Wednesday, November 03, 2010

The power of the press

No, not that press. This press is the one that can print money, real money, such as it is, and is answerable to no one known to the other press.

The $600bn that Bernanke will use to buy treasury bonds will probably serve, at least for a time, to prop up the stock market and drive down the value of the dollar, helping make iPads and Kinects manufactured in China more affordable for Europeans. Win-win, as they say.

The WaPo headline says the maneuver is to 'boost economic recovery'. That is a lie. It is to desperately maintain the financial system from going down the rat hole, for now.

It will have to be followed by more of the same, $600bn is a drop in the bucket of the derivative black hole, expect another early next year, if not sooner.

Barack Obama has temporized from a position where he had some power to one where he has less. As David Broder so astutely pointed out, his only choice now is to go to war.


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