|In case you didn't notice, the Federal Reserve is in a panic. It's in a panic because despite pumping trillions of dollars into the financial system, the economy is barely able to keep its head above water and growing very slowly.
And, the situation is far worse in Europe. There, the economy has not only been declining for over a year, that decline is accelerating. The unemployment rate is steadily rising and now stands at a seasonally adjusted figure of 12.1%. Purchasing Managers report that business continues to slow, with Manufacturing PMI at 46.7 (any number below 50 indicates recession and the further below 50, the greater the rate of recession). The Fed knows that Europe's failed austerity policy has cratered the economy and is now publically criticizing Congress for trying to implement that same failed policy of austerity right here in the USA.
You know that the Fed, despite being a private bank, was created by Congress 100 years ago? Criticizing Congress is something the Fed has never done before. They know that if the USA follows Europe into recession, they will bear the brunt of the blame and could risk being destroyed by Congress if things get bad enough.
The Fed has good reason to panic. Europe may drag the USA down despite the Fed's printing money to boost stock prices to levels of overvaluation not seen since the dotcom bubble burst in 2000.
Thursday, May 09, 2013
Fed in a Panic
Posted by Unknown at 15:14