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Change is on the way and it won’t be good

“Another crisis could be looming,” the Viewpoints lead article of Jan. 6, is an economic Hurricane Sandy warning to the public. William D. Cohan’s description of the Federal Reserve’s policies doing more harm than good is highlighted by the Jan. 7 announcement in Marketwatch that “liberal economist Paul Krugman joined the calls for the U.S. to mint a $1 trillion platinum coin as a way around the debt ceiling.”

Cohan’s review of a zero-interest rate policy should include the reality of real rates of return on currency or equivalents where, after taxes and inflation, the returns are negative. There are some in society who can, for awhile, earn a positive return, but are at increasing global risks of loss from today’s currency wars. This leaves out the average wage earner who lives paycheck to paycheck, as well as the considerable societal aggregate living on a fixed income.

The election between President Obama and Mitt Romney offered no real choice to the public because the former is a Washington insider and the latter is a Wall Street insider. Cohan’s review of Central Bank policies shows there is no practical difference between Wall Street and Washington. This was clarified when Sen. Charles Schumer told Chairman Ben Bernanke: “do your job.” Bernanke dutifully has turned from his spring “no more quantitative easing” to purchase of $85 billion a month of government securities to further diminish prospects of any storehouse of value earmark for U.S. currency.

In terms of growth, jobs and wages, it will take many, many of those fictional $1 trillion minted coins to produce significant results, but the real return will be so negative it will not be worth the effort. Change is coming, but not what Bernanke, Krugman, Obama and Congress want. It’s called a hyperinflationary depression, which is now a probability to be considered.

David R. Conners

Eggertsville