Ready or not, QE3 is here, and the long-term effects of this reckless money printing by the Federal Reserve are going to be absolutely nightmarish. The Federal Reserve is hoping that buying $40 billion worth of mortgage-backed securities per month will spur more lending and more economic activity. But that didn’t happen with either QE1 or QE2. Both times the banks just sat on most of the extra money. As I pointed out the other day, U.S. banks are already sitting on $1.6 trillion in excess reserves. So will pumping them up with more cash suddenly make them decide to start lending? Of course not. In addition, QE3 is not likely to produce many additional jobs. As I showed in a previous article, the employment level did not jump up as a result of either QE1 or QE2. So why will this time be different? But what did happen under both QE1 and QE2 is that a lot of the money ended up pumping up the financial markets. So once again we should see stock prices go up (at least in the short-term) and commodities such as gold, silver, food and oil should also rise. But that also means that average American families will be paying more for the basic necessities that they buy on a regular basis. The most dangerous aspect of QE3, however, is what it is going to do to the U.S. dollar. Most of the rest of the world uses the U.S. dollar to conduct international trade, and by choosing to recklessly print money Ben Bernanke is severely damaging international confidence in our currency. If at some point the rest of the world rejects the dollar and no longer wants to use it as a reserve currency we are going to be facing a crisis unlike anything we have ever seen before. The real debate about QE3 should not be about whether or not it will help the economy a little bit in the short-term. Rather, everyone should be talking about the long-term implications and about how QE3 is going to accelerate the destruction of the dollar. (Read More...)
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Police Shut Down Lemonade Stands And Cookie Stands Run By Kids All Over America – Is There Anything We Are Still Free To Do Without Government Permission?
If you plan on using the bathroom before you get done reading this article, you might want to check with the government to see if you are still allowed to do that. There are very, very few things that Americans still have the freedom to do today without government permission. Back in the old days, if young kids wanted to earn some extra money they would set up a little stand outside and sell some lemonade or some cookies. For many little kids, this was their very first practical experience with making money. Once upon a time, you would see lemonade stands all over the place during the summer in America. In fact, “lemonade stands” became such a part of American culture that people knew exactly what you were talking about the moment you mentioned them. Even up until a couple of decades ago, nobody would have ever dreamed that little kids would need the permission of the government in order to set up a little stand to sell some lemonade or some cookies. But today, everything has completely changed. If you are a little kid and you try to sell some lemonade in “Amerika” today, the authorities will swoop in and shut you down in a heartbeat. (Read More...)