In what could be one of the understatements of 2011, Fed Chairman Ben Bernanke, speaking at the International Monetary Conference in Atlanta on Tuesday, remarked, “U.S. economic growth so far this year looks to have been somewhat slower than expected.… A number of indicators also suggest some loss of momentum in the labor market."
With the European economy in shambles from a seemingly intractable sovereign debt crisis and the United States technically out of money to fund its own bloated government, talk of sovereign default is in the air. Greece, the beneficiary of the first of three EU/IMF bailouts, is again on the ropes, insisting that it will not be able to meet its June obligations of more than $13 billion in interest payments. The hard-pressed Greek populace, meanwhile, is balking at the range of financial austerities being urged upon them by their government’s creditors, and Greece’s political class is caught in the middle. The financial world is expecting Greece to default eventually, and other EU debtors like Ireland, Portugal, and even Spain to follow suit.
When Jason West of Vernal, Utah, tried to pay his disputed medical bill last week with 2,500 pennies, he was issued a citation for disorderly conduct. The reason for the charge was that West allegedly dumped the pennies onto the cashier's desk and asked her to count all of them. While the manner in which West delivered his payment may have been a bit extreme (placing rolled coins gently on the desk might have avoided the citation) there was an irony in his case that points to a more important principle than good manners, which are more frequently these days being enforced by the local constabulary, rather than by Emily Post. That is, had he paid the bill with federal reserve notes — backed, really, by nothing more than the promise of the federal government that the paper money has value — then he would have faced no legal problems at all.
Do we need a “Balanced Budget” Amendment? NO! A constitutionally sound, informed electorate could quickly bring about the conditions that would allow the nation to balance the federal budget and end deficit spending. Thomas Jefferson wrote: “A nation that expects to be ignorant and free … expects what never was and never will be.” The voters must come to understand that it is our responsibility to make certain our Representatives honor their oath of office and keep their actions constrained within the scope and bounds established by the Constitution (no, the Constitution does not say “from each according to his ability, to each according to his need” — that was Karl Marx).
The calamitous economic plight of the so-called “PIGS” nations of the European Union (Portugal, Ireland, Greece, and Spain) is well known to the world. Greece is in the spotlight this week, as, according to the New York Times, "[It] took the first step to raise money from the sale of government assets on Monday while a top official at the European Central Bank argued that the country was not insolvent and should not be excused from paying its debts."
In 2006 the Federal Reserve decided it was time to begin to reach out and influence middle schoolers with the party line about the Fed, and launched the Federal Reserve Kids Page. Consisting of 10 harmless-appearing questions, either in English or Spanish, the Fed’s answers gloss over, and sometimes deliberately misstate, the correct answers.
Analysts are warning that the Federal Reserve is gearing up for a third round of quantitative easing, which involves printing money and flooding the market with the inflated cash through the bond market. The Federal Reserve purchases bonds with printed money, which in turn leads to more inflation. Despite the lessons learned by the first two rounds of quantitative easing, the Federal Reserve is preparing for a third round.
Many were shocked to learn that foreign banks were the largest recipients of the Federal Reserve’s discount loan program during the height of the financial crisis. Unfortunately, providing emergency cash to foreign banks is just one “absurdity from the recession-era financial markets,” as dubbed by The Blaze. According to Bloomberg News, the Federal Reserve also handed out $80 billion in secretive loans to banks at absurdly low interest rates.
Echoing the Obama administration’s characterization of the tax breaks being enjoyed by the five major oil companies (Exxon, ConocoPhillips, BP America, Shell, and Chevron) as "subsidies," the Senate tried to remove them on Tuesday, but failed.
That bump you just felt was the U.S. Treasury running up against the federal debt ceiling of $14.3 trillion. It happened on May 16 and was, as all the proponents of raising the ceiling warned, supposed to precipitate the greatest economic catastrophe in history.
Although Monday, May 16th is the day the financial world was supposed to end as the federal government’s spending hit the debt ceiling, Treasury Secretary Timothy Geithner (left) announced that he was able to put off that day of reckoning until August 2nd. In a letter to Congress, Geithner said that by borrowing from a pension fund belonging to federal workers and from an emergency fund set up to “help deal with foreign financial crises” coupled with slightly higher tax revenues than expected, he is able to stave off the inevitable until early August. But he warned that failure to raise the debt ceiling by that date “would have a catastrophic economic impact.”