U.S. Federal Reserve Chairman Ben Bernanke has announced a new plan to stimulate the economy by using public funds to buy up toxic mortgage-backed securities. “Nobody else will buy this crap,” said Bernanke, “so let’s get the American taxpayer to do it.”
The Bernanke plan also guarantees that public funds will be made available to qualified borrowers at rates of between 0 and ¼ percent for at least another three years. To qualify, you must be a too-big-to-fail bank with at least $100 billion in assets and pay no taxes. “It would make no sense for banks to borrow from their own taxes, would it?” asked Bernanke.
RIGHT: Picture from ForexTV.com.
The Fed is also considering a plan to drop interest rates into the negative, i.e. to pay banks to borrow money. “Banks have very high operating costs,” said Bernanke. “Have you seen how much the CEOs and other executives get paid? This will help them make their payroll and pay back the loans, as well.”
The stimulus has already sent the stock market soaring, which will help those of us who own stocks and especially those who make a living from them whether the stocks go up or down. It will also benefit individuals and institutions that own toxic securities and are anxious to find anyone stupid enough to buy them.
Institutions that lend at higher rates than they borrow will also do well. Banks, investment firms and other financial brokers who profit by moving money from one place to another are expected to make a bundle.
Asked whether the stimulus will help to create jobs or raise the average income, Bernanke responded, “It’s not really intended to create jobs, and it won’t. But it will increase our national wealth by increasing the wealth of the wealthy.”
Increasing the wealth of the wealthy increases the average wealth of us all.
“It’s simple math,” he declared. “If you put Bill Gates in a crowd of 61,000 destitute people, their average wealth is one million dollars. Increasing the wealth of the wealthy increases the average wealth of us all. That’s democracy and the free market system at work.”
Asked where the money will come from, Bernanke responded, “From the poor and middle class, of course. They have so much money. The wealthy hardly pay taxes, and depend heavily upon subsidies from the poor. Otherwise we might lose the wealthy class, and how else would we create wealth?”