm sure many of you have noticed that gas prices have gone down about twenty cents a gallon in the last few weeks. Many financial analysts say that it is typical for prices to drop a bit just before a round of inflation. The calm before the storm, so to speak.

If financial expert Graham Summers is correct, we're in for the economic version of Hurricane Katrina in the next few weeks. If this does occur, the ANP must be ready to spread our message even more, and concentrate first on our economic, employment, and illegal alien policies above all. Not that we should ignore our racial policies by any means. But as the economy worsens, people will be more concerned about finding and keeping jobs, and being able to pay their bills, rather than whether some "damn Nigger" moves in next door.

Comrades, let's all be ready for the worst when it happens. If it doesn't, then no harm done. Of course, there's no if about it. However, there's no question that the worst will occur. The question isn't if, but when.

"Hope for the best. Prepare for the worst." - Benjamin Franklin.

Dan 88!

More Lies From The Federal Reserve Banksters

To make it easier, I've highlighted certain portions of this post so you can see that the Federal Reserve's actions have been to benefit the wealthy - not the working class. They do claim unemployment is down, but that's an out and out lie. The post I made a few days ago claims just the opposite - that unemployment is still rising, which from the observations of any reasonable person, is the truth. No matter what the Federal Reserve says, unemployment is up and is not likely to come down in the near future. - Dan.

QE2 worked, but what should Bernanke do next?

Observers worry that when the Fed stops spending it will bring recovery to a halt.

By MATTHEW CRAFT
The Associated Press

NEW YORK — Nearly everything is going according to the plan Federal Reserve Chairman Ben Bernanke hatched six months ago.

During a speech in Jackson Hole, Wyoming, on Aug. 27, Bernanke outlined an effort to spur economic growth, prevent prices from falling and push markets higher through the purchase of government bonds. Since then stocks have soared (benefits the wealthy), the unemployment rate has dropped (lie) and Americans have started to spend more.

"It's been a success," says Bill Gross, who manages the world's largest mutual fund at Pimco. Gross had skewered Bernanke's attempt to boost the economy, comparing it to a Ponzi scheme. "It's hard to dispute that since Jackson Hole the market is up around 25 percent."
(benefits the wealthy)

But the Fed's $600 billion program to buy Treasurys ends in June. And Gross and other investors are concerned the stock and bond markets will fall without the Fed's $75 billion monthly injection. "At the end of June, the biggest bond buyer steps away," he says. "The markets could have a shock in store."

Now there's a different economic issue. Higher prices for food and energy have replaced a double-dip recession as a major concern for economists and investors. In the first of two days of Congressional testimony Tuesday, Bernanke took heat from Senate Banking Committee members who argued that the bond-buying program known as quantitative easing is to blame.

The Fed chief blamed the recent jump in commodity prices on droughts and severe weather that have cut supplies at the same time China's appetite has grown. (lie) Bernanke assured Senators he would quickly tighten lending before inflation posed a threat. He said the U.S. economy still needed the Fed's support. (lie)
On the surface, Bernanke's speech in Jackson Hole was full of Fed-speak. But the language was clear to those in the audience at the Fed's annual Board of Governors meeting in the Wyoming resort. "He was saying, 'Whatever it takes we're going to do,'" says Richard Hoey, chief economist at BNY Mellon. "It was a Rambo message."

The move, which began in November, was unorthodox, but the logic was simple: Buying $600 billion in Treasurys would make borrowing cheaper and move investors out of low-yielding bonds into riskier investments like stocks. A rising stock market could then give Americans confidence in the economy and spur consumer spending, which leads to higher corporate profits. (benefits the wealthy)

A lot has happened in the markets and the economy since then — most of it good.

• The unemployment rate dropped to 9 percent in January, the most recent month for which data is available. It was 9.6 percent in August. (lie - unemployment is down temporarily because of the hiring of tax preparers and inventory takers - all seasonal jobs)

• The Consumer Price Index rose 0.4 percent in January and 1.6 percent over the previous year. Prices rose 0.2 percent last August from the month before and just 1.1 percent over the previous year. (benefits the wealthy - personally I prefer prices lower - don't you)

• The Standard & Poor's 500 stock index is up 27 percent since Aug. 26, the day before Bernanke's speech, powered by stronger corporate profits and people moving their savings into stock funds. (benefits the wealthy)

• Consumer spending has climbed seven months in a row. In the last quarter of 2010, it grew at the fastest pace in three years. Spending rose 0.2 percent in January, according to data released Monday.

"Measured in the fairest possible way, and by just about every measure, QE2 has succeeded so far," says Anthony Chan, chief economist at JPMorgan's wealth management unit. QE2 is market slang for the Fed's quantitative easing program.

