Ben Bernanke is a highly educated PhD from Princeton who has never worked a day in the real world since he graduated from college in 1975. His entire life has been spent in the ivory tower of academia surrounded by models and theories that work perfectly in the comfort of his office. After building his reputation as an “expert” on the Great Depression by studying it and reaching the wrong conclusions, he came down from his ivory tower in 2002 to join an organization that has systematically destroyed the value of the US currency, thereby undermining the well being of the once vibrant middle class.
He became a member of the Federal Reserve and has served his masters (Wall Street Banks, Mega-corporations, Washington politicians) unswervingly since. When he makes his now regular appearances on 60 Minutes, he tries to give the appearance of being someone concerned about the average American. The facts in the real world completely obliterate the lies he nervously mouths while answering softball questions underhanded to him by corporate media mouthpieces. His quivering lip and nervous ticks reveal his true nature. How could Bernanke blatantly take measures that destroy the lives of millions of Americans? Maybe Dr. Seuss had the answer:
It could be his head wasn’t screwed on just right.
It could be, perhaps, that his shoes were too tight.
But I think that the most likely reason of all,
May have been that his heart was two sizes too small.
Whatever the reason, His heart or his shoes,
He stood there on Christmas Eve, hating the Whos,
Staring down from his cave with a sour, Grinchy frown – Dr Seuss
If the Grinch had been pimping for a small pack of Grinchsters who impoverished the honest people of Whoville, then the Dr. Seuss poem would have perfectly described Ben Bernanke, the Federal Reserve and the banksters that run the show here in the USA. The actions taken by Ben Bernanke, Alan Greenspan and their brethren on the Federal Reserve over the last quarter century have destroyed the middle class and left senior citizens impoverished, while enriching its Wall Street masters. Now he is stealing Christmas from the hard working middle class of this country.
Bernanke’s latest theoretical venture into manipulating the puppet strings of the economy began with his speech at Jackson Hole in August and concluded with his Op-Ed on November 4. His master plan to buy an additional $600 billion of Long-term Treasuries is being implemented on a daily basis. This QE2 follows his previous QE1, which consisted of buying $1.4 trillion of toxic mortgage securities from his masters, the insolvent Wall Street banks. What follows are Ben Bernanke’s own words:
“I believe that additional purchases of longer-term securities, should the FOMC choose to undertake them, would be effective in further easing financial conditions.” – Ben Bernanke – August 27, 2010 – Jackson Hole
“Given the Committee’s objectives, there would appear–all else being equal–to be a case for further action. For example, a means of providing additional monetary stimulus, if warranted, would be to expand the Federal Reserve’s holdings of longer-term securities. Empirical evidence suggests that our previous program of securities purchases was successful in bringing down longer-term interest rates and thereby supporting the economic recovery.” – Ben Bernake – October 15, 2010 – Boston Speech
“To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month.” – Ben Bernanke Fed Announcement – November 3, 2010
“This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.” – Ben Bernanke – November 4, 2010 – Washington Post Op-Ed
Ben and his friends on the Federal Reserve have a PR machine to help sell their lies. Let’s assess whether Ben and his Federal Reserve have helped or hurt the average American.
Throwing Senior Citizens Under the Bus
Then he slunk to the ice box. He took the Whos’ feast, he took the who pudding, he took the roast beast. He cleaned out that ice box as quick as a flash. Why, the Grinch even took their last can of Who hash. – Dr Seuss
There are approximately 40 million senior citizens living in 25 million households in the US. According to the Census Bureau, more than 12 million of these households survive on less than $30,000 of income per year. The median household income in the US is $49,777. A full 70% of all over 65 households make less than the median income. A recent study found that 58% of those between 60 and 84 will at some point fail to have enough liquid assets to allow them to get through unanticipated expenses or declining income.
The vast majority of their income is from Social Security payments. Most senior citizens are rightly risk adverse and dependent upon income from certificates of deposit. During the 1990’s and as recently as 2007, a senior citizen could get a 5% return on a CD. Many of these people depended on this interest income to pay their everyday expenses. Below is a chart that plots the average interest rate for 6 month CDs since 1964. Today the average rate on a 6 month CD is .30%.
