The Federal Reserve is out of ammunition. Its major weapon to control the supply of money is the interest charged on borrowing. Since the interest rate has been effectively zero for several years, this option is not available. With the threat of a global money freeze looming, what options are available? The latest plan is another bailout of “distressed borrowers’ loan balances:
US Federal Reserve policymakers are increasingly urging fiscal authorities to consider reducing distressed borrowers’ loan balances, a politically fraught position for a central bank that has long sought to distance itself from fiscal policy.
The Fed has never “sought to distance itself from fiscal policy”. Their main objective is to devalue the dollar to reduce future loan repayments and steal our life’s savings through inflation. This latest attempt to make us pay for other people’s houses to stimulate an economic recovery does not make sense. Our government and media have told us that the country is not in recession and that our housing market has turned around. But now we get this following statement:
“Housing markets have shown little sign of improvement so far in this recovery,” Elizabeth Duke, one of the Fed’s five sitting governors, said last week. “This stands in sharp contrast to the important role that the housing sector has typically played in propelling economic recoveries.”
As expected, Fannie Mae and Freddie Mac will be the means to continue to carry out the programs that initially led to the global economic collapse started under Jimmy Carter’s Community Reinvestment Act.
The New York Fed chief, who acts as the Fed’s liaison with Wall Street, added that US-controlled mortgage giants Fannie Mae and Freddie Mac, which own or guarantee nearly half of all US single-family mortgage debt, should reduce borrowers’ loan balances to help stem the rising tide of property repossessions.
What is the administration’s response to this action?
Obama administration officials and leaders in Congress have resisted these measures in the past, in part because they have feared political repercussions. To be viewed as bailing out US borrowers is not as politically popular a position as cracking down on borrowers who purchased larger homes than they could afford, analysts have said.
“Look, we’re trying to basically convince people that we need to do things here,” Mr Dudley said. “There are feasible things that we can do here that can be successful and obviously it’s not in our power to do these things at the Federal Reserve, but to the extent that we can provide information, evidence [and] advocacy that makes people more comfortable this is the way to go, we think that’s what we can contribute to the situation.”
Redistribution is the means to convert the United States to Socialism. As more people “give up” and turn to government dependence, the consequences of elections whose outcome are dictated by personal gain instead of public virtue will become even more apparent.