the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Nov 8, 2010
The day after the November election, the U.S. Federal Reserve announced that it will pump 850 billion to 900 billion dollars into the banking system over the next eight months. This is nothing new. The Fed had already pumped two trillion dollars into the banking system earlier this year.
The Fed pretends this will “spur economic growth” by making credit cheaper, encouraging business investment and consumption. In reality, the Fed is simply creating huge amounts of money out of thin air and lending it for free to the banks.
The banks certainly are not providing money to business for further investment. Even the banks admit it. “Firms continue to cut back on their capital expenditures and R&D outlays,” analysts at JP Morgan Chase wrote in a September report. Neither are the banks providing cheap credit for consumers and stimulating consumption. They are squeezing consumers by slashing interest rates for depositors, while boosting fees and penalties.
No, that free money from the Fed will not “spur economic growth.” Big investors use it to increase their wealth through more wild speculation. That’s why the prices of stocks and commodities – like precious metals, oil, cotton, wheat – suddenly went through the roof. Lately, big banks and other speculators have also been buying up massive amounts of farmland.
With the help of the Fed, the capitalists are blowing up new speculative bubbles that will inevitably crash and create more havoc in the economy.
The aim of the Fed and the U.S. government as a whole is to protect the profits of the bourgeoisie and to serve their every need – at the expense of the rest of society.