Ben Bernanke is to thank for this poverty enhancing rate. He reduced the discount rate to 0% while paying interest on deposits at the Fed. The affect of this policy has been to transfer hundreds of billions to the Wall Street criminal banks from the pockets of senior citizens and other Americans dependent upon interest income to sustain their meager lives. A brainless CNBC anchor can look at this chart and realize that the Federal Reserve caused the housing crisis by driving down rates from 2002 through 2005. Ben Bernanke, who never saw the housing collapse coming and personally had an exploding adjustable rate mortgage, has learned nothing from the prior disaster. He has driven rates down to 0% in order to force people into speculative investments. The Federal Reserve is a perennial bubble blower. This will likely be the final bubble of Bennie’s career.
These recent actions by the Federal Reserve are just the tip of the iceberg. Alan Greenspan, the Federal Reserve and the US Government have systematically screwed senior citizens for decades by purposely understating CPI. The result has been that the cost of living adjustments to Social Security has seriously lagged real inflation. For the 2nd consecutive year senior citizens will get no cost of living increase on their Social Security. The average monthly Social Security payment is $1,074. While seniors struggle to make ends meet, Wall Street banks are handed billions in free money by Ben Bernanke. The chart below details the COLA increases since 1975. Alan Greenspan and his commission began manipulating the CPI in the early 1980s.
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| a The COLA for December 1999 was originally determined as 2.4 percent based on CPIs published by the Bureau of Labor Statistics. Pursuant to Public Law 106-554, however, this COLA is effectively now 2.5 percent. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Since 2000, seniors have seen their monthly payment increase by 27%, or less than 2.5% per year. I challenge anyone to convince me that inflation has been 0% for the last two years. I have calculated my real inflation and it is four times the government reported figure. I suppose government bureaucrats and Federal Reserve Chairmen don’t fill up their gas tanks or go food shopping. John Williams at www.Shadowstats.com calculates the CPI as it was calculated prior to the Greenspan fraud. Based on this true assessment of inflation, prices have increased by 100% since 2000, or 8% per year.
Only an Ivy League academic could examine the following yearly price data and conclude, as Bernanke has, that inflation is well contained:
- Unleaded gas up 24%
- Heating Oil up 28%
- Corn up 50%
- Wheat up 48%
- Coffee up 56%
- Sugar up 27%
- Soybeans up 30%
- Beef up 26%
- Pork up 22%
- Cotton up 101%
- Copper up 33%
- Silver up 72%
I wonder what a can of Who Hash will cost in 2011?
The truth is that senior citizens spend a much higher percentage of their limited income on the basics of housing, transportation, food, and insurance. So, these increases have a much greater impact on seniors than rich bankers and Princeton scholars. The figures for key items over the last decade prove the point that seniors have fallen further due to the inflationary policies of the Federal Reserve.
| Category | Expense | Cost in 2000 | Cost in 2010 | % Increase, 2000 – 2010 |
| Housing | Homeowner’s insurance (annual) | $508.00 | $1,059.00 | 108% |
| Real estate tax (annual) | $690.00 | $1,223.88 | 77% | |
| Heating oil (gallon) | $1.15 | $2.88 | 150% | |
| Natural gas (per thousand cubic foot) | $6.37 | $10.39 | 63% | |
| Electricity (per kw hr) | $0.08 | $0.12 | 50% | |
| Transportation | Regular gas (gallon) | $1.26 | $2.75 | 118% |
| Medical | Medicare Part B premiums (monthly) | $45.50 | $110.50 | 143% |
| Food | 10 lbs. potatoes | $2.98 | $4.98 | 67% |
| Eggs (dozen) | $0.93 | $1.79 | 93% | |
| Ground chuck (lb.) | $1.90 | $2.83 | 49% | |
| Bread, white loaf | $0.91 | $1.36 | 50% |
Helping Housing?
And the one speck of food That he left in the house,
Was a crumb that was even too small for a mouse.
Then He did the same thing To the other Whos’ houses
Leaving crumbs Much too small For the other Whos’ mouses! – Dr. Seuss
Not only was Ben Bernanke complicit in aiding Greenspan in creating the housing bubble by keeping interest rates too low for too long, completely missing a two standard deviation (PhDs love this stuff) price bubble right in front of his eyes, telling Americans that we had a strong housing market, telling Americans that housing price declines would not affect the economy, not regulating or policing the rampant mortgage fraud that was happening under his nose, and aiding and abetting the very criminal banks that created the bubble, but now he has blatantly lied by saying his QE2 $600 billion monetization of our debt is to support the housing market. If you believe this, I have some prime real estate with great views in the mountains of Afghanistan to sell you.
