What The Fed is doing, basically, is imposing a huge tax increase of $600 billion over the next six months on the economy. While we're arguing over a $700 billion tax problem over the period of ten years, or $70 billion a year, Ben Bernanke has just imposed an effective $1.2 trillion annualized tax increase on the American Economy - seventeen times the size of the Bush "Tax Cuts".
Tax increase?
Yep.
It's just hidden.
The Government is selling their debt to The Fed. The Fed is in turn debasing the currency. This causes the dollar to go down in value, which in turn causes all commodities denominated in dollars to go up in price.
But wages are not rising (unit labor costs) which means you are forced to absorb the increase in commodity prices without any increase in your earnings.
That's a tax increase.
It's that simple folks.
This isn't good for the economy, it's bad for the economy.
The Market will continue to play along for a while, right up until the reality of margin collapse is realized.
You buy stocks for future earnings. Those earnings are going to go the wrong way.
Tomorrow? Probably not.
But will it - with certainty?
Yes.
This is monetary suicide, and if Ben Bernanke had an ounce of decency (he doesn't) he'd pull a Budd Dwyer and do to himself what he's doing to America - and Americans.
