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Federal Reserve Declares Deep Economic Contraction

January 7, 2009

unemployment-ads2008 ended with an economic whimper mostly because of huge and underestimated American job losses, resulting in further economic collateral damage. Retirement savings that millions have poured their souls into have lost substantial value. At the December FOMC meeting, the Fed spent a considerable amount of time mourning and recounting the flailing job market and resulting economic damage.

What has really garnered attention is their revised picture regarding economic expectations for 2009. The economic gross national product is expected to fall much more sharply in the first half of 2009 than previously anticipated by the Fed. They expect a slow recovery of GDP over the remainder of the year depending on the political stimulus “from monetary and assumed fiscal policy actions.” That is “Greek” for government intervention.

“GDP was projected to decline for 2009 as a whole and to rise at a pace slightly above the rate of potential growth in 2010.” In economics, economic growth or economic growth theory often refers to growth of potential output or production at full employment, which is caused by growth in aggregate demand or observed output. Since all the relevant figures are skewed, the Fed’s statement is pretty much meaningless as far as content, but is designed to inspire hope in the psychological realm.

wealth destruction

wealth destruction

Americans are taking a beating where their personal wealth is concerned. Interbank lending and bank lending in general remains frozen, the system continues as broken, a creation of the unprecedented greed and misuse of the economic system during the Bush administration as they cheered on the economic boom as true prosperity. Instead, the boom years of the Bush administration has proved to be a manipulation of the system for corporate and personal goals by those in power without supervision and little regulation.

The problem of transparency continues to be the single major issue in all finances across the board. However, the process of making the financial process more transparent will put someone in more control, with the potential to not only to observe and manipulate, but profit directly from the any new process of transparency. Additional transparency creates power for the administrative body that deals with transparency issues, likely creating a fascist influence. The Federal Government isn’t likely to jump at the task of dealing with the prospect of increased transparency that is being heralded. Congress has proved that they don’t really deal with the reality of money.

The process and the profit from any additional transparency will likely fall to the Federal Reserve, a corporate body with their own profit and global agenda: a brotherhood of central bankers. They have received the power so far because of the lack of discipline and direction offered by U.S. government officials, whether executive or legislative. ~ E. Manning

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