FED to Publish Market Predictions (and Save the Economy)

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Bernanke presents state of the economy

Ben Bernanke Makes Big Decisions About Economy

What is the Fed Doing?

The FED has announced their insider market predictions for the world’s markets would be published on January 25,2012 and periodically afterwards.  This landmark act would put the FED’s view on every field, from property sales to stock options, in the hands of the investors.  These projections are some of the most reliable in the world.  This publicizing of information is designed to prepare firms for future turns of the market and inject faith in the financial sector into the capricious investors.  Hopefully, this will kick-start a financial boom.

Why is the FED publishing its reports?

The Federal Reserve is hedging against financial busts.  Busts in the stock market rapidly dissolve trillions of dollars in just days.  The Federal Reserve System, the central banking for the United States, is designed to prevent such catastrophes.  In recent years they have been successful in mitigating busts; however, they have never been able to prevent them.  The FED is attempting to build a new, innovative barrier against sell offs with by posting their predictions: trust.

Why does trust matter?

Trust is essential.  Investor’s careers revolve around moving money.  They buy up capital, which is anything from stocks to beach condos, and sell it once it reaches peak value.  Then they repeat the process.  This simple cycle is the basis of Wall Street.  When inventors do not have faith in the market problems multiply.

Nervous investors sell off in droves at the least opportune times.  This can create market failure, instantly obliterating massive quantities of capital.  By selling off hastily these investors are wasting value and are actually hurting the value of their capital.  Investors that trust the market do not sell off capital until the time is right.  This builds up the market and has allowed the financial sector to prosper.

Through publishing its own facts and figures the FED is injecting trust into Wall Street.  By predicting the trends across the market the FED is allowing investors can acclimate to bends and dips in their projections before they arrive.  Before, capacious investors would be sent into widespread sell-offs at the slightest worry.  The FED hopes that their own figures will calm fears in tumultuous times and weaken the gravity of these sell offs.  The FED is coaxing the investors into a much more reliable rise-decline market cycle which is greatly preferable to the destructive boom-bust cycle we have at present.

Why has the Fed not published it’s predictions before?

They were afraid they could be wrong.

Predictions are never perfect.  Even in the best of times the finest analysts in the world can only make guesses about the state of the market in the near future.  The further out projections plan the less reliable they are.

Previous FED officials were concerned that unforeseeable fallacies in their predictions would disrupt the markets.  Black swans, events which are both highly unpredictable and highly destructive, could tear asunder all predictions and undermine the credibility of the FED.  A loss of trust in the FED, perhaps the single largest force in the world of investing, would result in financial armageddon.

Will this action jumpstart the economy?

Yes.

The finicky investors need this trust to be prosperous.  Before the 2007-2008 Recession the market moved gracefully, positive trends of perhaps a few points per day provided good steady investments for everyone.  Today, it is unsurprising for the DOW to jump over a hundred points in any direction.  This is bad; it jeopardizes the market because with this capricious behavior no investment is safe.  Investors are damaging the market with short sell offs and ragged growth rather than cultivating it.

The FED is pushing the markets back towards the stable growth with their predictions.  Investors will have a baseline prediction to affirm their own predictions.  In addition, the projections of the FED will become self-fulfilling prophecies.  If investors are told the markets will get better they will prepare their own assets for just that eventuality, in doing so they will prepare the market for the FED’s plan of growth.  This move will propel the economy in the right direction.

What is “Occupy Wall Street?” : The American Variant of the Arab Spring & The Origin of the Second American Revolution

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Occupy Wall Street Protesters Arrested For Campaigning For Basic Human Rights

It should be noted that the Arab Spring flared in America on September 24, 2011 and has since burned brightly, lighting downtown New York City while singeing Chicago, Denver, and Los Angles.  This global revolution has taken the form Occupy Wall Street here in America.  They campaign for ethical reforms for majority of the population, which are needed to combat the unconstitutional and immoral actions of the richest 1% of the population.   In the words of Michael Moore, “Something has Started.” This is the beginning of the Second American Revolution.

What are the Occupy Wall Street Protestors Moving to Accomplish?

They want to enact economic and judicial reforms on a national scale.

