The single most significant event in this entire economic crisis took place Wednesday and it has gone nearly unreported, or, when reported, reported in such vague, generic, terms that what really took place would never be noticed. Today, the Federal Reserve...damn, just lost 90% of my readers...as I was saying, the Federal Reserve and the U.S. Treasury together created $1 trillion out of "thin air." Cool trick, too bad it has horrible consequences for you and I.

The Federal Reserve "purchased" $1 trillion ($1,000,000,000,000.00) of long-term Treasury bonds from the United States Treasury and said it would buy another $300 billion over the next six months. "Wow," you say, "I had no idea the Federal Reserve had that much money sitting around to buy $1,300,000,000,000 worth of Treasury bonds. You silly sheep. You think the rules that apply to you and me, the rules of common sense, the notion of fiscal responsibility, apply to the buffoons in Washington who are driving our nation into the ground? Of course not. The Federal Reserve "purchased" the Treasury bonds with an accounting entry. No money...not a cent...was given to the U.S. government in exchange for the government (you and me) handing over $1 trillion dollars of bonds backed by the full faith and credit of the United States.

"Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air." Source.

So what's the effect of essentially printing $1 trillion dollars and shoveling it out the door of the Treasury Department?

"But there were also clear indications that the Fed was taking risks that could dilute the value of the dollar and set the stage for future inflation. Gold prices rose $26.60 an ounce, hitting $942, a sign of declining confidence in the dollar. The dollar, which had been losing value in recent weeks to the euro and the yen, dropped sharply again on Wednesday." Source.

The amazing thing, 99% of the reporting on this just mentions the "purchase" of the treasury bonds without stating the most important part that the treasury bills weren't purchased with any money, making it all equivalent to the government just turning on the printing presses and spitting out $1 trillion dollars.

If the government's jack-booted thugs broke down your door, put a gun to your head, and took 1 to 3 percent of your money and, at the same time, forced your employer to pay you 1 to 3 % less...that might make the news. But, if the government does that to everyone by tapping away at a keyboard for a few seconds...silence.

What's been the non-stop, around the clock, news coverage today and this week, the AIG bonuses of course. Given that the total bailout commitment is currently $11.6 trillion and the AIG bonuses total $165 million, does it really make sense that all the news is focused on just 0.000014% of the total outlay? Obviously not. Why then is the news focused on such a silly minuscule subject? Two reasons: to distract from the real issues (fault and mismanagement by the Democrats) and to promote the liberal inspired "class envy" to help usher in further "reforms" in the march toward socialism.

Don't believe me? Well, we now learn that the "Administration Seeks Increase in Oversight of Executive Pay":

"The administration has been considering increased oversight of executive pay for some time, but the issue was heightened in recent days as public fury over bonuses spilled into the regulatory effort." Source.

Let me translate: The Obama administration has been looking for an excuse to push their socialist agenda of taking over and controlling private companies, and with the aid of accomplices in the Democratically controlled Congress and the liberal mainstream media, have stirred up in recent days wealth envy over contractually obligated pay packages that Sen. Chris Dodd specifically exempted from the AIG bailout in the "Dodd Amendment" because AIG bought off the lying corrupt politician giving him more campaign contributions in 2008 than anyone else.

Liberal inspired wealth envy that everyone has the right to a home as big and beautiful as they want is one of the reasons we're in the mess we're in right now. Instead of learning from this, the liberals keep pushing the doctrine of wealth envy in hopes of propelling us towards their socialist utopia/nightmare. They don't even bother to hide it anymore, as Obama said: "Out of great crisis comes great opportunity."

We now learn that "Obama's budget will produce $9.3 trillion worth of red ink over 2010-2019."

"Worst of all, CBO says the deficit under Obama's policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level." Source.

In plain English, "unsustainable" means that Obama is putting us so far into dept that there will be no way to get out of it. Our nation's economy will completely and permanently collapse.

I also thought I'd mention that China is now asking the United States government to "guarantee the security of Chinese assets," those assets being the hundreds of billions of dollars of treasury bonds they own, you know, just in case our country goes under. Now what does our government have to guarantee those bonds with...only one thing...land.

Read this article. It was written more than a week before this week's revelations and essentially asks the question, if Obama were trying to destroy our country, what would he do different? Answer...nothing!