October 7, 2008 (LPAC)--Never you mind that the $1 trillion that the Fed announced last week it is pumping into the global financial system is not working at all to stop the global financial meltdown. Fed Chairman Ben Bernanke is not one to back down in the face of obstinate reality. "The Fed's not done yet," former Fed Governor Lawrence Meyer told Bloomberg proudly. "They're going to try to leapfrog ahead and do something even more dramatic." "The Fed will pull out all the stops until something starts working," Michael Darda of MKM Partners concurred.

As Lyndon LaRouche stated categorically today: “Clinical insanity reigns in New York and London.” Today's known list of insane hyperinflationary measures adopted by the Fed includes:

• The Fed has invoked emergency powers to establish a new unit, funded by a deposit of the Treasury at the NY Fed, which will buy up an undisclosed amount of unsecured commercial paper, which businesses are no longer able to sell to banks to fund their daily operations. In fact, the commercial paper market has fallen to $1.61 trillion, its lowest level in three years, as the money markets have ground to a halt.
• The Fed's decision yesterday to pay interest on banks' overnight deposits with the Fed, amounts to a "stealth cut" of .75% in the interest rate, according to Bloomberg. "The Fed may now pay interest on bank reserves while it floods financial markets with liquidity, pushing down the overnight lending rate by about 0.75 percentage points to 1.25 percent." But it's not working. Banks are parking the money they borrow from the Fed right back in the Fed overnight.
• There are insistent international reports of an imminent decision by the world's central banks, led by the Fed, to jointly slash interest rates even further. Today, Australia dropped its interest rate by 1%, double what was expected, which was taken by desperate financial sharks as an indication of the impending coordinated action.