Drop in U.S. energy use drags stock market lower

If this had ended at $700 billion it would have been bad, but it didn’t. No, The Fed then continued onward to announce the purchase of $1.2 trillion dollars (that’s $1,200 billion more!) of debt and securities that, according to Section 14 of The Federal Reserve Act, they are not lawfully allowed to buy.(Section 13.3, often cited as justification, only allows the making of loans - not the purchase of assets. All purchase authority rests in Section 14.)

The FDIC then stepped outside of its legal mandate as well,“deciding” to guarantee bond issuance by banks - something that has absolutely nothing to do with depositor insurance. Why? Because once again, it is unacceptable in the Washington DC establishment if those who make bad loans - on purpose - have to eat them. Only the borrower - that is, the “ordinary Joe”- is allowed to have his future destroyed. The lender, who is supposed to also lose his money when he makes a bad decision (thereby providing a strong disincentive to making bad loans) is to be protected by the taxpayer, thereby screwing the borrower twice - first by bankrupting him, then demanding that he bear the cost for the lender who made the bad lending decision as well!

Keynesian Economics and it’s offshoot (”Chicago” economic theory) is, at its core, a scam. Not because the idea is invalid, but because it dictates that during times of plenty (”booms”) the government must raise taxes and pay down debt - not just “decrease deficits.” Yet in the post-war era we have never managed to run a material surplus, not even during Clinton’s years despite the claims of his boosters - he, like all other modern administrations, cheated by “banking” FICA and Medicare deposits (which are pledged against liabilities in the future!) The boosters of Keynes refuse to discuss the fact that they’re not even following his claimed theories, but rather are playing “black sharpie marker” with the parts they don’t like.

Now here’s the scary part: Even though more than half of all American households now own equities directly or through mutual funds, an increase in equity prices does not figure into the Fed’s calculation of inflation. So while measures of core inflation (which exclude food and energy) carefully register minute gains in the price of a fixed basket of goods and services meant to reflect what a typical family buys to achieve a minimum standard of living, they ignore massive price surges in what has effectively become a widely held consumer good: stocks.

Moreover, the Fed’s inflation-targeting approach overlooks price increases for real estate and rising commodity prices. Don’t even mention gold, which has gone from $707 to $1,114 since a year ago.

Gosh, I guess there's only one thing the energy companies can do...raise prices. It's so tough to trade in oil futures these days. I almost feel sorry for the gas gougers (boo hoo)

Nice copy paste

I am confused? Just yesterday, the stock market was up. Up and down? Still, the economic recovery is working. More and more jobs will be added. And, eventually, we will reduce our deficit. America will be strong once again.

Brenda wrote:

I am confused? Just yesterday, the stock market was up. Up and down? Still, the economic recovery is working. More and more jobs will be added. And, eventually, we will reduce our deficit. America will be strong once again.

"More and more jobs will be added"??

Funny, the October job numbers just came out. Another half a million Americans filed for unemployment last month.

Whatever you're smoking, you might want to lay off for a while.