They are campaigning against a broad range of failings that have hurt the American public.  Several important issues are combating corporate greed, unshackling union’s collective bargaining rights in Wisconsin, and overturning Citizens United v. Federal Election Commission, a Supreme Court Decision that gave corporations the right to invest unlimited funds in political campaigns.  Many demonstrators believe the financial sector, embodied by the Wall Street Stock exchange, to be at the heart of these problems.  This is why ground zero for Occupy Wall Street is in New York City; they really just want their voices to be heard in the increasingly polarized and glaringly corporate political battleground.

Will They Be Successful?

Yes.

Their protest is the American manifestation of the Arab Spring, which has uniformly been unstoppable.  The trend with this sociopolitical titan has been that nations either meet the demands of the populace or inevitably fall to rebellion.  These protests will be historically noted as the beginning of either one or the other in America.

The Arab Spring has already been felt around the world, from the revolting Arab nations successfully completing revolutions, British looting of London, and Greek riots spreading anarchy.  Everywhere people are revolting against the same issues, only the names and places are different.  It is likely historians will it call the Jasmine Revolution, after its original name with the fiery startup in Tunisia.

These initial protests may not be successful, perhaps doing little more than slowing a few investors commute.  What is significant is that Americans are mobilizing not against any specific issue, but instead against the decaying economic order.  They are protesting the schism between the astounding wealthy and the numerous poor.  This is similar to other “Jasmine Revolutions.”

How Does Occupy Wall Street Resemble the Arab Spring?

Occupy Wall Street, which can be identified as a public organization for economic reform, bears striking similarities to the origins of most Arab Spring revolutions.

The Tunisians, the first pioneer of the Arab Spring, say their revolution was sparked by “unbalanced economic growth” as well.  Egyptians revolted due to, “rising food prices, high unemployment, and the corruption that pervades economic life in the region.”  Yemen is on the verge of a regime change, because of a widely corrupt government and major “economic grievances.”  With the exception of the corruption, all of these concerns are prevalent in every region of the United States.  The maldistribuiton of wealth and resources in America parallels those of the revolting Arab States; it was only a matter of time before distraught and jobless citizens took action.

Why Has There Been Police Brutality?

I would like to make note that while there have been a few occasions, including one incident involving dangerous use of pepper spray and others where police aggressively arrested unruly protesters, on the whole Occupy Wall Street has not suffered from unexpected amounts of police brutality.  This is a large-scale, well covered protest; incidents of this nature happen during such demonstrations.   It could be much worse and much more violent.  These cases of controversial police aggression are regrettable results from the patriotic activism of the protesters going beyond conventional terms of engagement.  These protesters knew the risks when they decided to stand up for what they believed in.  The policemen are simply doing their jobs; I would not judge them too critically lest they desert our popular cause entirely.  Everybody knows they did wrong, all we can hope is that incidents do not persist.

Reforms, Annexations, and (Booming) Commerce of America: How Progressivism at Home and Imperialism Abroad Forged the United States Superpower

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Countries rely on both on strong private and public sectors to create a prosperous economy.  An unbalanced economy threatened the United States at the beginning of twentieth century.  Only after aggressive trust-busting and progressive reforms did the nation become hospitable to rapid development of new businesses and industries.  Imperial polices secured grand markets for American industry to exploit and proliferate.  Government regulation and global imperialism empowered the American economy to become the largest and most influential in the world.

Solving domestic issues laid the groundwork for an expanding economy.  During the late 1800’s political machines and trusts conspired together, forming indomitable alienated fair markets and new businesses.  The economy was stagnant.  Progressives across the nation’s state governments led initiatives the against conglomerates; they instated a fair tax structure, expanded public infrastructure, capped work hours, acquired government utilities, and passed the Seventeenth Amendment.  President Roosevelt capitalized on these gains, trust busting the largest oligopolies, arbitrating strikes, and placing federal regulations on railroads, foods, drugs, and false-advertising.  Later, President Wilson forged ahead against hostile business practices; the Clayton Antitrust Act of 1914 was designed to fragment the remaining monopolies, his Federal Trade Commission eliminated unethical businesses practices, and a revolutionary federal income tax funded an expansive American government.  The waves of progressivism across the government allowed the nation’s leaders to break up bad trusts and allow a diverse American industry to prosper.  Aggressive imperial policies abroad only encouraged this crucial development.

