Chapter 28 The Federal Reserve IS NOT the Problem!
November 22, 2015
While I contend that the Fed Chairmen are co-conspirators in the real problem (USAPonzi) by not exposing it, they are not causing the financial crisis that we face. The media pundits repeatedly point to the Federal Reserve's QE action and low Fed Funds rate as causing uneasiness in the financial markets, possibly even creating an asset bubble in the equity market even as we see some less favorable economic data beginning to emerge. It is my judgment that the Fed is taking monetary actions to hopefully stimulate the economy and reduce unemployment but these actions are really being taken just to mitigate the real problem.
The U.S. Government IS the Real Problem!
I contend that the Federal Reserve actions to keep the Fed Funds rate low and to buy assets (QE) is actually a reaction to the real problem which is caused by the U.S. Government's fiscal policy. The U.S. Government is overspending, overcommitting, undertaxing, lying, and bankrupt. As a result of this fiscal policy the U.S. Government is operating "The Biggest Ponzi Scheme on the Planet" (USAPonzi) and that is the cause of our current fiscal dilemma.
Most people realize that the U.S. Government is spending more than it's income, is having to borrow to cover the cash deficit, and as a result is having to continually raise the debt limit.
Most people do not realize that the U.S. Government is not collecting enough tax revenue to pay for our social benefit commitments.
Most people do not realize that the U.S. Government is spending what social benefit tax revenues they do collect that are in excess of our current year social benefit outlays to pay for our general operating expenses.
Most people do not realize that the U.S. Government is reporting our annual deficit using Cash Accounting when it should be using GAAP Accounting.
Most people do not realize that the U.S. Government is making the upper class appear to be super rich by undertaxing them.
The Federal Reserve's monetary policy has created $4-5 Trillion of counterfeit money over the last few years but the U.S. Government's fiscal policy has created $99.8 Trillion of counterfeit money since FY1969. Which do you think is the bigger problem?
The real question is:
Why is the U.S. Government not reporting our U.S. Government financial status using GAAP Accounting?
I contend that the Fed will not be able to set a rational monetary policy until the U.S. Government takes significant action to balance our GAAP basis budget but rather will have to significantly expand the rate at which they print money to compensate for what will be an every increasing Cash basis deficit that will be incurred due to the current massive GAAP basis deficit spending (See Why the U.S. Government raises the Debt Ceiling).
Financial data sourced from usdebtclock.org Nov 22, 2015.
Continue to: 29 Why the U.S. Government raises the Debt Ceiling Table of Contents