Fed says "extended period" may last a long time

This is no surprise. The US Gov depends on the banks to loan it money to operate, as it's debt flies into outer space on a parabolic trajectory. It has no choice. Each round of borrowing has to be grander than the last.

To keep this borrowing going, now that the Chinese, Saudis and others have lost interest in financing our eternally expanding debt, the Fed has no choice but to loan money at near zero rates, so the banks can make easy no risk profits, by lending it to the US Gov.

This gives the pretend illusion that the Fed isn't just printing money at fantastic rates and just giving it away to the taxpayer. Nope, it's creating easy profits to keep the banker's mountains of riches grow.

And of course, the taxpayer is backing both ends of this trade and is on the hook for the money our Gov borrows. If this goes sour, the taxpayer will have to cover the losses in triplicate. Of course this is more money than exists in the world. But that's just a technicality.

Silly prediction: In less than 20 years, our national debt will be measured in the hundreds of trillions by 'official' gov stats. Unemployment will be dramatically worse.

I'm still looking for a severe economic dislocation in the Merry Month of May.


Fed says "extended period" may last a long time

h/t FTW

In response to the worst financial crisis in generations, the Fed not only cut short term interest rates to near zero but also undertook a host of emergency measures aimed at reviving credit markets in the past three years.