In his October 15 speech, Bernanke assured the world that QE2 would reduce long term interest rates. On November 4, he stated:
“Lower mortgage rates will make housing more affordable and allow more homeowners to refinance.”
On October 7, one week before Bernanke gave the green light to QE2, the 10 Year US Treasury rate was 2.38%. Today it stands at 3.3%, almost 100 basis points higher. I’m guessing this guy isn’t very good picking his weekly football pool. Interest rates have done the exact opposite of what he proclaimed they would do. These rates have surged in the face of an already weakening economy, as unemployment continues to rise and home prices continue to fall. A 100 basis point rise in Treasury bonds piles approximately $120 billion more interest expense per year onto the backs of future generations.
The rate on 30 year fixed mortgages has surged to 5.07% from 4.4% in mid-October. That should do wonders for refinancing and home purchases. Bernanke’s actions have priced millions of people out of the market. He has inflicted more damage on an already teetering housing market and has insured that home prices will plunge by another 20% in the next year.
Despite the trillions of dollars thrown at the housing market by Bernanke and Obama through home buyer tax credits, mortgage modification programs, purchasing toxic mortgages from the criminal banks at 100 cents on the dollar, artificially reducing mortgage rates, and forcing those government run disasters Fannie Mae, Freddie Mac and the FHA to backstop more bad loans, home prices are resuming their downward trajectory to fair value. That value is at least 20% lower. With 22.5% of all properties (10.8 million properties) with a mortgage having negative equity, the housing market was already in dire straits. With the surge in mortgage rates caused by Ben Bernanke’s actions, a rapid plunge in prices can be expected in 2011, resulting in more foreclosures and negative equity swamping millions.
The truth is that Ben Bernanke could care less about the average American homeowner making $48,000 per year. The real purpose of QE2 was to further enrich his masters on Wall Street and the ruling elite who control the wealth in this country.
Wall Street Wealth Bailout
“When the Fed uses QEII to subsidize the largest players on Wall Street, it is disadvantaging the smaller, better run banks, and it is also playing with politics. Priyank Gandhi and Hanno Lustig, in a National Bureau of Economic Research working paper issued in November (No. 16553), suggest that the implicit collective guarantee extended to large U.S. financial institutions reflects an annual subsidy to the largest commercial banks of $4.71 billion per bank, measured in 2005 dollars. But, even more important, the paper notes that subsidies for the “too big to fail” banks shows the Fed’s willingness to support the equity markets, an extraordinary and ultimately political act that requires further hearings by the Congress.” – Chris Whalen
Chris Whalen and a few other brilliant analysts realize the true purpose of Ben Bernanke’s actions. Bernanke even revealed his true intentions in his November 4 Op-Ed:
“Higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.”
On August 26, the day before Bernanke’s Jackson Hole speech, the S&P 500 was at 1,047. Today, it stands at 1,247, a 19% increase in the face of weakening economic conditions for the middle class worker. The more speculative NASDAQ stood at 2,119 on August 26, and today sits at 2,649, a phenomenal 25% increase as more middle class Americans have lost their jobs. Over this same time frame, according to the BLS, there are 500,000 less Americans employed.
The truth is that Ben Bernanke’s sole reason for implementing QE2 is to enrich the few at the expense of the many. The chart below paints the picture clearer than the lies and misinformation you will get from CNBC and Fox. The top 1% wealthiest Americans own 60.6% of all the stocks in America, with the next 9% wealthiest owning 37.9% of the stocks in America. That leaves a full 1.5% of stocks in the hands of the remaining 90% of Americans. Who is benefitting from QE2?
Part 2 of the table clarifies who Bennie is working for. The 90% of Americans have 42.3% of the liquid deposits, 61.5% of residential investment and 73.4% of the debt in the country. Ben Bernanke’s actions have resulted in liquid deposits paying 0% interest (19 largest banks out of 7,700 banks control 50% of all deposits), residential real estate prices declining, and the cost of carrying debt to rise. Meanwhile, the top 1% convinced the public they needed a tax cut so they could continue to buy gifts like Clive Christian’s $247,000 Imperial Majesty perfume, packaged in a diamond-encrusted Baccarat crystal bottle.
