– via Hyscience
Sarah Palin blasts Obama for defending the QE2 in her new post titled “Obama’s Clever Way to Punt the Tough Calls: Driving the Dollar Down”:
In his press conference on Monday, President Obama responded to critics of the Federal Reserve’s decision to start a new round of quantitative easing – a fancy term for printing money out of thin air. He claimed this move would drive up U.S. growth rates. He also warned that “the worst thing that could happen to the world economy, not just ours but the entire world’s economy is if we end up being stuck with no growth or very limited growth.”
The latter is certainly true. It would be a global disaster if the U.S. economy remained permanently stuck in the mud. But the same cannot be said of his claim that the Fed’s experiment in pump priming would automatically lead to increased economic growth. By the time this experiment is over, QE will make us queasy.
Will driving the dollar down in this way do anything to boost U.S. exports? The short answer is not really. A weaker dollar will temporarily boost exports by making our goods cheaper to sell; but inevitably other countries will respond in kind, triggering the kind of currency wars economists are warning us about. It’s precisely to prevent this scenario that World Bank President Robert Zoellick recently came out in favor of some new type of gold standard or “international reference point.”
Will QE2 then at least boost domestic investment? No, again. As I explained in my speech in Phoenix, the reason banks aren’t lending and businesses aren’t investing isn’t because of insufficient access to credit. There’s plenty of money around, it’s just that no one’s willing to spend it. Big businesses especially have been hoarding cash. They’re not expanding or adding to their workforce because there’s just too much uncertainty created by a lot of big government experiments that aren’t working. It’s the President’s own policies that are creating this uncertainty.
And Peter Schiff notes that Palin is right in his video blog yesterday. Take note of the rising numbers for staples…as Glenn Beck predicted:
Oil this morning hit a two year high before closing negative on the day but some commodities managed to hold their gains, the CRB did hit a new high today, it is making, again, a string of successive new highs, new all time high for cotton, sugar hit a contract high, soy beans…soy beans were up over 50 cents a bushel closing at 13.29 a bushel. We actually have beans in the teens. I’ve never even seen this in my adult life, I think it was the rallying cry in the 1970’s bull market. It’s back and I think today was just a reversal Tuesday. Look at the bond market tho, look at the yield on the 30 year bond rising to 4.25 this is the highest yield on 30 year treasuries in six months. And as I mentioned before I think the bond market is slowly eroding, certainly at the longer end of the curve. The 10 year was weak today but I think all our longer term interest rates are moving up as Quantitative Easing is already backfiring on the federal reserve. It is producing higher, not lower, interest rates.~~~
The world is throwing a lot of criticism on the fed now for QE2. I think the harshest criticism is coming from Germany. Germany, which understands inflation quite well, called Ben Bernanke clueless. I’ve used that word too so maybe the Germans are paying attention to some of my writings. The Russian central bank was critical.
Obama was in India, I think he’s still there, and he made a speech in which he’s trying to defend the fed. And this is really kinda funny because first of all he said that he doesn’t want to comment on fed policy because he doesn’t want to compromise the independence of the fed, well, there isn’t any independence left to compromise. The irony of it is that normally when its the fed acting tough, you know removing the punch bowl, unpopular, raising interest rates, that’s when you don’t want to bash your central bank because you don’t want to create the impression that the government is putting pressure on the central bank to be too easy. Or to be easier. To not be be tougher. But when you have people asking Obama to criticize the central bank for being to easy! I mean that’s when he should be criticizing them because the federal reserve is acting really in concert with the government to facilitate government debt, to monetize government debt, that’s exactly when it should be criticized. I mean the whole thing is ridiculous.
But also Obama basically said that the fed has a mandate to grow the economy.
Well…where do you figure that out? Where did you get that mandate?
I mean there’s a dual mandate now for price stability and maximizing employment. But where is growing the economy? It’s not part of the mandate. And the fact is the fed can’t grow the economy. You don’t grow the economy by printing money but the fact that Obama A – thinks the fed has a mandate to grow the economy and B thinks they can grow the economy shows how clueless he really is. That the Germans were right.
He goes on to completely tear Bernanke a new one for his reasoning behind QE2…creating another stock market bubble. Plus he sends praise Ron Paul’s way. Paul is a nut, that’s for sure, but I can’t fault ALL of his idea’s and critique of the fed.
Instead of putting money into the economy more directly by cutting taxes our government is using the fed to print money out of thin air and making a bad situation worse.
It’s going to get pretty damn bad.
Let the ponzi scheming begin.