Beating a dead horse...

Record Low Mortgage Rates, A Record Low Federal Funds Rate And Obscene Economic Stimulus Spending Have All Failed - Will Nothing Stimulate This Dead Horse Of An Economy?

So is the Federal Reserve out of ammunition? Well, let's just say that they have used up all of their "best" ammunition. The Fed has been telling us since March 2009 that the federal funds rate will remain between zero and 25 basis points "for an extended period" of time, but the U.S. economy doesn't seem to care.

Of course Ben Bernanke insists that the Fed is not out of ammunition and that everything is going to be okay, but at this point there is just not a lot left of Bernanke's fading credibility.

The U.S. government tried to do their best to help the economy by passing stimulus bill after stimulus bill, but it just has not helped much. The government spent hundreds and hundreds of billions of dollars on some of the most wasteful things imaginable, and while the massive injection of cash may have helped temporarily stabilize the economy, it has not brought about the "recovery" that our politicians were hoping for.

Now the pendulum has swung the other way in Congress and there is very little appetite for more economic stimulus spending. But if the economy was not recovering when the government was throwing giant piles of money at it, what is going to happen as the economic stimulus totally dries up?

Already there are signs that the U.S. economy is in big, big trouble. General Motors announced this week that U.S. sales in August fell 24.9% to 185,176 vehicles from 246,479 vehicles in August 2009.

But don't let up and down sales reports fool you. One month they may be down and the next month they may be up a bit. The important thing is to keep your eyes on the truly disturbing long-term trends.

Thanks to the nightmarish U.S. trade deficit, far more wealth leaves the United States each month than enters it. That means that the United States is getting significantly poorer each month. As I noted yesterday, the United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States. That is not sustainable and China is going to continue to bleed us dry for as long as we allow it to continue.

In addition, the United States continues to go into more debt every single month. Each month the U.S. national debt gets bigger, state governments go into more debt and local governments go into more debt.

So what we have is a nation that is getting poorer and that is going into more debt month after month after month.

We are on the road to economic hell, and the American people don't even realize it because things are still relatively good - at least for now.

Link:
http://theeconomiccollapseblog.com/archives/record-low-mortgage-rates-a-record-low-federal-funds-rate-and-obscene-economic-stimulus-spending-have-all-failed-will-nothing-stimulate-this-dead-horse-of-an-economy