| Table 2: Wealth distribution by type of asset, 2007 |
| Investment Assets | |||
|---|---|---|---|
| Top 1 percent | Next 9 percent | Bottom 90 percent | |
| Business equity | 62.4% | 30.9% | 6.7% |
| Financial securities | 60.6% | 37.9% | 1.5% |
| Trusts | 38.9% | 40.5% | 20.6% |
| Stocks and mutual funds | 38.3% | 42.9% | 18.8% |
| Non-home real estate | 28.3% | 48.6% | 23.1% |
| TOTAL investment assets | 49.7% | 38.1% | 12.2% |
| Housing, Liquid Assets, Pension Assets, and Debt | |||
| Top 1 percent | Next 9 percent | Bottom 90 percent | |
| Deposits | 20.2% | 37.5% | 42.3% |
| Pension accounts | 14.4% | 44.8% | 40.8% |
| Life insurance | 22.0% | 32.9% | 45.1% |
| Principal residence | 9.4% | 29.2% | 61.5% |
| TOTAL other assets | 12.0% | 33.8% | 54.2% |
| Debt | 5.4% | 21.3% | 73.4% |
| From Wolff (2010). | |||
Of course, we all know the rich create all the jobs. Too bad they were created in India and China. No more conclusive evidence of the Federal Reserve destroying the American middle class can be found on the US Census Bureau site. The median household income in the US reached its all-time peak in 1999 at $52,388, in today’s dollars (key data point). Ten years later the median household income is $49,777. The standard of living for the median household in the US has fallen by 5% in the last decade, even using the government manipulated CPI.
The mainstream media will not report this fact. They will report the non-inflation adjusted figures that show a 22% increase in the median household income. They do this because they know that the average American has no clue what the term “inflation adjusted” means. Ben Bernanke, the Federal Reserve, and the ruling oligarchy can only retain their power through the use of inflation, while slowly destroying the currency, impoverishing the masses and enriching them. The website www.mybudget360.com has suggested the proper mission statement for Bennie and the Feds should be:
“To aggregate as much wealth into the banking system while eliminating the American middle class by a slow systematic dilution of their currency and financial well being and standard of living.”
| Table H-6. Regions–All Races by Median and Mean Income: 1999 to 2009 | |||||
| (Households as of March of the following year. Income in current and 2009 CPI-U-RS adjusted dollars (28)) | |||||
| Region and year | Number (thousands) | Median income | Mean income | ||
| Current dollars | 2009 dollars | Current dollars | 2009 dollars | ||
| 2009 | 117,538 | 49,777 | 49,777 | 67,976 | 67,976 |
| 2008 | 117,181 | 50,303 | 50,112 | 68,424 | 68,164 |
| 2007 | 116,783 | 50,233 | 51,965 | 67,609 | 69,940 |
| 2006 | 116,011 | 48,201 | 51,278 | 66,570 | 70,819 |
| 2005 | 114,384 | 46,326 | 50,899 | 63,344 | 69,597 |
| 2004 | 113,343 | 44,334 | 50,343 | 60,466 | 68,662 |
| 2003 | 112,000 | 43,318 | 50,519 | 59,067 | 68,886 |
| 2002 | 111,278 | 42,409 | 50,563 | 57,852 | 68,976 |
| 2001 | 109,297 | 42,228 | 51,161 | 58,208 | 70,521 |
| 2000 | 108,209 | 41,990 | 52,301 | 57,135 | 71,165 |
| 1999 | 106,434 | 40,696 | 52,388 | 54,737 | 70,462 |
While real average weekly earnings for the average American are lower today than they were in the early 1970s, you will be happy to know that Wall Street bonuses have recovered nicely from the dip in 2008. Compensation at Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, and Citicorp increased by 31% in 2009. Average compensation rose by 27% to more than $340,000. Bonuses jumped above the $20 billion mark in 2009, but sadly trail the record of $35.5 billion in 2006 just before Wall Street destroyed the financial system of the entire world. According to the NYT, 2010 will be a banner year:
“Wall Street’s five biggest firms have put aside nearly $90 billion for bonuses. Whether it’s for jewelry, high-end clothing or apartments, bonus spending has long fed a post-holiday boom in January and February, especially in Manhattan and expensive suburbs like Greenwich.”
I’m sure this information warms the cockles of your heart.
At the end of Dr. Seuss’ poem, the Grinch repents and brings a happy ending to Whoville:
That the Grinch’s small heart Grew three sizes that day!
