his is a house of cards. That’s the thrust of Ron Paul’s new article for The Free Foundation. If you thought Ron Paul would just go quietly into the night after his failed but trendsetting presidential bid, you would be mistaken. With the Fed announcing it was going to continue QE and possibly even increase it, Paul was quick to bemoan the decision but said it was expected as the Fed has lost the ability to exit gracefully from the markets.
He goes further in the letter talking about the stealth of QE3 due to its low headline figure. QE 2 came with a $600 billion price tag. Yet the unlimited monthly purchases do not garner the headlines, yet the constant monthly purchases will quickly eclipse QE2. By year’s end, the Fed balance sheet could surpass $4 trillion. With no real recovery in sight, the Fed is essentially creating new asset bubbles. Housing prices are skyrocketing in certain areas as investors look to get back into the house flipping game. Government debt is still on a unsustainable trajectory. And Dow 15k and the S&P at all time highs just goes to show that the Fed’s unlimited cash injection has created a market that is not based in reality.
Paul focuses on the pain inflicted by Wall Street and Fed on the everyday family. One in seven Americans are on food stamps. Five million are collecting unemployment with 21.5 million affected by unemployment. That’s 13.9% of the workforce either unemployed or underemployed.
He points out that the reason for the lack of sup lines from the Great Depression is because everything is electronic now. EBT cards have replaced the lines so there is not the headline making photos of the food kitchens etc.
