QE-Money Scam

The Fed was announced on November that it will buy $500 billion to $1 trillion in government debt, and drive already low long-term interest rates even lower. Economists call it “quantitative easing.“ It gets the name ”QE2″ — like the ship — because this would be the second round. The Fed spent about $1.7 trillion from 2008 to earlier this year to take bonds off the hands of banks and stabilize them. The proper economic term for QE is "monetizing the debt" and the more colloquial phrase is "printing money".

There are a few reasons central banks don't use the term "printing money".1). The central bank does not actually have to print money, they just create digital credit in a computer and give it to banks. 2). All central bankers learned in banking class 101 that printing money is bad for the currency and the economy that uses that currency. There is one reason that central bankers don't use the proper economic term "monetizing the debt". All central bankers learned in banking class 101 that monetizing the debt is bad because it creates inflation which is bad for the economy and for the currency.

So if printing and monetizing is bad, why is the central bank doing it? They are doing it for the same reason that all governments who had a currency not based on gold have printed money for centuries. They have run out of money and don't want to pay the price of default. It is much easier to steal from the productive people in society who trust the currency than to reform and restructure debt. "Central banks" were separated from the government for the sole reason to prevent this recurring tendency of governments to ruin its economy by printing money and giving that money to itself or struggling friends. Thus, central banks were given independence from government with a priority to keep the currency stable (ie. no printing allowed!).

The US central bank wants to print money but they can't say "I want to print money". Nor will intellectuals allow them to say "I plan to monetize the debt." Instead they created a new term which makes it seem like they are doing something new that has a chance of working. We are told that all of our bad debts can be washed away with this new inventive process called QE!.

We do not know the size of the Fed’s program, nor do we know how the markets will react in the short-term. However, one thing we know with near certainty – a large quantity of newly printed money is going to flow from the Fed to the eighteen primary dealers. We also know a significant amount of the electronic greenbacks will flow from the primary dealers into the accounts of their clients. Since the Fed encourages the primary dealers to offer client bonds in the QE competitive bidding process, it is helpful for investors to know more about the clients of the primary bond dealers. Sovereign wealth funds, who do business with numerous primary dealers, will be one of the most influential groups who may participate in QE2. A sovereign wealth fund is a state-owned investment fund, which holds a wide variety of financial assets, including stocks, bonds, commodities, currencies, precious metals, and real estate.

One of the largest sovereign wealth funds is the Norway Global Government Pension Fund, which holds somewhere in the neighborhood of $400 billion in assets. Others include the China Investment Corporation ($300 billion), Singapore Investment Corporation ($250 billion), Hong Kong Monetary Authority ($225 billion), the Russia National Welfare Fund ($140 billion), and the Australian Future Fund ($60 billion).

And now, in a desperate last attempt to keep the whole thing from imploding, enter the Ponzi schemers who have pulled out all the stops to keep the inevitable from happening..