The "pathological" Fed and the boodle state.

John Butler speaks of the "pathological" Fed.^[1] Not a bad description considering that it's deliberately pursuing inflation and consequently won't be happy about a dollar strengthening because of war trumpets in Korea and Eurozone financial problems.

Some government, if you happen to think that sly, gradual theft of value from Americans is no different from purse snatching. Oh, wait. The Fed's a private entity.

More:

Those words [1,000% inflation since creation of the Federal Reserve System and a Fed designed to protect large banks not purchasing power of the dollar, inter alia] were spoken by [G. Edward Griffin, historian and author of The Creature from Jekyll Island] some twenty years ago. They are even more relevant today, following the Fed’s disastrous, serial bubble blowing activities of the past two decades, the colossal buildup of global economic imbalances, the exponential growth of the money supply and the federal debt, the monumental moral hazard of bank bailouts and most recently, the beginning of the next round of Fed balance sheet expansion known as QE2.

* * * *

For many, “Market Failure” is blamed, in whole or in part, for the great financial crisis of 2008, which stubbornly refuses to go away. Yet we completely disagree with this line of thinking. Indeed, the truth is the exact opposite. We call it “Regulatory Failure”.^[2]

Mr. Butler has some very interesting ideas on alternatives to heroic efforts to shore up a political house of cards. The default alternative for Ireland is hugely attractive, I'll say rather cavalierly, for its potential to throw a monkey wrench into the corrupt machinery of the modern state.

For a country like the U.S. that can print money he argues that quantitative easing(s) are a way for the U.S.G. (or our corrupt political class) to avoid the unpleasantness of default (by servicing of "our" sovereign debt with dollars we ourselves have debased). This, he says, is the explicit purpose of quantitative easing.

Straight out default would stick it to investors hoping for taxpayers to be the ultimate guarantors of their debt. Inflation, of course, sticks it to all citizens, but that appears to be what is in the cards for us. Monstrous spending bills recently disgorged into the legislative hopper and hysterical Dem confusion over taxing "the rich" and their cheap class warfare over the estate tax suggest that doing anything sensible about the "production" side of things isn't likely to make it to the top of the national agenda any time soon.

I don't relish the pain that is almost certain to result from the next two or three years. It is interesting, however, to observe how the political and economic irresponsibility and immorality that are so imperfectly addressed in elections are being minutely and precisely addressed in the financial realm. The bill is being presented in a hundred thousand different ways. Ten million or a hundred million spreadsheets are inexorably telling the same story over and over again that punishing producers, rewarding parasites, and worshiping the God of Pork isn't something that sane people do.

Sane people are defamed as racists, nativists, fascists, extremists, the greedy, the rich, the privileged, and the like but the hysteria on the left is a sure indicator reality is gaining ground. The long nightmare of the boodle state is about to be over. Maybe measured in dog years but, still, over.

Notes
^[1] "A Century of Money Mischief and the Rising Sea of Debt." By John Butler, The Amphora Report, Vol 1/14, December 2010, republished at Financial Sense Online, 12/6/10. Highly readable and recommended.
^[2] Id.