Posted by Tina
When he was warned repeatedly about ill-advised lending regulations, which eventually lead to the market crash during the final months of George Bush’s presidency, Barney Frank poo pooed those e concerns…repeatedly. We all know how that turned out. We also know that Democrats who put those dangerous regulations in place then piled on to blame Bush. It helped to get Barrack Obama elected and ushered in reforms to banking that have forced small banks to fail and forced large banks to maintain high levels of reserve cash.
Guess what? It’s election time again and with growth at a measly 1.1% for the last quarter the Democrats don’t have a thriving economy to tout. Friday the big shots in banking met in Jackson, Wyoming and it only took Frank a micro-second before he again tried to manipulate to favor Hillary Clinton. He said it would be a mistake to raise interest rates “before the election,” because it would “risk destabilizing markets and possibly the broader economy.”
As Tyler Durden of Zero Hedge points out today, Frank is saying that “…a crash taking place within 3 months of the election would boost Trump’s victory chances to 86%.” Old Barney can’t have that.
Jackson….an observation explains a lot:
Fiscal policy was not on the formal agenda for the conference, but it was a steady part of the dialogue as policymakers thought through policies for a post-crisis world. One of the central worries is that households and businesses have become so cautious and set in their outlooks – expecting little growth and little inflation – that they do not respond in expected ways to the efforts central banks have made.
That has included flooding the financial system with cash, and voicing a steady commitment to their inflation targets in an effort to make people believe they will be met.
Let’s see, they set policy, even continued it for eight long years though it shows no signs of creating real recovery, in an attempt to make us “believe” the policy will work?
Do they think we’re stupid?
Are THEY really that stupid?
I fear the answer is yes to both.
Making purchases, particularly large purchases like homes, cars, boats, and vacations is risky. It involves a leap of faith that your job will continue and there won’t be any unexpected events like flooding, a severe car accident, or a life changing illness or death in the family. Investing in one’s business or the stock market also involves various levels of risk. In times of uncertainty people hunker down and put off spending and investing. We’ve been waiting for eight long years for the recovery to kick into gear. Eight years! Why would we “believe” that more of what the Fed is doing would suddenly have a positive effect on the economy? Why would we, as individuals, families, or business owners take a risk in such an environment?
I understand that the American people have picked up their spending this year. The bad news is that most of the spending is being done on credit cards. We’re piling up more dept for ourselves. See here and here.
(I encourage anyone who’s deep in debt, in particular credit card debt, to read The Truth About Credit Card Debt, by Dave Ramsey.)
The economic policies of the last eight years are policies that promote debt. The Fed believes if they keep interest rates low by dumping money into the stock market people will “believe” things are getting better and they will spend. They think we can be fooled into borrowing and spending and that will create a strong economy. They fail to notice we aren’t fooled…we have been holding back. They fail to notice we don;t choose to borrow but are forced to borrow just to make ends meet. The wealthy can take advantage of low interest rates. This policy is a boon to them. The middle class is effectively forced to surrender it’s buying power. The rich get richer, the middle class stagnates or falls into debt, and the ranks of the poor rise. Do you sense the swirling motion as we all head down the drain? As the ranks of the poor increase, so do the demands on government services. It doesn’t take a Fed chairman to realize this means our nation too is going into deeper debt.
Where does it end? Bubbles. Bubbles of all kinds are bubbling up out there. Credit card debt is a bubble. College debt is a bubble. Car loan debt is a bubble. Stocks are in a bubble and there’s another housing bubble forming. This has been building for some time. See here and here. Most small investors are heavily weighted in cash out of prudence. Too many Americans are uneducated, uninformed, an ill prepared for what comes next.
I read one analyst that explained the ebbs and flows of the market are natural just as the ebbs and flows of the seasons and the tides are natural. But when we try to manipulate and control these natural forces we created crisis conditions. I’m not educated enough to know what the best course of action should be but I am smart enough to know that if what you’ve been doing has created a mess it’s time to stop and change course.
Hillary Clinton is tied to the bankers and politicians who favor the current policy. Can we stand four more years?