December 12, 2012
Citing fictitious unemployment numbers, Federal Reserve boss Ben Bernanke announced today that the Fed will spend $45 billion a month to “sustain an aggressive drive” to force long-term interest rates to zero and keep them there “until unemployment drops below 6.5 percent.”
The Fed said it will direct the money into long-term Treasurys to replace an expiring bond-purchase program known as Operation Twist and further increase its “investment portfolio,” now reaching a whopping $3 trillion.
Bernanke and the Fed cited cooked numbers that claim unemployment in the United States fell to 7.7 percent in November.
In fact, as John Williams’ Shadow Government Statistics website demonstrates, the real unemployment rate is 22.9 percent.
In order to trick the public into believing things are better than they actually are, the Fed and the government do not include unemployed members of the workforce who are not actively looking for work or workers with part-time jobs who are seeking full-time employment.
Despite the government claim that unemployment fell in November, a recent Gallup poll shows that it increased significantly from October to November. “Underemployment, as measured without seasonal adjustment, was 17.2% in November, a 1.3-point increase since the end of October,” Gallup reports. “The uptick in November also puts an end to the six-month trend of improvements or no change.”
The Federal Reserve announcement means interest rates will remain near zero for the foreseeable future.
Economists, including former Secretary of Labor Robert Reich, predict unemployment will stay high for at least a decade.
Economist David Levy, chairman of the Jerome Levy Forecasting Center, said at the outset of the recession the country faces a new era of chronically high unemployment. The United States will confront “the mother of all jobless recoveries” in the years ahead, economic historian John Steel Gordon said at the time.
As Rep. Ron Paul has noted, near zero interest rates fueled the 2008 recession and have proloned it today.
The Federal Reserve’s “manipulation of interest rates – essentially price setting – can only ever have destructive effects on the American economy,” Paul told the House’s Domestic Monetary Policy and Technology Subcommittee in September. “Artificially low interest rates continue to cause malinvestment and misallocation of resources throughout the economy. Savers and investors suffer from negative real interest rates, while the federal government takes advantage of the Fed’s zero interest rate policy to run up gargantuan fiscal deficits. These problems cannot and will not be remedied until the Fed stops manipulating the price of money.”
This article was posted: Wednesday, December 12, 2012 at 12:58 pm