The Fiscal Cliffhanger

Henry Makow Ph.D. – Dec 12, 2012

The day after Obama’s re-election, the stock market had a nasty sell-off which continued for another two days. The prospect that Obama and the GOP would not resolve the “fiscal cliff”, and spark a recession caused a panic.
Since then, a Prozac-like state has set in. In spite of the fact that there has been no progress  on the impasse, the stock market has powered higher almost every day. It doesn’t do this in the best of times. Are investors being set up? 
Either the market has decided that the GOP is going to cave and the “fiscal cliff” is no longer of concern, or it is dangerously out-of-touch. 
Either way, there is an eerie degree of unanimity and complacency about serious budget and debt issues that have caused major panics in the past. 
Perhaps the complacency is due to the “Fed” injecting $85 billion into the US economy each month or a trillion a year. Where does this “stimulus” money come from? When the Fed creates money, it goes on the tab of the US taxpayer
Is it possible that while lawmakers are trying to cut debt, the Fed is increasing it by a trillion a year? Do we have a case of the government pressing the brake pedal while the Fed is pressing the accelerator? I rely on those more knowledgeable than I to explain.


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