LeeW1115George W. Bush stirred up international outrage last week when his memoir Decision Points revealed that he ordered waterboarding for three 9/11 terrorists. As Barack Obama and the Federal Reserve prepared to waterboard the world economy with 600 billion new dollars prior to the Seoul G-20 meeting last week, the president drew harsh international criticism too for the financial chaos his monetary team is creating.

Obama’s financial waterboarding victims include the following:

Emerging market economies—The Federal Reserve cannot control where the money goes that it pumps, or “waterboards,” into the market. The Fed, of course, would like the money to find its way into the American economy. But because interest rates are so low in the United States, many major investors are putting billions of dollars into countries where higher yields can be found. This outflow of cash into places like Brazil is causing commodities prices to rise in those countries while reducing the competitiveness of their export products.

China and Japan—The largest holders of U.S. Treasury debt rightly fear that the value of their holdings will depreciate significantly when the Fed-generated low U.S. interest rates return to normal. Moreover, we should recognize that the United States is playing a dangerous game with its largest creditor. International money manager Axel Merk said last week, “QE2 [$600 billion waterboarding] is akin to the Fed placing a gun to China’s head, telling them to revalue their currency.”

Bond market—Although interest rates have been low, the bond market has benefited over the past 18 months thanks to Federal Reserve bond purchases designed to stimulate the economy (the Fed pumps money into the financial system by buying bonds). In other words, bonds respond to supply and demand forces. When the Fed creates false demand for bonds by printing money, bond prices go up. When the Fed’s bond buying program ends, look for bond prices to return to earth and possibly crash, causing another international financial crisis.

Pension funds—Historically, pension funds have loaded up on government and corporate bonds because they provide a reliable income stream. With interest rates so low, pension funds aren’t receiving a good yield these days. Although bonds have appreciated in value, those prices are artificially inflated due to Federal Reserve purchases. When interest rates return to normal levels look for longer-term bonds, and the pension funds that hold them, to lose significant value. Defined benefit pension plans—those that promise a fixed amount of monthly income upon retirement—are in danger. In fact, many organizations, public and private, have had to cough up extra cash to meet pension shortfalls caused by Fed-induced market volatility and low interest rates.

American taxpayers—Most state and local government employees, 84 percent, have lucrative defined benefit pension plans. According to one study, those plans are already underfunded by $1 trillion–$3.2 trillion. When interest rates increase, there’s a good chance those plans will be even further under water. Guess who will be on the hook to make up for the shortfall?

American voters—The electorate voted for a Republican Congress in order to cut bogus stimulus programs, but the untouchable Fed will overwhelm the voters’ desires by pumping hundreds of billions of dollars into the economy.

Grandma—Her certificates of deposit bear artificially low interest. In some cases, interest earnings aren’t covering the fees generated by her financial products. Grandma is losing ground.

Wal-Mart shoppers—According to a pricing survey released last Thursday, prices at Wal-Mart, which has thousands of stores around the world, are rising at an annualized rate of 3.6 percent. A jug of Tide Original laundry detergent was the biggest gainer in the 86-product survey. Believe it or not, the Federal Reserve is trying to make prices rise because it believes a modest amount of inflation (2 percent) is a good thing. Again, the Fed is playing a dangerous game because prices could spike due to the unprecedented amount of money it’s creating.

World leaders are rightly concerned about the monetary torture the Obama administration is inflicting on the worldwide economy. The United States should end its practice of financial waterboarding before hundreds of millions of people get hurt.