Federal Reserve Free Money at Heart of Economic Recovery

Federal Reserve Zero-Interest Loans Enrich Rich

Some wonder what will happen when the Federal Reserve stops its program of letting the biggest banks mint 5 dollars themselves for every zero interest dollar the Fed Reserve 'loans' them? The Federal Reserve printing trillions of electronic dollars to loan to the U.S. Government and banks is a curious thing. I wonder what effects it will have on inflation and the value of the dollar over time.

http://en.wikipedia.org/wiki/Quantitative_easing#US_QE1.2C_QE2.2C_and_QE3 4.5 trillion dollars so far

http://money.cnn.com/2010/12/01/news/economy/fed_reserve_data_release/ 9 trillion dollars in zero-interest loans overnight

Obama administration economic policy apparently relies on zero interest loans to make up federal budget shortfalls while the U.S. public debt has passed 18 trillion dollars.. Hitler had trouble with such policies causing hyper-inflation yet Obama seems able to get away with it because the U.S. Government is too big to fail- like the banks. Russian President Putin could not print rubles to make up for the sanctions and drop in oil value without causing hyper-inflation comparatively.

If I understand it right, and I may not, when the federal reserve invents money out of thin air with nothing backing it up like gold or whatever and then gives that money electronically to a bank, the bank need only keep a certain percentage of that new capital in its accounts and can issue loans on the basis of having that capital asset. It can issue something like 5 times the amount of money that it has on hand. Thus when the Federal Reserve issues one dollar of fiction money to a bank the bank can mint 5 dollars of fiction money itself and give that out as a loan to Wall Street or people that will buy Wall Street stocks.

With so much new money flowing about the financial circuits the liquidity problem of 2008 obviously is solved for the rich. The rich can buy all the nationally distressed housing from the crash era if they like and of course buy up stock, and that could inflate the value of the stock market. It is possible that all the free government money given to the banks along with tax cuts for the rich does stimulate the plutocrats yet it does little for the poor or ordinary Americans. The Euro-zone is expected to pursue the same policy of enriching the rich in order to create another fountain of wealth for the plutocracy.

It could be that inflation actually accumulated in Wall Street during the three years of quantitative easing during which time the stock market rose to a record level surpassing 18,000 itself as if it were indexed inversely to the public debt of 18 trillion. That was a rare convergence of debt and fiction cash financed market recovery that may converge again some day in the future in an unforeseen manner.

Investing in China and making a super-nation of the E.C. may pressurize Russian national security on two of three fronts with the Muslim threat from the south continuing as a problem, yet that sort of avoidable insecurity is not unrelated to the global financial situation that the administration has taken farther along the slim-flam to advantage market investors policy that appeals to a planetary imperium of plutocrats.

The next installment of global financial perfidy might be as good as the original show.