The distortion of free markets, sooner or later, ALWAYS ends in tears.
Markets, sooner or later, ALWAYS revert back to historical norms.
The larger the distortion of the market the more painful the eventual reversion to historical norms will be.
The Federal Reserve private bank is by FAR the WORST example of distorting free markets.
They control interest rates and money supply around the world. They grossly interfere in free markets. They are by FAR the largest manipulator of markets in the world today.
And they do it just about every day.
Examples of the Federal Reserve distorting markets and then causing huge amounts of subsequent pain.
The Federal Reserve greatly exacerbated the stock market bubble in the late 1920's with their easy money policies of the time.
The Federal Reserve then greatly exacerbated the great depression by decreasing the money supply.
The Federal Reserve greatly exacerbated the Nasdaq bubble in the run up to 2000 with their easy money policies.
Instead of letting the fall out of the Nasdaq bubble run it's course with a minor recession, the Federal Reserve lowered base rates to 1% into 2003/2004.
This GREATLY exacerbated the housing bubble which had already started and led to near financial armagedon with the housing price crash and banking insolvencies.
If the Federal Reserve hadn't meddled and had left interest rates at about 5% where they were in 2000, we would all be INCREDIBLY MUCH BETTER OFF.
It also GREATLY exacerbated the sovereign debt bubble, government deficits and National Debts.
Governments around the world had no incentives to stop spending and get their collective financial houses in order.
What should of been a mild recession after 2001 has been turned into a total global financial disaster by the policies of the Federal Reserve private bank.
Instead of letting the fall out of the housing market crash run it's course and letting the markets readjust, the Federal Reserve lowered interest rates to zero and embarked on quantitative easing.
The only effect of quantitative easing has been the lowering of disposable incomes and living standards of ordinary people and a transfer of wealth from middle America to the big banks and financial elites.
It certainly has NOT created any decent paying jobs or wealth creation in America - quite the reverse.
Governments around the world are now struggling with their mountainous debts and huge annual deficits.
These problems have been primarily caused by the policies of the Federal Reserve private bank in encouraging, instead of discouraging, governments around the world to increase their borrowing, their deficits and their debts.
The National Debt of America has tripled in just 12 years.
It has gone from $5tn in 2001 to $16.5tn now.
The government is still running trillion dollar deficits and doing nothing to rein in it's spending.
According to the Congressional Budget Office, Federal spending is planned to increase to $6tn in 2023.
The deficits and national debt will more or less rise in line with these spending increases.
The deficit will be about $3tn a year in 2023.
The National Debt will be over $40tn.
The Federal Reserve private bank continues to exacerbate America's economic policies by lowering disposable incomes - in fact they have just made it even worse by announcing in September that they were stepping up the printing of money in QE from $500bn a year to $1tn a year.
The fall out from the current economic and financial crisis is going to be devastating for the entire world.
The primary source of blame lies with the Federal Reserve private bank.
The Federal Reserve should be ended as soon as possible.
The $3tn on it's balance sheet, soon to be $4tn and growing at $1tn a year should be frozen.
The shareholders of the Federal Reserve should lose ALL of that money as a tiny proportion of the damage they have done to America.
The creation of the Federal Reserve private bank is the WORST thing that ever happened to America (including the civil war).
It encouraged the creation of vast amounts of debts by the government.
It made it very easy to borrow huge amounts of money.
It made it very easy for the government to spend recklessly in order to get re-elected.
Until the day of reckoning arrives, interest rates revert back to historical norms of 5% or 6% and America is recognised for what it is. Financially bankrupt.
When that eventually happens it will set off an economic fire storm raging across America and the entire world.
Stop this from happening. Minimise the damage and the fall out.
End the Fed. NOW.
See also :-
The frightening path that the government and the Federal Reserve have set out upon.
http://ian56.blogspot.co.uk/2013/02/there-is-no-way-out-for-federal-reserve.html
Appendices
Federal Reserve propaganda
The Federal Reserve private bank engages in endless propaganda that it somehow acts as some sort of financial safety net or is somehow a force for good.
When the Federal Reserve is THE root cause of America's problems and massively exacerbates every boom and bust cycle.
Just as it is currently doing right now.
The primary purpose of the Federal Reserve private bank is to make money for it's shareholders - just like any other private company.
The major shareholders of the Federal Reserve are other private banks and financial elites.
The principle business model of the Federal Reserve and how it benefits it's shareholders is to ensure that there are huge and increasing debts.
Debts upon which interest is paid to it's major shareholders - principally the big banks.
The principal business model of the Federal Reserve is to extract interest payments from the entire American population who pay that interest mostly to it's shareholders.
It is even written into the Fed's charter.
The Federal Reserve's loans to the government have collateral.
The collateral is the labor of EVERY American citizen and the taxes that can be extracted from that labor.
That is why America has one of the harshest tax regimes in the world.
It does not matter if you go and work some place else.
You are still liable for American taxes (unlike most other countries).
The only way you can escape the Federal Reserve and it's shareholders living off your labor, is to leave America and renounce your citizenship.
The creation of the IRS, also in 1913 was the second worst thing to ever happen to America.
The IRS was principally created to collect the money in taxes to make the interest payments to the Federal Reserve and it's private shareholders (principally the large banks) on the vast amount of debts that were sure to be created, by the creation of the Federal Reserve private bank.
The Effect of the Federal Reserve on America in the last 50 years
Total money supply expanded exponentially until the current financial crises started hitting
The National Debt has also increased exponentially
The National Debt is now at $16.5tn
Real economic growth vs money supply inflation
When there was REAL economic growth in America in the 1950's and 1960's and there were low government deficits and little money supply expansion, EVERYBODY'S income and standard of living rose dramatically.
When economic growth is fuelled by exponential government debts and money supply inflation (from circa 1980) only the rich benefit.
Congressional Spending plans to 2023
We will get more of the same or worse, until we do.
200 years of government bond yields
Interest rates WILL revert back to their historical norms in the future.
Markets ALWAYS revert back to historical norms sooner or later.
The historical norm for US government bond yields is 5 or 6%.
Markets tend to overshoot the historical norm for a while, if they previously got far away from the norm.
Just like they did from 1940 to 1980.
And just like they have done from 1980 to today.
Global future global growth projections
These projections are a little out of date.
The forecast was kind to the US. It is already down to 21.5% of global GDP, as at end 2011, due to poor governance, poor monetary policy, poor economic policies, increased regulations and overspending on the military.
The European Union's economy is just entering a major recession, due to it's mountainous debts.
Europe is America's largest export market.
Global GDP by country
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
The Republicans and Democrats are currently shuffling deckchairs on the titanic with their discussions about budgets and the Fiscal Cliff.
Neither party has any proposals to make America more COMPETITIVE again, so that the wealth of ordinary Americans might increase instead of rapidly declining.
REAL Unemployment - America's lost decade
Real Inflation is now nearly 10% a year
(All governments understate true inflation - it makes their economic performance look better and reduces their costs. America just lies more than most.)
Income Inequality and Stagnation
Real male median wages are now back to the levels of 1970.
Wealth is being transferred to the top.
The Welfare Society
Cumulative Annual debt 2008 to 2012
The US takes third place - just behind Greece and ahead of Spain.
Before the income tax and the Federal Reserve there were government surpluses
http://ian56.blogspot.co.uk/2013/01/before-income-tax-there-were-surpluses.html
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