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The Fed is set to Act–and so is McConnell

October 26, 2010

Ever heard of “quantitative easing?” I hadn’t either.  It is Federal Reserve-speak for buying Treasuries (aka debt) with guess what? Dollars. But if you’ve been paying attention at all you already know that the government is into deficit spending–$5 Trillion since Nancy Pelosi said, “No new debt” on taking control of the House in 2007.

That means that the Fed is buying debt securities with…more debt. Again, something they said they would never do. But since this is the second time they’ve done it, it’s being dubbed “QE2” and it’s being done on November 3rd, the day after the elections when otherwise the country will be breathing a collective sigh of relief.

Colorado’s very own Bob McConnell is going to Washington to protest. In a press release, Bob wrote:

The madness continues.  On November 3rd when nobody’s looking Bernanke and the Fed plan to push the button and infuse our economy with up to 500 billion dollars of MORE FIAT MONEY (money based on nothing).
I’m going to DC.  I’ll be on the steps of the Federal Reserve Building at 7am on November 3rd.  Read more about this fiasco and my protest.  Join me in person or in spirit.
More than ever I am convinced there is a concerted plan to drive us into economic serfdom so the wealthy elite can control the whole show. The Fed answers to no one now, not even the people. I will be there, I will be vigilant. We will never let them destroy us. It is time to answer to the people.
Canada Free Press is reporting on the planned protest; Bloomberg reports on the impact of the purchase on bond prices. The Personal Finance Bulletin doesn’t know what the effect will be on mortgage rates or inflation but the idea is to stimulate the economy. The Blaze, Glenn Beck’s new online media outlet, reports that the move could have very serious long-term consequences, including civil unrest.
If you thought we could be over the worst with the November 2nd election, think again. Winston Churchill said it best on November 10, 1942 after Montgomery’s victory at El Alamein:

Now this is not the end. It is not even the beginning of the end. but it is, perhaps, the end of the beginning.

Like Churchill and the British in 1942 we have a long hard slog ahead of us but with leaders like Bob McConnell and those we are about to elect next week, we will persevere and eventually triumph.

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