Government-sponsored institutions kill competition

History shows that a nation can not have competition without trust and confidence.

Government-sponsored institutions kill competition because they deliver no trust no confidence.

Government is a wasteful institution

Government is a wasteful institution.

Government is unable to understand the meaning of innovation, efficiency and flexibility.

Adding debt to debt.

Once short-term interest rates get to near zero, a key focus in such an environment will be to bring down long-term interest rates, which help determine the rates of mortgages and other debt instruments.

This would likely involve in practice the Fed buying longer-term Treasury bonds.

Such actions will not solve the problem but will merely compound it, by adding debt to debt.

Unintended, adverse, long-term consequences.

The efforts to prevent the market from disciplining excesses will have unintended, adverse, long-term consequences.

One legacy will be the existence of a large number of uncompetitive companies which will cause profit margins to fall for their more productive competitors.

Another consequence will be a long-term deflationary malaise, which will keep interest rates ridiculously low to the detriment of savers.

Bank disinterest in lending the money

The aggregate reserves of U.S. depository institutions have surged nearly 14-fold in the past two months.

The growth of excess reserves reflects bank disinterest in lending the money. This suggests the banks only want to finance existing positions.

The Fed can only control the supply of money

In the U.S., the Fed can only control the supply of money; it cannot control the velocity of money or the rate at which it turns over.

The dramatic collapse in securitization over the past 18 months reflects the continuing collapse in velocity as financial engineering goes into reverse.

The modern economy and the real world

Confusion, uncertainty, doubt, distrust, distrustfulness, incertitude, misgiving, mistrust, mistrustfulness, skepticism and suspicion,

That is the modern economy and the real world.