And the minute his heart didn’t feel quite so tight,
He whizzed with his load through the bright morning light,
And he brought back the toys! And the food for the feast!
And he, HE HIMSELF! The Grinch carved the roast beast! – Dr. Seuss
Even if Ben Bernanke’s heart was to grow three sizes, he would be discarded by the other Grinchsters (banksters) like piece of Whoville tinsel. The truth of our current situation is better captured by Mick Jagger in his song Sympathy for the Devil:
I’m a man of wealth and taste
I’ve been around for a long, long year
Stole many a man’s soul and faith
But what’s confusing you
Is just the nature of my game
The people running the show in this country will not be bringing joy to Whoville. You need to understand the nature of their game.
Triffin dilemma
A deficit is necessary for the United States to supply world demand for its Dollars,[7] but such a deficit will, in time, lessen the value of the Dollar and endanger the entire system.[7] Known as the Triffin dilemma, it was this problem that the creators of the SDR sought to mitigate.[7]
http://en.wikipedia.org/wiki/Special_Drawing_Rights
The UN is gung ho for the IMF to hold the reserve currency. That is another ENORMOUS strike against the SDR. -=Smokey=-
Indeed.
DP serves Can-of-duh very well.
=]
don’t get your head lost as you try and wrap it around the wheel……..
you can only go so far for so long producing less than you consume (we’ve been doing it from early to mid-eighties)
guess what, our american express black card is MAAXXXed out
no, you r right…the creditors don’t believe it yet
so………….we’ll be forced into war…a new war
time to quit being liberal shrews, when we go to the middle east we’ll have to take the oil this time – don’t worry for all you liberal peace loving shrews, we won’t
and for that reason we’re fucked
Most of you idiots think it’s monetary policy, it’s not…..monetary policy attempts to hide the fact that we consume more than we produce………
maybe we’ll be lucky and the rest of the world will work hard why we sit on our fat police citizen killing pensions (btw not over the 1984 post yet…get fucked muckabout)
Bernokio is a criminal who should be arrested, tried for financial crimes, convicted, and executed.
Printmemoney – glad to see you hold a grudge. It comes in handy around here.
BTW – war doesn’t resolve the issue of consuming more than you produce. In fact, it can and does generally exacerbate the problem. For verification of this, check debt levels during WWII as an example.
And may I say this in response to your comment “Most of you idiots think it’s monetary policy, it’s not…..monetary policy attempts to hide the fact that we consume more than we produce”: a great many people – I would say most – understand that a major problem is that we consume more than we produce (hence the debt problem).
And further may I say go fuck yourself for the way you prefaced your comment. You will catch a lot of abuse for your tone, jackass.
VegasBob – you are not alone in your sentiments.
llpoh – people actually sacrficed during that war….don’t worry about my tone…worry about your tone deffness – the debt bubble was still able to blow up after wwII…..guess what dumbass…no more dumbass creditors
the reason war used to solve the current problem we are in (aka depression) is because idiots “citizens” used to sacrifice
they don’t anymore
and you….saying i’ll take abuse – i think i’ll wake up caring when you wake up with a fucking brain
As big a Jackass as Helicopter Ben is and the Maestro was before him, you have to remember that both these guys are just Footsoldiers for the Illuminati. While I am all for stringing them up by their Gonads, unless you also string up the entire Rockefeller and Rothschild families along with the Kuhns, Warbugs, Duponts, Astors, Vanderbilts et al, it’s a lot like hanging a Nazi Prison Guard while you let Hitler go free.
Meanwhile, far as Helicopter Ben goes, by the time he was sitting in the Big Chair at the Fed, the collapse of this monetary system was already a done deal. If he didn’t backstop the TBTF Banks, the ATMs would have stopped working back in 2008 and the Seniors would already be eating Dog Food since all their pensions would have collapsed. So we got a couple of etra years here living in Fantasy Land.
The whole rest of the industrialized world is in such deep shit right now that regardless of how much Toilet Paper Helicopter Ben prints, every time another PIG goes Belly Up the Dollar gets another Transfusion as Bond Holders flee one dying corpse for the safety of the slightly less dead corpse.
Eventually its all going down the crapper, but meanwhile we have had a very entertaining couple of years watching TPTB run around like Headless Chickens plugging one hole in the dyke after another. If you were smart, you used that last couple of years to Prep Up, so just go with the flow here. It doesn’t MATTER what Helicopter Ben does. The system is FUBAR regardless, and he is just a figurehead that diverts your attention from the ones truly responsible. The ILLUMINATI.
