. The purpose of the nation’s central bank should be to serve best interest of the entire nation not just speculators and brokers on Wall Street. Despite their claims to the contrary, quantitative easing was never about reducing high unemployment or improving our sluggish economy. If it had been, we would have changed tactics several years and a trillion dollars or so ago. What little progress we have made in recovery in our nation’s economy is obviously the result of time itself, not because of anything the Federal Reserve has done. The overpriced stock market has actually been counter-productive to both reducing high unemployment and improving our overall economy. Public held corporation continue to reduce their work forces and put off making investments in product development and production facilities simply to show temporary increases in profits to justify their overpriced share price. While increases in stock prices may appear great news for retirement funds,401ks,etc, these increases as the result of quantitative easing are simply not sustainable as evidenced by the drastic drop in the stock market by the mere mention of tapering the program down. The only people benefiting from this policy are the large brokerage operations of the mega-banks and speculators. While the consumer price index with all its built-in distortions may not reflect high inflation yet, any working class American can easily illustrate that the purchasing power of their hard earned dollars is deteriorating at a rate of much more than two and half percent now. Unfortunately, this will get drastically worse if these policies are not reversed in the very near future. When corporations can make no further cuts in their work force or hold off making necessary investments, they will be forced to make drastic price increases in their products and services to produce profits that are commiserate with their overpriced stock. The unfortunate fact is either the stock prices revert back to realistic values or the nation will inevitably suffer the ravages of high inflation for a number of years to come. Keep in mind that the very reason that the recession occurred in the first place was the reluctance of the Federal Reserve to provide the regulatory functions for which they were responsible. They were simply more interested in serving the whims of the mega-banks than the best interest of the entire nation.
Posted on: Thu, 27 Jun 2013 02:01:23 +0000
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