You Know It's Bad When Even the Village Idiot Can Puzzle Out the Dirty Fed
I've been avoiding writing about this for the last two days but I can avoid it no longer. Sarah Palin is probably the least qualified person I can think of to ruminate on the evils of the Federal Reserve (ok, second least, Obama has her beat in this market) and please understand that it absolutely kills me to say this but her speechwriters have obviously been reading their doomsday financial blogs because, well, she's right. Yeah I said it. She still makes the bile rise in my throat and I would rather have a fingernails scrape down a chalkboard that's shoved directly up my ass than see her hold any office of authority in this country but damnit, she got it:
I’m deeply concerned about the Federal Reserve’s plans to buy up anywhere from $600 billion to as much as $1 trillion of government securities. The technical term for it is “quantitative easing.” It means our government is pumping money into the banking system by buying up treasury bonds. And where, you may ask, are we getting the money to pay for all this? We’re printing it out of thin air.Or as WC Varones so brilliantly said, "I can see Zimbabwe from my house!"
The Fed hopes doing this may buy us a little temporary economic growth by supplying banks with extra cash which they could then lend out to businesses. But it’s far from certain this will even work. After all, the problem isn’t that banks don’t have enough cash on hand – it’s that they don’t want to lend it out, because they don’t trust the current economic climate.
And if it doesn’t work, what do we do then? Print even more money? What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?
Please, Sarah, for the love of all that is sacred and holy, we know you love attaching yourself to everyone else's campaign but please PLEASE leave this one to those more qualified to make these statements. I'll go ahead and say it: you're perceived as a joke by anyone outside of your bizarre hardcore fanbase. The very last thing the End the Fed campaign needs is your endorsement. Seriously.
What does this mean? It means that the Fed is so obvious that anyone with 1/4 of a brain (or equally intellectually-equipped speechwriters) can see how fucked up they are. And if Sarah Palin can easily see the consequences of QE 2, why in the hell is it beyond the All-Seeing Bernanke to do the same?
Strange times, kids, strange times.