While Ben Bernanke’s announcement that the Federal
Reserve will embark on an open ended scheme to purchase $40 billion in
mortgage-backed securities each month has been touted by the
establishment media as the beginning of “QE3″ it is in fact nothing less
than another banker bailout in disguise.
While many have rightly attacked the Fed’s policy of
printing money as a band aid that does little to solve the economy in
the long term, this new move isn’t even about that. The policy announced
yesterday will merely see the Fed use taxpayer money to purchase more
bad debt in the form of junk mortgage-backed derivative based securities
that have been sold over and over again.
This has nothing to do with getting the economy going
again and will only serve as yet another huge wealth transfer from the
middle class to the elite.
While the fed claims the move will facilitate more lending it will do nothing of the sort. As the China Securities Journal reports today, “QE3 is not likely to result in more loans.”
“The truth is that it isn’t as if banks are hurting for cash to loan out,” writes Michael Snyder.
“In fact, right now banks are already sitting on $1.6 trillion in
excess reserves. Just like with the first two rounds of quantitative
easing, a lot of the money from QE3 will likely end up being put on the
shelf.”
Indeed, after the TARP bailout back in 2008, the Federal Reserve paid the big banks to withhold loans,
because the bailouts are not about reinvigorating the real economy,
they are about propping up the stock market for the rich while the real
economy goes to the dogs.
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