Despite the preponderance of evidence that money printing doesn’t create jobs, Bernanke and his Central Bank colleagues continue to perpetuate the myth that the recovery is just around the corner, as long as we continue to print money. It’s complete and utter insanity as all it will accomplish is bankrupting the U.S. resulting in higher costs of living – and lower quality of life – for all of us. [Let me explain why I believe that is the case.]
So writes Graham Summers in edited excerpts from his original article* entitled The Fed Will Bankrupt the US Trying to “Create” Jobs.
[The following article is presented by Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Summers goes on to say in further edited (and in some instances paraphrased) excerpts:
The primary myth being perpetuated by the central banks of the world is the belief that loose monetary policy and money printing will lead to economic growth. They have cut interest rates…511 times since June 2007, and expanded their balance sheets by over $10 trillion…[but the fact is that] there is literally no evidence that printing money creates jobs. Look at Japan, they have and continue to maintain QE efforts equal to 40+% of their GDP and unemployment hasn’t budged in 20 years. The UK has engaged in QE equal to over 20% of GDP with no success.
Inflation Has Outperformed Job Creation
If you need further proof that money printing and inflation don’t create jobs take a look at the chart below from Bill King’s The King Report. The blue line is CPI. The pink line is non-seasonally adjusted non-farm payroll (jobs). [As seen below,] inflation has dramatically outperformed job creation in the last 50 years.
Since Bernanke took over at the Fed, the U.S. hasn’t experienced a single year of 3% GDP growth. All the talk of jobs coming back courtesy of the Fed is ridiculous. The employment population ratio peaked in 2000. Since that time jobs have not kept up with population growth, let alone grown. Indeed, all that has grown is inflation, the one thing the Fed is great at creating.
According to Harvard Professor Ken Rogoff inflation rose a mere 20% in the 138 years leading up to the Fed’s founding in 1913…but in the 100 years since then, inflation has risen by 3,000% and the U.S. dollar has lost between 96-98% of its value.
Despite the preponderance of evidence that money printing doesn’t create jobs, Bernanke and his Central Banker colleagues continue to perpetuate the myth that the recovery is just around the corner, as long as we continue to print money. It’s complete and utter insanity and all it will accomplish is bankrupting the US, resulting in higher costs of living…and lower quality of life for all of us.
Folks, there is no other way to put this: the markets are in a massive bubble and when it bursts, things will get ugly very FAST.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://gainspainscapital.com/2013/08/08/4075/ (Copyright 2013 Phoenix Capital Research, OmniSans Publish, LLC; All rights reserved; Sign up to receive our daily market commentary here.)
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