Egan-Jones has cut its U.S. credit rating to "AA-" from "AA." Apparently, they don't think too highly of the Fed's plan to reinflate the housing market to the tune of $40 billion a month.

Peter Schiff isn\'t too excited about it, either.

It's official. We're now Greece.

Onward and upward,
airforce

There exists, historically, only one "cure" for an irreparable economic disaster like the one we are suffering today:

Epic WAR

IMO, the Libyan embassy killings are just rumblings, and we should expect more and greater FF ops.

Ouch! We knew this was coming and now its finally here. You boys wanna make any bets how long it will be before we start to see some stressful moments out in the streets?

I would wager, not very long.

I'm not the only one wondering just what Ben Bernanke hopes to accomplish with his "QE3." Hunter Lewis is wondering the same thing.

Printing money is one thing. Printing money and using it to buy toxic mortgages from banks is something else again. (If they were good mortgages, what would be the point?)

Or, he could just be buying himself a good job once his term as chairman is up. That would be incredibly corrupt, of course--but corruption seems to be the whole point of the Federal Reserve.

Onward and upward,
airforce

Airforce
Lets think about what in fact Bernanke is doing.
We have all come to understand that the Federal reserve Note is just an IOU between the United States of America Corporation and the Federal reserve bank.
The mortgages he is buying are in most cases not actual mortgages, but resale derivative packages, Which the original property has been resold up to two times to new owners with good paperwork and tracability. These mortgages were the basis of the 2008 bubble burst.
Thus we have a worthless mortgage being paid for with worthless money. This is a no loss situation since these derivatives are what is dropping the preceived value of the dollar.
Since the forgiveness of Mortgages is happening throughout the Fiat Money world due to poor control and separation of the property from the note how better to clean up the bogus scam and let Uncle Sam pay for it AGAIN. (880 billion Bush bailout.)
This will protect the restructured mortgages that the courts are enforcing from the court denying all mortgages.
Soon they will be able to say that all of the MERS Mortgages are gone, and the Fed will declare a bulk loss while maintaining a base of if not legal at least properly documented mortgages.

True, Safetalker, but all government actions to distort the free market have unintended consequences and, in this case, they're pretty easy to predict. First of all, Bernanke is reinflating the housing market - which is another way of saying he's creating a new housing bubble.

Bubbles don't last forever. At some point, they burst. Sound familiar? And I have to believe that even a committed Keynesian economist like Bernanke knows this.

The only thing I can figure is what Hunter Lewis suggested, that he also plans on using his printing presses to buy government securities that he can't sell in the auction marketplace. Nothing new there, either - that's what QE1 and QE2 were all about. the government can't sell all of the bonds it ants to sell? No problem! Just have the Fed buy them, with dollars it creates!

Of course, there is a price to pay for this. Your credit rating tends to get downgraded. Credit rating agencies know the only way out of this is for the government to turn off the printing presses and stick to a pretty austere (and constitutional!) budget, or create so much money and debt that no one will want either of them. (See Zimbabwe, Greece, etc.)

Bernanke is playing a dangerous game, hoping the president and Congress will do the right thing in time. He's a smart guy, so he must know the consequences if and when this whole thing suddenly goes south. But, as long as the Euro is inshambles, the Middle east stays in turmoil, and the Chinese government mismanages its own economy, he'll likely get away with it.

At least temporarily.

Onward and upward,
airforce

airforce1
You have to understand the path of the money. If you know that the Governmnet is going to run out of money on 30 September and will become insolvent you dump all of your toxic assets on that Corporation. SO the Fed being a shareholder of the Federal Government and not an agency cleans out it's holdings by shipping the derivative investment holdings to banks and then using treasury Notes buys all of them. This cleans the banks and ships the debt for them to the failing treasury. Then the Federal Reserve takes all of the Bank clear titles and sells them overseas to people with Gold. This gives them hard assets that can be placed in overseas holding banks in individual accounts.
You noticed that last week Obama issued a Proclamation that the Gulf was clean and disbanded the committees and funding for the region. The next stage is to take all of the land purchased by the Clean up corporations and sell it at pennies on the dollar to individuals with hard assets. These funds will then be used to pay the Federal reserve for the Treasury bills before the crash.
Then We the people will be responsibility for the debt. The States will be responsible for the cleanup and the Fed packs up and shuts down when the money ends.
Currently though the Fed has a 33 Trillion lien on it by the Original families who loaned it the money to get started. So we shall see.
If anyone has anything in paper they really should dispose of them asap before the doors close.

Want to know how we got into this mess? Well, here\'s one reason. Eric Holder and the department of Justice has just filed a complaint against a bank in Southern California for the crime of lending money prudently.

I'm not kidding.

Onward and upward,
airforce