Do the banks really need more money?

How much money is it going to take to realize that subsidizing our banking system isn't going to work? The government needs to step back and let these banks eat their own disease. Even though it may be painful in the short run, a stronger banking system with greater corporate responsibility will follow. There is talk going around that the United States government has to spend even more money on our banking system. With the Democratic administration about to be inaugurated on the 20th, there is no doubt there will be even looser policies and bailing out anyone who asks for it. There is already a rescue package for the automakers once the Democrats take office!

2009 is turning out to be a bad month for the stock market. Already the DJIA is down 9% for the year! Commodities have also fallen, with oil falling below $35 a barrel on "excessive inventory". It only makes sense to buy the commodities now, because once things start turning around, international nations such as China and India will be using the oil and base materials to rebuild their infrastructure. Furthermore, oil is way below the break-even point for many oil producing nations. The Canadian oil sands require a price of above $80 a barrel to be profitable. Precious metals have also taken a beating, but when the hyperinflationary effects of reckless government spending kick in the later months (it usually takes around 6 months for government intervention to be felt within the economy). In the coming months, we'll see the effects of TARP (enacted in October 08 for $700 billion) and the Citigroup Bailout (Occured in November 08 for $306 billion). And let's not forget the most important culprit: The Federal Reserve!

Here are some decisions from our good old Fed directly from their website:

January 12, 2009 Federal Reserve will offer $150 billion in 28-day credit through its Term Auction Facility today

December 29, 2008 Federal Reserve will offer $150 billion in 83-day credit through its Term Auction Facility today

December 15, 2008

Federal Reserve will offer $150 billion in 28-day credit through its Term Auction Facility today

December 1, 2008

Federal Reserve will offer $150 billion in 84-day credit through its Term Auction Facility today

November 24, 2008

Federal Reserve will offer $150 billion in 13-day credit through its Term Auction Facility today

November 10, 2008

Federal Reserve will offer $150 billion in 17-day credit through its Term Auction Facility today

November 3, 2008

Federal Reserve will offer $150 billion in 84-day credit through its Term Auction Facility today

October 20, 2008

Federal Reserve will offer $150 billion in 28-day credit through its Term Auction Facility today

October 6, 2008

Federal Reserve will offer $150 billion in 85-day credit through its Term Auction Facility today

Sept. 29 2008 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

September 16, 2008

Federal Reserve Board, with full support of the Treasury Department, authorizes the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG

September 2008: Federal takeover of Freddie Mac and Fannie Mae. $5.2 trillion in mortgages held by Freddie Mac and Fannie Mae.