Q3 is the New Banker Bailout; Ron Paul Says They are Weakening the Dollar

New Banker Bailout Disguised As QE3

Latest move represents huge transfer of wealth from the middle class to the elite

September 14, 2012

Infowars.com - 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.

QE1 and QE2 both did absolutely nothing to rescue the economy. Despite a massive injection of quantitative easing over the last four years, the unemployment rate in the United States has barely improved.

In addition, the “wealth gap” between rich and poor has vastly increased. This again illustrates how actions such as the one announced yesterday have nothing to do with helping the little guy get back on his feet and everything to do with the concentration of financial power into fewer hands.

As George Washington’s Blog points out, “This is just another bailout for the big banks. (If the government had instead given money directly to the consumer, we would be out of this economic slump by now).”

“Bernanke claims that the main justification for QE3 is to boost employment. This is slightly ironic, since Bernanke’s policies are largely responsible for creating high unemployment in the first place. The real justification is to try to artificially prop up asset prices. But that approach has been proven to be an absolute failure.”

Indeed, the Federal Reserve admits that its new program will do little to alleviate the suffering of jobless Americans.

“I want to be clear — While I think we can make a meaningful and significant contribution to reducing this problem, we can’t solve it. We don’t have tools that are strong enough to solve the unemployment problem,” Bernanke said yesterday.

The fact that we haven’t seen massive inflation since the start of the Fed’s so-called quantitative easing policies illustrates how the money is not even being pumped back into the economy. The only real inflation has been in the luxury sector because the rich are getting richer and spending more while the poor continue to live on or below the poverty line.

QE3 is merely another massive wealth transfer and a tool of waging economic warfare on the poor and middle class, another manifestation of neo-feudalism to destroy America and have the global bankers pose as the saviors.

The economy is being destroyed by design so that the elite can exploit the fear and chaos caused by the collapse in order to centralize power and control. This can also be seen over in Europe where Jose Manuel Barroso is exploiting the crisis in a bid to turn the EU into a “federation”.

Bernanke’s latest move is merely a continuation of the engineered takeover of the U.S. economy and will achieve nothing aside from enriching the wealthy to an even greater degree while ensuring the rest of us continue to see outliving standards decline on the path to economic serfdom.

Ron Paul Reacts to More Federal Reserve Stimulus

“It should not surprise anybody, but it is still astounding. To me, it is so astounding that it does not collapse the markets. [Bernanke] said, ‘We are in very big trouble. We are going to do something unprecedented and we believe it will not hurt the dollar.’ And yet the stocks, they say ‘we love this stuff.’ But the dollar didn’t do so well today and the real value of the dollar is measured against gold, and gold skyrocketed from its very low to its highest. It means we are weakening the dollar. We are trying to liquidate our debt through inflation. The consequence of what the Fed is doing is a lot more than just CPI. It has to do with malinvestment and people doing the wrong things at the wrong time. Believe me, there is plenty of that. The one thing that Bernanke has not achieved and it frustrates him, I can tell—is he gets no economic growth. He doesn’t do anything with the unemployment numbers. I think the country should have panicked over what theFed is saying that we have lost control and the only thing we have left is massively creating new money out of thin air, which has not worked before, and is not going to work this time.”

On potential unintended consequences:

“The biggest unintended consequence is what we need is a restoration of confidence. If the Fed is expressing a lack of confidence and they do not know what to do, it does not do anything to restore confidence. People might restrain from doing anything. ‘Interest rates are low. I do not have to buy my house this year. I will wait until next year. It might be a little easier. Prices might come down.’ So people are restrained and it is the opposite of when you expect that housing prices are going up, and you are afraid interest rates are going up. That is why the market rate of interest is so crucial. The rate of interest should give the businessman, the entrepreneurs, the investors and the savers information. But there is no market to interest rates. That is why there is such gross distortion and why we do not have a market economy. We have a rigged economy through central economic planning by central banking. The system is failing, it was doomed to fail and we have to wake up to that fact.”

On whether the Federal Reserve needs discipline:

“Short of getting rid of the Fed, which is not going to come and I wouldn’t do that overnight anyway, I would say that Congress has the authority to say, do not buy debt. Do not buy any debt. The Congress can yell and scream and pander to the people. They can say the deficits are terrible and terrible. But nobody wants to cut overseas spending or food stamps for the poor. They say, ‘we cannot do it without the Fed. The Fed has to buy this debt.’ That is a moral hazard for the politician. If the Fed couldn’t buy the debt, and interest rates would rise all of the sudden the burden would be on the Congress to get their house in order to restore confidence. Even that would panic a lot of people because live within your means? We do not like that. We like this idea that we can give people anything they want for free, so we can get reelected. Well, all of this is coming to an end.”

On whether Bernanke should be pulling back liquidity and raising interest rates right now instead:

“Liquidity should be determined by the market. I don’t think he should raise rates. He should just get out of rigging rates. The system is so biased. It helps the bankers who get free money and then they buy government debt. What about the people who are frightened, they do not like the stock market and they are frugal and want to take care of themselves? What do they get—1% on a CD? That is unfair. It’s bad economics. You want to let the market determine interest rates and let it sort it out. People get so nervous, because we have lived so long with a Keynesian economic model of fixing interest rates and intervening in the market.”

On whether Romney would do the right thing with the Federal Reserve if elected:

“So far, I have not heard that he would, but he has changed his mind before. If he gets to be president, we will keep our fingers crossed.”