November 20, 2017

US Federal Reserve to inject $900 Billion

No it is not Moscow. It is the US Federal Reserve Building. Not hard to see where the architects got their inspiration from. Definite Soviet style on display here. Both in structure and economic philosophy.

The US Federal Reserve has announced it will attempt to stimulate growth by pumping up to $900 billion into a sluggish American economy.

With lacklustre consumer spending, businesses have been reluctant to hire and the economy has hardly grown at all. Inflation is low, interest rates are low. About the only thing that isn’t low is the deficit.

The central bank is to buy $600 billion in long-term Treasury Bonds over the next eight months. It has also announced it will reinvest an addtional $250 billion to $300 billion in Treasury Bonds with the proceeds of its earlier investments.

Newswarped wonders with all this stimulaton going on in the US economy why we have not seen a big national orgasm by now.

The politicians and bankers are wondering that too, but they seem to have run out of ideas.

The whole thing resembles one of those hospital dramas when a patient goes into cardiac arrest. All the doctors can do is administer increasingly large shocks to try and resuscitate the patient. They have run out of options so they keep doing the same thing until they are forced to admit the inevitable – the dude is dead.

Looking into the fishbowl of the US economy, it seems that a particular industry is going to need to have a boom and send confidence ripples throughout the rest of the nation.

In recent years the boom was based on crazy imaginary rises in the value of property. Also there was the war in Iraq and Afghanistan that provided an artificial boom in military-industrial spending paid for by more imaginary public money.

The United States of America needs something real and different to stimulate growth. They are losing out to Asia in heavy industry production and mining. About all the US can look to where they still have a competitive advantage is in primary agricultural production and technological innovation.

If they cannot get something moving soon they will be forced to watch as Europe and Asia economic power rises and re-arranges the hegemony of the world. A world where the United States no longer calls the shots.

Even now it looks as though the golden years of the United States empire are in the past.

Comments

  1. Why do you spell “treasury bonds” with an apostrophe before the final “s”?

  2. So where is this 900 billion actually going to come from? My Great grandchildren’s taxes!