Oil Shock: Banksters Ready QE3 Asset Bubble

Posted: March 8, 2011 in Economic Crisis, US News

Kurt Nimmo
March 8, 2011

On Monday, Atlanta Fed boss Dennis Lockhart said that if oil prices continue to climb the Fed will make a new round of asset purchases, in other words it will kick off QE3.

“If [the rising price of oil] plays through to the broad economy in a way that portends a recession, I would take a position we would respond with more accommodation,” Lockhart said at the National Association of Business Economics in Arlington, Virginia.

Lockhart said the magic number for the price of oil is in the range of $150 per barrel. “I think at the $120 range … it’s a manageable level,” he said. “Around $150 it becomes a much more serious concern.”

Lockhart “echoed widespread concerns that surging oil prices would put the brakes on a recovery that only just seems to be taking hold,” reports the Wall Street Journal. “With Brent crude hovering at around $115 a barrel, having made at stab at $120 over recent sessions, investors are looking back to the summer of 2008 when oil made a run at $150 a barrel.”

In response to the unfolding economic depression last November, the private Fed announced plans to buy $600 billion in long-term Treasuries, known as quantitative easing. QE2 – and now possibly QE3 – do nothing for the broader economy, however.

The provided excuse for cranking up the funny machines and printing a ton of fresh new fiat dough is that it boosts the economy. In fact, the scheme does nothing for the larger economy or the nation as a whole – infrastructure projects, education, health care, business development, etc. – as you might expect (if you follow the Fed’s reasoning). Instead, it is a gift for the financial industry and the banksters. The excess paper money flows into the stock market and creates dangerous asset bubbles around the world.

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