Submitted by: Donald Hank
The Fed has "added" $1.8 trillion in MBS (mortgage backed securities -- junk, almost worthless) and GSE debt (GSE = Government Sponsored Enterprise, like Fanny and Freddy--also junk) to its portfolio thru quantitative easing (printing money a la Weimar).
Further, the Fed is leveraged 51 to 1. That means for every dollar it has lent out, it only has 2 cents in the bank. That is suicidal. You would never do that. Your friends would stop dealing with you if you tried to lend out debt with nothing valuable in reserve.
This is why the author of the below-linked article is sure we are headed for disaster. Of course, anyone with half a brain knows that anyway.
I am not saying that to scare you. I want you to pressure to the GOP to run a candidate who understands this financial mess and will do something about it. Ironically, while Cain was once a Fed banker and many have seen him as a potential savior, he is in fact the worst choice (he was in favor of the TARP bailouts from you to your wealthy banker nobility). If you understand that the Fed contributed mightily to the current malaise, then you don't want anyone from the Fed to try to "fix" the mess.
It is very much like a doctor who brought the patient to death's door with bloodletting being asked to "heal" the patient. With a brand new lancet.
Would you hire the doctor with a doctorate in bloodletting to heal you? I bet you wouldn't. So don't let the quacks "fix" your economy either. Same thing.
Don Hank
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