Fed continues the destruction of the dollar with QE3
September 19, 2013
This morning, former congressman Dr. Ron Paul explained why Federal Reserve chairman Ben Bernanke’s unexpected decision yesterday to continue pumping $85 billion a month into the economy is bad for the American people.
On today’s edition of MSNBC’s Morning Joe show, anchor Joe Scarborough asked Dr. Paul what he thought about this morning’s front page of the Wall Street Journal: “Fed Stays On Easy-Money Course.”
“I think that it’s a major admission by Bernanke that things aren’t good,” Paul said. “He’s literally saying ‘We’re in bad shape!'”
“Yet the markets didn’t interpret it that way because the markets are reflecting just that ‘easy money’ going into the stocks but it doesn’t help those 99% or at least the large middle class and poor; it won’t help them one bit.”
Paul further stated that it won’t help Americans get jobs, so there’s still a large disconnect between Wall Street and the public.
“I think it was a very, very bad announcement yesterday that the economy is a lot worse off,” he continued. “I think in time that will prove to be the case.”
Other economic indicators back up Dr. Paul’s statements.
This morning, the price of oil rose above $108 a barrel after the Fed decided to keep their inflation-creating policy called quantitative easing unchanged.
In making that decision, officials with the central bank admitted that the growth of the economy hadn’t met their expectations and they even lowered next year’s outlook.
The Fed began this current iteration of quantitative easing, the third one since 2008, back in Sept. 2012.
Initially with QE3, the Fed pumped $40 billion of new currency into the economy per month through an open-ended bond purchasing program.
Last December, the Federal Open Market Committee increased money creation to $85 billion per month, which has continued into the present, contrary to its decision in June to scale it back this month.
The Federal Reserve Bank of San Francisco, however, admitted that after five years of quantitative easing, bond purchasing programs have had little effect on the economy.
The chart below shows the U.S. GDP growth in nominal terms (the dark blue line), the performance of the Dow Jones Industrial Average (the black line), and the real GDP growth that accounts for inflation (the light blue line):