RE
Ironic that both Greenspan and Bernanke are called doctors……..but then again, so are abortionists
Printmoney – you are one dumb shit for brains. Government debt blew out during WWIi to record levels. The war did not reduce debt and will not do so in the future Sacrifice will not change that. Get a clue before you post. I mistook you for someone with some brains. My mistake won’t be repeated.
Debt might have blown out…but we were still a creditor nation….with opportunity to grow our economy through production….hence we could pay back our debt….now we attempt to grow through printing….post wwll solutions won’t work. Only one way out now…..default via destruction of the currency.
Friendship is the best ship. God bless you and your family llpoh on this wonderful holiday season
I believe War Bonds in WW2 were issued, and the patriotic and sacrificial American public bought them to support the cause. Of course, the value of interest payments made on these bonds were even less than the market interest rate. Back then, Americans could be convinced to sacrifice for the “greater good”. Debt exploded, and citizens were directly made to fund the efforts of the war machine via voluntary bond purchases.
Nowadays? Hellz no… When the new war hits, America is going to have to fund itself somehow – maybe through my taxes, but never voluntarily as a purchase of blood bonds on my part to support it. All of our wars are exploding our debts yet again, and anyone buying long-term government bonds now is again sacrificing their money for the “greater good” – whatever that may be this time around.
“I wonder what a can of Who Hash will cost in 2011?”
That is absolutely hilarious and nicely summarizes the entire point of the article.
In order to deal with the whole “Who Hash” issue, several issues need to be dealt with:
1) Who knows what the USD-reminbi or USD-SDR exchange rate will be? I mean, since the USD is on a clear path to complete destruction by the Fed and The Ben Bernake.
2) Who will be around to actually manufacture Who Hash since the US manufacturing capacity is tits up? Since the coming tsunami of fed.gov regulations/fines/taxes/penalties/greeniecrap will completely strangle whatever (delusional) remaining entrepreneurs are out there in the USA?
3) See #2, how do you say “Who Hash” in Mandarin or Hindi?
4) Who can actually afford to buy “Who Hash”given the prohibitive rise in “ingredients”, oops, I mean, commodities?
And lastly,
5) Do the calories count if “Who Hash” is eaten in a banksters private jet or the Ferrari?
@Jo: The game of the USD remaining as the world’s reserve currency is kind of like watching a really really really bad marriage play out. Neither party will leave until the pain of leaving is LESS than the pain of staying together. Only when the rest of the globe figures out that the pain of leaving the USD is less than keeping it as a reserve currency, that will be the moment that it all unravels. The USD doesn’t have to devalue completely to crash the system, that probably won’t happen. Even a 50% devaulation will be enough.
Nice marriage analogy, Hope@ZeroKelvin.
When I listen to our elected leaders I am reminded of that quote by Hillaire Belloc ” It is a nice question whether ignorance or stupidity plays the greater part in human affairs.”.
Printmoney – you too! I do not disagree with your last post at all. We may be able to inflate our way out instead of default but it is much the same result. It will not be pretty.
@Smokey:
I’m speaking from personal experience, LOL.
Quinn said, “On October 7, one week before Bernanke gave the green light to QE2, the 10 Year US Treasury rate was 2.38%. Today it stands at 3.3%, almost 100 basis points higher.”
Apparently The Bernanke failed to realize that the market had already began to account for the possibilities of a QE2 as can be seen with the rise in the U.S. Treasury rate.
As RE mentioned, above, sit back and enjoy the few years “extra” that have been given to us to prepare for the inevitable economic armaggedon.
The true “invisible hand” of the market will eventually land the knock out punch to the crony capitalists and market manipulators even with their powerful manipulation of the “electronic herd” to attack the bond markets of the “least” dead nation at the time.
Is it time to bring out yer dead yet?!
The Bernanke couldn’t find Pelosi’s ass even if she was squatting naked in front of him, in the midst, of some nastyass ass-to-mouth scenario that even Dr. Seuss couldn’t make sound pleasant!
I just mailed out a Christmas card to the Butner Federal Correctional Complex in Butner, NC., Attn:Bernard Madoff. I included a yellow Get Out Of Jail Free card in the envelope.
Smokey: “Pirate Jo—–The only reason any currency is viable as a means of exchange is because the people involved in the exchange have confidence in the currency.”
