If Fed Chairman Ben Bernanke honestly believes what he said at Jackson Hole on Friday — that he can save the economy by printing more money and buying more bonds — he’s hallucinating.
Through the first quarter of this year, he printed $1.5 trillion of paper money and promptly bought $1.5 trillion in mortgage bonds, government agency bonds, and Treasury bonds.
But the entire effort was a dismal failure; the U.S. economy is still sinking and most large American banks are still weak.
The underlying reason: While the government has been borrowing massively, nearly everyone else has embarked on unprecedented debt LIQUIDATIONS.
In other words …
FULL STORYWhile Washington is gorging itself on new debts, nearly every other sector is undergoing massive liposuctions.