[Concerned1]

The following is a segment of an excellent article:


Conversations With the Clueless; (a discouraging look at where the Fed is taking us):


NEW YORK, March 11 -- The Federal Reserve took bold action Tuesday to revive the economy's ossified credit markets by offering to take over the risk of spurned mortgage securities, igniting a rally on Wall Street that sent stocks to their best performance in five years.

It annoys me when a national newspaper, ostensibly of some repute, characterizes an inflationary printing of money as bold action. It’s not. Bold action would be letting the fraudulently inflated markets take their well-deserved bath, while still preserving the value of the dollar. That's the job of the Fed, defending against inflation and supporting the dollar.

Ben Bernanke has failed miserably at both. I don’t damned doubt a rally was ignited, as Wall Street dodged another bullet and went out to celebrate.

When your securities stink so badly that no one will touch them, it’s a relief to have the Fed come along and haul your ashes. Ossified indeed. The credit market is road-kill, lying there with all four legs in the air, body swelling with the rot of gigantic fraud.

Setting aside earlier reservations, the Fed essentially made itself the lender of last resort to investment banks squeezed for cash by offering them up to $200 billion in new credit against their holdings of highly rated mortgage securities that no one else is eager to buy. This move, coordinated with four other central banks, was the most aggressive step the Fed has taken to address the spreading credit crisis.

Nice try, Tse and Irwin, but no home run there either. The Fed has not made itself lender of last resort, it has made the American taxpayer lender of last resort, without ever checking in to see if it was OK. The Revolutionary War was begun over just such an issue. Christ, that argument was over tea.

http://www.opinion-columns.com/praguewriter/2008/03/index.html