Long-term interest rates are the exception. They've been on a steady climb, until the recent turmoil in Egypt and Libya pulled them lower. ( lie - Libya and Egypt are but two oil producing countries - a lack of oil from them couldn't possibly account for a 70 cent per gallon price increase - with further raises to come - the Judeo-Capitalist are just using this as an excuse to extort more money from us) The benchmark 10-year Treasury rate recently hit 3.50 percent. That's up from 2.49 percent on Aug. 26. But rates fell after the Jackson Hole speech and then began rising on each bit of good news about the economy. Economists say that's how it's supposed to work. Interest rates typically rise during an economic recovery to compensate bond holders for the negative hit from inflation. (benefits the wealthy)
"When this stuff starts to work, interest rates go up," Chan says. "Otherwise, it's just not working."

It's another story if rates jump too quickly. "Obviously, higher rates can stop an economy dead in its tracks," he says.

How could rising rates derail the Fed's efforts? A common worry among investors is that the Fed proves too successful in pushing up prices and inflation gets out of control, leading to a spike in rates. (possibly)

A similar but separate concern, Hoey says, is that people come to expect rampant inflation and begin preparing for it. Companies raise prices in anticipation. Investors ditch bonds en masse, interest rates jump and borrowing turns suddenly expensive. (Another lie to benefit the wealthy businessmen)
"It has brought us closer to an unstable rise of inflation expectations," he says. "There's a risk of exceptional instability."

Another danger: There will be nobody to replace the Fed when the program ends in June. "Who will buy when the fed stops buying?" Gross asks, rhetorically. "Who will take their place? Mutual funds like Pimco?"

That's unlikely, he says, because investors have been pulling money out of bond funds. Other institutional investors, like insurances companies and banks, are beginning to put their money elsewhere. And even bond managers like Gross have been warning investors away from Treasurys for months. If rates rise too high and too quickly, they squelch the economic recovery and drive down stocks.

Jack Albin, chief investment officer at Harris Private Bank, worries that the U.S. could wind up with a similar experience to Japan's. The Japanese central bank also managed to boost prices and spur economic growth through pushing money into financial markets starting in 2001. Bond yields began rising. But the benefits evaporated when the central bank pulled back.

"Maybe it was a problem of timing," he says. "But once they took the quantitative easing programs off, the economy just sagged back to where it was before."

Copyright 2011 The Associated Press.

Comment:

Like I said, all these benefits go to the wealthy. We, the workers get nothing - as usual. This is a perfect example of why this rotten, corrupt, filthy system of financial slavery must be replaced by one that puts the interests of the workers, most especially the White Workers first. That system is National Socialism. 'Nuff said.

Dan 88!

More Lies From The Federal Reserve Banksters

To make it easier, I've highlighted certain portions of this post so you can see that the Federal Reserve's actions have been to benefit the wealthy - not the working class. They do claim unemployment is down, but that's an out and out lie. The post I made a few days ago claims just the opposite - that unemployment is still rising, which from the observations of any reasonable person, is the truth. No matter what the Federal Reserve says, unemployment is up and is not likely to come down in the near future. - Dan.

QE2 worked, but what should Bernanke do next?

Observers worry that when the Fed stops spending it will bring recovery to a halt.

By MATTHEW CRAFT
The Associated Press

NEW YORK — Nearly everything is going according to the plan Federal Reserve Chairman Ben Bernanke hatched six months ago.

During a speech in Jackson Hole, Wyoming, on Aug. 27, Bernanke outlined an effort to spur economic growth, prevent prices from falling and push markets higher through the purchase of government bonds. Since then stocks have soared (benefits the wealthy), the unemployment rate has dropped (lie) and Americans have started to spend more.

"It's been a success," says Bill Gross, who manages the world's largest mutual fund at Pimco. Gross had skewered Bernanke's attempt to boost the economy, comparing it to a Ponzi scheme. "It's hard to dispute that since Jackson Hole the market is up around 25 percent."
(benefits the wealthy)

But the Fed's $600 billion program to buy Treasurys ends in June. And Gross and other investors are concerned the stock and bond markets will fall without the Fed's $75 billion monthly injection. "At the end of June, the biggest bond buyer steps away," he says. "The markets could have a shock in store."

Now there's a different economic issue. Higher prices for food and energy have replaced a double-dip recession as a major concern for economists and investors. In the first of two days of Congressional testimony Tuesday, Bernanke took heat from Senate Banking Committee members who argued that the bond-buying program known as quantitative easing is to blame.

