Banana Republic

The Federal Reserve Bank is buying US government bonds and mortgage backed securities.
What does this mean?
Usually the Fed adjusts interest rates and buys/sells short maturity securities. In this way it disrupts the market in its futile efforts to manage the economy to price stability and full employment. Remember when Bernanke’s predecessor, AGreenspan, lowered interest rates to result in a negative real cost of borrowing? The result was massive credit extensions and ultimately led to the collapse of many of our large banking entities. That “maestro” move was also for price stability and full employment.
Back to the present. The US Department of Treasury funds the government’s stimulus/bribe voters wasteful spending programs through the issuance and sale of US Treasury securities. The Fed is responsible for the nation’s money supply. When the Fed buys the US Treasury securities we can attribute that action to several possibilities. One, no other buyers are interested in the securities at the rates being offered. Two, the Fed is seeking to dilute the value of the dollar by printing and distributing dollars without an economic event occurring (see 3/16/2009 essay on Wealth creation.)
Is this Brazil? Is this Argentina? Is this Iceland? Is this Botswana?
What about inflation? What about the total politicization of the Fed. AGreenspan sure started it, Bernanke just plain does it as SOP. PVolcker, what the heck are you doing while the Fed is supporting Obama’s promiscuity? Who voted the Fed the power to print money under the canard of price stability? Where are the people’s representatives when government bureaucrats are acting like banana republic fools?
In the opinion of TheFundamentals, THE ONLY REASON THE FED BUYS US TREASURY SECURITIES AND US MORTGAGE BACKED SECURITIES IS THAT NO ONE ELSE WILL BUY AT THESE COUPON RATES. Stated another way, the risk is too high given the reward.
Citizens and taxpayers, we must remove these banana republic fools (congressmen, senators and bureaucrats) from office ASAP!!! They are destroying our wonderful country.