The Fed

Bernanke and the other macro wizards will just so happen to find that their models point them toward bailing out the major bankers and other politically connected titans of finance.

"Through Fed monetary policy, the dollar is cheapened to produce an economy on steroids that eventually breaks down."

The only really good trends exist in two worlds right now. In the digital world, we see growth and expansion and progress. This sector is not as heavily hooked up to manipulations of the Keynesian elite, and its development has proceeded at a clip even in a depression.

By whatever name you call it, this massive "pump priming" by the US monetary authorities will engender exactly the same results it always has: malinvestment, dollar debasement, and speculative mania.

Bankers can spend their interest payments on real goods and services, thereby returning that money to the public, which can then use it again for further debt payments.

This is the sense in which our fiat-money, fractional-reserve system uses "debt-based money."

"Under deflation, it is those non–wealth generating activities that end up having the most difficulties in serving their debt, because these activities were never generating any real wealth and were really supported or funded, so to speak, by genuine wealth generators."

Knowing that the Fed now holds the most toxic of the subprime assets the banking system could create during the roaring 2000s should leave us with some concern.

It doesn't make the country richer when politicians spend money they don't have.

"Contrary to Krugman and other commentators, we suggest that the best economic policy for the Fed and the government is to do nothing as soon as possible."