The first link below is from the USA Today, and it describes what now passes for “monetary policy” by the US Federal Reserve Board nowadays. What the Fed is apparently about to do is “buy $450-750 billion in Treasury notes or other assets.” This is called in many financial news articles as part of the Fed’s “QE2” policy, which for us laymen means the 2nd round of quantitative easing (another big expansion of the money supply in hopes that it will somehow boost the economy). This QE2 comes on the heels of the 2008 mega-bailouts of the Wall Street banks during the last few months of the Bush administration and what the first link calls another “$1.7 trillion in bonds starting in early 2009” (during the Obama administration’s first months in office).
There is a one major problem with these bailouts, easings, etc. The “money” that the Fed uses to buy all these US bonds doesn’t actually exist. The Fed has a charter as the central bank to “create money out of thin air” to buy these T-bonds that no one else in the world wants to buy. Some financial press articles call this “monetizing the debt.” What it means for John Q. Public down the road is big trouble. To put it in layman’s terms this is how I would characterize Fed policy right now. Since the US federal government is overspending its budget on an unimaginable level, it needs to issue incomprehensible amounts of T-bonds to “finance” this debt. However, there are nowhere near enough buyers in the world to buy up all this debt and foreign nations and investors are now shying away from buying an endless barrage of T-bonds which are not likely to ever be repaid except in inflated dollars at some future date. Therefore the Fed is creating “pretend” money which it uses to buy the T-bonds which no one else wants and the Fed and the US government will both keep their fingers crossed and hope that everyone in the world will agree to treat all this new “pretend” money as if it were “real” money. I am not the only one who sees this new Fed policy as extremely dangerous.
No less a source that one of the Governors of the Federal Reserve Board itself, Thomas Hoenig, is cited as calling this new Fed money policy as “making a bargain…with the devil.” That is very strong language. The second link, which is put out by the respected Weiss financial analysis service, refers to the new Fed policy as a “pact with the devil.” The second link also offers an analysis of what may occur after the elections when a huge conflict is expected between a Fed that is wildly expanding the money supply and a US House of Representatives dominated by newly-elected Republicans who will have austerity measures on their mind to rein in the out-of-control federal spending levels. The US economy and financial institutions could experience a major crisis if the “irresistible force” of the Obama administration and the Fed to recklessly spend and create more money collide with an “immovable object” in a new US House of Representatives which refuses to appropriate the high spending levels which the Pelosi-run House created without a second thought. This could lead to a shutdown of the US Government wherein we’ll see who blinks first. If the GOP wimps out and agrees to approve the recklessly-high spending levels of the Obama administration, it is very possible that the GOP may internally shatter as the Tea Party Republicans will never forgive their own leaders and the Tea Party forces might be forced to field their own candidates in the 2012 election (a possibility that the second link briefly mentions).
Anyway you look at this, the US ship of state is heading for uncharted waters full of unmarked shoals. The results of this process could lead to the destruction of the current global money system based on the integrity of the US dollar. When/if this happens, the biblical prophecy in Revelation 17-18 that the world’s global financial system will collapse in the latter days will be fulfilled. I very much hope that you have read (and acted on) the content of my article, Should Christians Prepare for Future Hard Times? It includes advice from FEMA regarding what items every family should stock up in the event a crisis hits their region. However, as we all know from what happened in the aftermath of the massive Hurricane Katrina destruction in several states at once, people need preparations for a lot more than just a few days when a truly major disaster happens. An economic/financial collapse would be like a major category 5 financial hurricane hitting all 50 states all at once. No one can predict when Revelation 17-18 will be fulfilled, but it will be fulfilled at some future point. Are you ready?