The Fed chief blamed the recent jump in commodity prices on droughts and severe weather that have cut supplies at the same time China's appetite has grown. (lie) Bernanke assured Senators he would quickly tighten lending before inflation posed a threat. He said the U.S. economy still needed the Fed's support. (lie)
On the surface, Bernanke's speech in Jackson Hole was full of Fed-speak. But the language was clear to those in the audience at the Fed's annual Board of Governors meeting in the Wyoming resort. "He was saying, 'Whatever it takes we're going to do,'" says Richard Hoey, chief economist at BNY Mellon. "It was a Rambo message."

The move, which began in November, was unorthodox, but the logic was simple: Buying $600 billion in Treasurys would make borrowing cheaper and move investors out of low-yielding bonds into riskier investments like stocks. A rising stock market could then give Americans confidence in the economy and spur consumer spending, which leads to higher corporate profits. (benefits the wealthy)

A lot has happened in the markets and the economy since then — most of it good.

• The unemployment rate dropped to 9 percent in January, the most recent month for which data is available. It was 9.6 percent in August. (lie - unemployment is down temporarily because of the hiring of tax preparers and inventory takers - all seasonal jobs)

• The Consumer Price Index rose 0.4 percent in January and 1.6 percent over the previous year. Prices rose 0.2 percent last August from the month before and just 1.1 percent over the previous year. (benefits the wealthy - personally I prefer prices lower - don't you)

• The Standard & Poor's 500 stock index is up 27 percent since Aug. 26, the day before Bernanke's speech, powered by stronger corporate profits and people moving their savings into stock funds. (benefits the wealthy)

• Consumer spending has climbed seven months in a row. In the last quarter of 2010, it grew at the fastest pace in three years. Spending rose 0.2 percent in January, according to data released Monday.

"Measured in the fairest possible way, and by just about every measure, QE2 has succeeded so far," says Anthony Chan, chief economist at JPMorgan's wealth management unit. QE2 is market slang for the Fed's quantitative easing program.

Long-term interest rates are the exception. They've been on a steady climb, until the recent turmoil in Egypt and Libya pulled them lower. ( lie - Libya and Egypt are but two oil producing countries - a lack of oil from them couldn't possibly account for a 70 cent per gallon price increase - with further raises to come - the Judeo-Capitalist are just using this as an excuse to extort more money from us) The benchmark 10-year Treasury rate recently hit 3.50 percent. That's up from 2.49 percent on Aug. 26. But rates fell after the Jackson Hole speech and then began rising on each bit of good news about the economy. Economists say that's how it's supposed to work. Interest rates typically rise during an economic recovery to compensate bond holders for the negative hit from inflation. (benefits the wealthy)
"When this stuff starts to work, interest rates go up," Chan says. "Otherwise, it's just not working."

It's another story if rates jump too quickly. "Obviously, higher rates can stop an economy dead in its tracks," he says.

How could rising rates derail the Fed's efforts? A common worry among investors is that the Fed proves too successful in pushing up prices and inflation gets out of control, leading to a spike in rates. (possibly)

A similar but separate concern, Hoey says, is that people come to expect rampant inflation and begin preparing for it. Companies raise prices in anticipation. Investors ditch bonds en masse, interest rates jump and borrowing turns suddenly expensive. (Another lie to benefit the wealthy businessmen)
"It has brought us closer to an unstable rise of inflation expectations," he says. "There's a risk of exceptional instability."

Another danger: There will be nobody to replace the Fed when the program ends in June. "Who will buy when the fed stops buying?" Gross asks, rhetorically. "Who will take their place? Mutual funds like Pimco?"

That's unlikely, he says, because investors have been pulling money out of bond funds. Other institutional investors, like insurances companies and banks, are beginning to put their money elsewhere. And even bond managers like Gross have been warning investors away from Treasurys for months. If rates rise too high and too quickly, they squelch the economic recovery and drive down stocks.

Jack Albin, chief investment officer at Harris Private Bank, worries that the U.S. could wind up with a similar experience to Japan's. The Japanese central bank also managed to boost prices and spur economic growth through pushing money into financial markets starting in 2001. Bond yields began rising. But the benefits evaporated when the central bank pulled back.

"Maybe it was a problem of timing," he says. "But once they took the quantitative easing programs off, the economy just sagged back to where it was before."

Copyright 2011 The Associated Press.

Comment:

Like I said, all these benefits go to the wealthy. We, the workers get nothing - as usual. This is a perfect example of why this rotten, corrupt, filthy system of financial slavery must be replaced by one that puts the interests of the workers, most especially the White Workers first. That system is National Socialism. 'Nuff said.

Dan 88!