It is obvious that the Federal Reserve (the Fed) is largely to blame for the current debt bubble by manipulating the price and supply of money and infusing large amounts of liquidity into the free market while keeping interest rates much too low, for much too long. According to economist Barry Eichengreen of the University of California at Berkeley and Kevin O’Rourke of Trinity College, of Dublin, the current global recession began in April 2008. Below is a black box graph (the Millennium black box module from AIR software allows one to plot weights for aspect for any time span using any type of predictive technique) indicates the dates and the effect of each planetary transit to the natal chart of the Federal Reserve.
Based on results of the Blackbox Module graph, it is obvious that the Fed is completely blind to the catastrophe heading its way. The National Debt now exceeds $12.2 trillion. The fiscal 2009 Federal budget will have a deficit of more than $2 trillion and incoming revenue will make up less than half of that. Although Treasury Secretary Geithner claims the deficit will be reduced, the Obama administration has stated that a $1 trillion annual budget deficit is to be expected for the foreseeable future. Currently the U.S. Treasury has insufficient capital to fund the deficit beyond revenues of $2 trillion that it has to raise by the end of the fiscal year (09/30/2009)!
As the Fed continues to monetize (create money out of thin air!) trillions of dollars:
- 77 bank failures nationwide have occurred, since the start of the recession in 2008.
- Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression! (The last time the government’s revenues were this severely deficient was 1932.)
- The U.S. government is running a 13% fiscal deficit-to-GDP ratio.
- A wave of municipal defaults is in progress as many cities and states are on the verge of bankruptcy. For example, California may go bankrupt, causing the municipal bond market to grind to a halt (municipal bonds have been seen as a very safe investment with less than 1% of municipal bonds defaulting since World War II), bringing public works and spending to a halt, causing a major drop in GDP.
- The commercial real estate sector is collapsing due to widespread overcapacity of major retail chains, shopping malls, and strip malls, as the market to refinance trillions of dollars of debt obligations has practically closed, resulting in canceled expansion plans, increasing job layoffs, and declining tax revenue.
- The Option Adjustable Rate Mortgage explosion is under way as home prices continue to drop and refinancing will not be sensible for banks and mortgage lending intuitions.
Yet, Federal Reserve Chairman, Ben Bernanke, seems to be confident that the Fed can land the recovery and prevent runaway inflation, by reducing the monetary base before it floods the economy. Will this be so?
Continue reading Federal Reserve Forecast 2009-2011 at www.williamstickevers.com/PredictFedReserveForecase09-11.html