Invasive foreign policy secured markets that would fund the American economy for decades.  Hawaii was annexed and made into a state to make agricultural trade viable.  Old Spanish colonies across the globe were taken by American troops during the Spanish-American War.  These captured markets bolstered the American economy; United States businesses were safe to proliferate behind a high tariff wall and favorable geopolitics in theses territories.  The Roosevelt Corollary staved off European intervention in the Americas by declaring that any foreign interference in Latin America would be policed by the United States.  These kept foreign competition from venturing too close to America, as business of the United States traded with their neighbors at excessive gains.  Industry boomed as the world came to rely on the superpower status of the American economy.

The American government put the United States’ economy in an advantageous position whose gains were compounded by fortuitous international events.  Strong economic policies domestically allowed numerous companies to spring up and become profitable in the isolated American markets.  Two world wars leveled the competition and made America the bread basket and industrial superpower of the world.  With these positions came unimaginable wealth.  By the close of World War Two America had escaped the global carnage and emerged largely unopposed for economic dominance.  America grew an indomitable economy based on strong regulations domestically and invasive imperial polices to exploit new markets.   The nation would only suffer an economic collapse only ensued after corporatist politicians approved legislation stripping back these domestic reforms, accomplishing everything from consolidating oligopolies on Wall Street and banning basic human rights like collective bargaining in Wisconsin.  In addition, modern America would become entrenched in endless and fruitless wars, fought on specters like drugs and terrorism, which alienated new markets and narrowed the possibility of new business opportunities. America is currently backtracking, and will continue to backtrack until the reforms of the last century are reinstated.

The CFTC (Commodity Futures Tragedy Commission) and the Oil Bubble Bursting (All Over the American Economy)

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Car fire Freshfield road  09/01/2006 05:06
Pictured: The American Economy in the Aftermath of the Oil Bubble

Today, crude oil prices fell by a pay jaw dropping four percent; the cascading effects through the international economy will reduce all costs and prices in a few short weeks.  However, the damage by the four month oil bubble has already culminated and several destitute developments.  Americans have been saddled with a devalued dollar and increasingly reckless investors.  Inflation during the oil bubble drove up prices and despite energy costs decreasing all other prices will remain high. Wall Street traders first drove the price of oil up through over eager investments and now are backpedaling at record rates as the economy suffers a stinging blow that could result in a double dip recession.  The Commodity Futures Trading Commission, who monitors this market, not only allowed this financial disaster to happen but openly encouraged it in defiance of Congress.

How Did the Oil Bubble Devalue the Dollar?

In the past couple of months wrenching transportation costs caused by the oil bubble drove up energy prices around the world.  When transportation costs rise sellers of goods have to raise prices in order to stay profitable; this drives prices for goods across all markets.  The rises in rapid inflation.  Despite the costs now dropping the dollar has already been devalued; prices will remain higher than before the oil bubble.  This distressing fact manifests in every developed nation, as the latest paychecks will be worth a little bit less and economic slump will sag a little bit more.  The United States will be hit worst by this crisis because nearly all OPEC reserves are traded in American dollars.

What Do Wall Street Traders have to do with the Oil Bubble?

One of the largest markets that investors gamble in is futures.  This financial system acts like a delayed contract.   Businesses generally buy products with money in normal transactions; futures allows those same contracts to be used on goods produced in the future, sometimes before they are even produced.  By speculating on the price investors beat the market rate and make small fortunes.  The problem with this process is that these contracts can be bought multiple times and each time the price of the gas rises to balance out the cost to obtain the future.  To further compound the issue third part investors can bet on the contracts as well, driving energy prices up over 40% of their real value.    This drives up energy prices, along with every facet of the economy, at record rates with bounding inflation.  Once these investors realize their futures are overvalued they rapidly sell off them, resulting in 4% dip in crude oil prices today.

Why Was This Harmful Speculation Allowed?

Senator Bernie Sanders, a prominent socialist from Vermont with one of the most progressive stances in Congress, outlined how this financial debacle endangered the United States and how it could have been easily prevented.  The Commodity Futures Trading Commission, which is supposed to monitor, was given strict speculating limits to prevent this exact scenario.  While energy prices would have risen they would have not bubbled and busted catastrophically.  However, the CFTC deliberately disregarded its duties, not implementing Congress appointed restrictions on the futures market. Corporatist leadership within the Commission is having its hand forced by Congress as a bill is being passed that will force this government institution to do its job.  These reactionary measure will prevent this type of bubble from forming ever again, if administer properly.

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