Yes, Smokey – it does take an incredible leap of faith to give out a cheeseburger or a bottle of Jack for a few pieces of paper. I get that. My point is, I see human stupidity as being a bottomless resource. Maybe this is the same insight that made the Wall Street types rich, I don’t know. I’m just a farm girl from Iowa with a crush on Steve Hogan, the anarchist. 🙂
What would make the average person lose faith in the currency? There are, what, a couple hundred smart people in this world with enough wealth that they don’t need that faith? As for the rest of us, I don’t see people abandoning their faith any time soon. Not that we want the faith, mind you – it’s just a matter of getting breakfast in the morning.
I agree Pirate Jo. As long as “I” believe that the dollars that I receive for my goods will be accepted by some one else in exchange for theirs then I will continue to accept them and the show will go on.
However, if and when the show does end it will end quickly. Hyper inflation is a social event not a monetary one. I think that’s why it seems like it won’t happen anytime soon. Something unexpected has to trigger it, though there are ominous developments brewing. Russia, China, Saudia Arabia, et al have allegedly had “secret” meetings to end the petrodollar agreement (meaning that oil may soon be purchased in non-dollar currencies, which will lower global demand for dollars and really tank it. P.S. gold is also priced in dollars so it will maintain its purchasing power, as it should.) Also, store signs are cropping up that announce the acceptance of non-dollar currency for purchases (Euros, especially). I haven’t seen such signs personally, but if I do I will definitely consider it an inflection point.
Not just a faith issue…..when too many $$$$ are chasing too few goods prices will rise
Then we print more….prices rise, currency induced cost push inflation
Thanks Jim Sinclair.
Buy guns.
I think Ben Bernanke is a GENIUS – beyond compare!! All those who love to dismiss him as an ineffectual, but maybe well-meaning, out-of-touch academic, only expose their own hubris and deluded themselves into a sense of self confidence! Just think his bosses the Fed (a US private banking cartel) hired him for a reason. He IS an expert on the Great Depression – he has studied it well – even knows its ultimate desired conclusion. HIS only task is to duplicate it – but today when deflation and depression is seen to be impossible!
Enter the BRILLIANT BEN – we must not let DEFLATION kill us like in the 1930’s. We must print EVEN MORE money than Hoover (he did a lot actually) and I (BEN the Brilliant) will even throw it out of helicopters if necessary. I (BEN) am willing to print 24/7 until infinity if necessary to defeat our arch-nemesis DEFLATION but in the end I wil be stopped by Ron Paul and those business-friendly republicans – just as FDR was in the 1930s – I tried as the Fed did in 1930s but CONGRESS screwded the US people AGAIN!! What could IIIII do – I am just an expert academic crying in the wilderness (that will be vindicated in time – as will my employer the Fed – as in the last Great Depression we caused).
As in the 1930s HIS employer (and their shareholders) will be swalloping up land, gold, silver, and every other asset at very low prices – and old BEN will go down in history as a well-meaning ivroy league academic that could not sell his brilliant ideas to an opportunitsic congress.
And ALLl did not happily live ever after – execpt BEN and his bosses!!
When the MSM picks up on the trend, this could be the beginning of the end for the bond bubble.
“Americans are leaving bond mutual funds at the fastest rate in more than two years.
U.S. investors pulled $8.6 billion out of bond funds in the week ended Dec. 15, the largest withdrawal since October 2008 when financial markets were in free-fall. They pulled an average of almost $3 billion every week since Nov. 23, according to the Investment Company Institute. Prior to November, money had been flowing into bond funds every week for nearly two years.”
http://finance.yahoo.com/news/Surge-of-money-from-bonds-apf-4101830214.html?x=0&sec=topStories&pos=9&asset=&ccode=
The expectation that government (Federal, State or Local) will do something that actually helps is naive at best. I tend to focus on the things I can do something about or control.
“Americans are leaving bond mutual funds at the fastest rate in more than two years.”
When the “herd” is exiting it is probably time to buy bonds – like I am. The US dollar and treausries will rise significantly in the next few months while the Euro, Gold, Silver, Stocks, commodities and damn near everthing else implodes!
I am Canadian and I think the US dolar (and Treasuries) are going UP – way UP – in the short term.
The perfume is actually $435,000. You actually low-balled the price, dude. The bottle is studded with a 5 carat diamond.