As most Americans, if not the financial media, are aware, Quantitative Easing (a euphemism for printing money) has failed to bring back the US economy. So why has Japan adopted the policy?
Since the heavy duty money printing began in 2013, the Japanese yen has fallen 35% against the US dollar, a big cost for a country dependent on energy imports. Moreover, the Japanese economy has shown no growth in response to the QE stimulus to justify the rising price of imports.
After the Great Recession had officially began (but prior to the stock market crash of 2008/09) George W. Bush responded to the early signs of economic trouble with a "helicopter drop" in the form of lump sum tax rebates to wage earners to help stimulate the economy. They were provided for in the Economic Stimulus Act of 2008, with support from both the Democrats and the Republicans. The bill was signed into law on February 13, 2008.
International corporations use “free market” capitalism ideology to justify globalization and create a “world-market-state.” Supposedly, “free market” capitalism makes America’s economy efficient and, therefore, far more prosperous. In practice, however, international corporations promote laws based on “free market” capitalism—for their own benefit.
Banks are at it again, as usual, and these latest adventures in fictional finance are off the public radar. Maybe the public has lost their outrage and why the latest news is out of earshot. Maybe people are just exhausted, watching absurdity after outrage coming from these financial institutions and the ones who are supposed to watch them. After all, nothing ever changes. We hear the same song, just a little bit louder and a little bit worse.
For those once again thinking they were getting their crack cocaine, quantitative easing, once again they are disappointed.
The FOMC statement showed no change in policy from the Federal Reserve. For the rest of us, the FOMC statement acknowledges our crappy economy.
Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.
Additionally the Fed doesn't expect things to really improve:
The Central Banks went on the move. Within 45 minutes of each other, the ECB lowered interest rates, the Chinese central bank did too and the U.K. just enacted more glorified quantitative easing. BoE increased their asset purchases by £50 billion to a grand total of £350 billion.
While it appears we have a global, coordinated plan of attack by Central banks, one might also notice we have a global coordinated plan to counter an economic slowdown. In other words, by all acting in concert, this gives more confirmation that we have a global economic mini-implosion going on.
Federal Reserve Chair Ben Bernanke gave testimony before the Joint Economic Committee and the doves fell from the sky. Bernanke cut short Wall Street's addict like demand for more quantitative easing and instead suggested a host of policies to boost hiring and real economic output.
More-rapid gains in economic activity will be required to achieve significant further improvement in labor market conditions.
In fact, Bernanke suggested the next FOMC meeting discussion question will ask: Will there be enough growth going forward to make material progress on the unemployment rate? This is good, Bernanke realizes the #1 threat to the U.S. economy is the jobs crisis.
The Fed Chair also warned on the ongoing sovereign debt crisis in the Eurozone:
The Federal reserve announced Operation Twist, an action from 1961 where the Fed swaps out treasuries of short maturity lengths, for longer ones, all in an attempt to flatten, or twist the yield curve. From the Economist:
Operation Twist has long been considered a failure. Early studies found little impact on yields, vindicating those who argued that the price of a security depends only on expectations—of inflation, for example, or monetary policy—not its relative supply. Eric Swanson, an economist at the Federal Reserve Bank of San Francisco, disagrees. Previous studies, he reckons, didn’t properly isolate the influence of Operation Twist from countervailing factors. By studying the behaviour of bonds right around announcements related to Operation Twist, he concludes the programme lowered yields by 15 basis points in total.
This is the battlefield on which corporations and their customers are struggling for survival. If companies can make price increases stick, the consumer is going to bear the burden of inflation, and for a lot of consumers this can be the last gasp to bankruptcy.
The Federal Reserve is on the defensive over its next round of Quantitative Easing, known as QE2. Over 20 distinguished economists and market analysts placed an ad yesterday in The Wall Street Journal urging the Fed to drop its plan to purchase $600 billion in Treasury securities over the next six months. Finance ministers around the world have deplored this policy for its tendency to generate global inflation and scupper the dollar on the foreign exchange markets. Even that noted financial expert Sarah Palin has published a Facebook criticism of the Fed’s “running the printing presses.”
Some Federal Reserve governors have warned about the potential inflationary implications of QE2, even though they voted for it. Fed Chairman Ben Bernanke and NY Fed President William Dudley have been in the media during the past week, justifying their QE2 decision. If you analyze their comments carefully, you realize they haven’t been helping their cause.
Banks are at it again, as usual, and these latest adventures in fictional finance are off the public radar. Maybe the public has lost their outrage and why the latest news is out of earshot. Maybe people are just exhausted, watching absurdity after outrage coming from these financial institutions and the ones who are supposed to watch them. After all, nothing ever changes. We hear the same song, just a little bit louder and a little bit worse.
Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop. 
For those once again thinking they were getting their crack cocaine, 
The Central Banks went on the move. Within 
Federal Reserve Chair Ben Bernanke 
The Federal reserve announced Operation Twist, an action from 1961 where the Fed swaps out treasuries of short maturity lengths, for longer ones, all in an attempt to flatten, or twist the 
Recent comments