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Ben Bernanke does not understand economics. This much is clear every time the man speaks to an audience. Of course he is “learned” and is an “expert” on the Great Depression, but the Fed Chief constantly makes what was one time considered the primary mistake in the field of economics.
Welcome to the Land of Illusion, a little early for Halloween. In his first regular news conference, sans tough questions, Helicopter Ben’s promulgation was that there is no inflation and all is basically well.
How bad is the situation in America today?
ARROYO GRANDE, Calif. (MarketWatch) — Fed boss Ben Bernanke is the most dangerous human on earth, far more dangerous than Hosni Mubarak, Egypt’s 30-year dictator, ever was. Bernanke rules a monetary dictatorship that will trigger the coming third meltdown of the 21st century.
I apologise to readers around the world for having defended the emergency stimulus policies of the US Federal Reserve, and for arguing like an imbecile naif that the Fed would not succumb to drug addiction, political abuse, and mad intoxicated debauchery, once it began taking its first shots of quantitative easing.
Ben Bernanke, otherwise known as Helicopter Ben today states that he is puzzled by the continued climb of gold.
“I don’t fully understand movements in the gold price,” Mr. Bernanke admitted.
What Mr. Bernanke does not seem to recognize is the extraordinary inflation pressures already in the system. The fact that asset prices are being artificially held up is price fixing and is accomplished through inflation. Gold is not reflecting immediate price inflation so much as mid to long term inflation concerns. Simply put, gold is recognizing the effects of quantitative easing on the monetary base. The Federal Reserve and central planners generally have no ability to think long term as a pool of collective consumers without coercion otherwise known as a free market do. It is debatable if manipulation of gold prices by central banks occurs or to what extent. It is definite that bailouts to preferred corporations and banks constitute economic fascism and inflate the asset value of the company receiving the infusion. This is turn coerces investors into preferred asset classes of the political class, mainly the paper equities of the otherwise failing institutions. This misallocation of capital only prolongs the misery and delays the day of reckoning. An economy can not be endlessly built on a pyramid of debt and be driven mainly by consumption. There is a point that consumers leave the game, even if employed. Households have to budget and plan; governments seem to believe they do not. Bernanke in his narrow Keynesian economic view think the only measure and indicators of inflation are bond yields or the manipulated CPI numbers.
By David DeGraw, AmpedStatus Report (ampedstatus.com) Not only did Goldman Sachs profit on betting against CDOs they designed to fail; more importantly, they insured them through AIG which led to a $182 billion taxpayer bailout. Have you heard the news? It’s everywhere! The SEC and Congress have all of a sudden sprung to life and [...]
Hat tip: The Daily Bell
Tuesday, March 02, 2010
by Staff Report
Don’t go wobbly on us now, Ben Bernanke … Mervyn King, the Bank of England’s Governor, seems strangely alone in … seeing the absurdity of a recovery strategy where everybody tightens at once and surplus states keep on dumping excess capacity abroad. “I was struck by the mood at the G7, where several of the major economies around the world said quite openly that they were relying on external demand growth to generate growth. That can’t be true of everybody,” he said.
The West risks a slow grind into debt-deflation unless central banks offset fiscal tightening with monetary stimulus – QE, of course – to keep demand alive. Yet the Fed and the European Central Bank are letting credit contract. … Fed chairman Ben Bernanke told us in his 2002 speech “Deflation: Making Sure It Doesn’t Happen Here” that:
- Japan’s slide into deflation was “entirely unexpected”, and that it would be “imprudent” to rule out such a risk in America;
- “Sustained deflation can be highly destructive to a modern economy and should be strongly resisted”;
- That a “determined government” has the means to stop deflation, if necessary by use of the “printing press”.
Yet here we are, facing exactly that risk, unless you think one good quarter of inventory rebuilding has conjured away our debt bubble. The one-off inflation blip caused by a doubling of oil prices is already fading, revealing once again the deeper forces of deflation. Core prices fell 0.1% in January. They plummet from here.
So why has Bernanke broken ranks with King and begun to flirt with disaster by tightening too soon? Has he lost control to regional hawks, as in mid-2008? Have critics in Congress and the media got to him? Has China vetoed QE, fearing a stealth default on Treasury debt?
Don’t go wobbly on us now, Ben. If the governments of America, Europe, and Japan are to retrench – as they must – their central banks must stay super-loose to cushion the blow. Otherwise we will all sink into deflationary quicksand. – UK Telegraph
The US Economy is Set for a “Double-Dip” Recession
by Paul Craig Roberts
Happy news! The government has come up with a 5.9 percent GDP growth rate in the fourth quarter of 2009. The recession is over.
Or is it?
Statistician John Williams has informed us that 69 percent of this growth, or 4.1 percentage points, is the result of inventory accumulation. That leaves a 1.8 percent growth rate, and the 1.8 percent is likely due to the underestimate of inflation and other statistical problems.
The Federal Reserve’s own monetary evidence contradicts the recovery assurances from Fed chairman Ben Bernanke. The Federal Reserve continues to pour massive reserves into the banks. The monetary base, which consists of currency in circulation and bank reserves (the basis for new loans), has surged from $850 billion in 2009 to $2.2 trillion on February 24.
Despite this potential for massive new money creation, the broadest measure of money growth is still contracting.The banks are too impaired and so are consumers for the banks to create new money by making loans.
The economy, in other words, is going nowhere.
by Marc Gallagher
hat tip: Liberty Maven
February 27th, 2010
Editor’s Note: Sometimes it’s good to listen to the other side with an open mind because perhaps they know better. This article about Ron Paul was sent to us by our neo-conservative friend, Richard Deekbag, founder of the following website (we apologize for the length of the URL):
I mean just look at the guy. Ron Paul is all skinny, old, and wrinkly. His speeches are rambling diatribes supporting the long debunked conspiracy theory known as the U.S. Constitution. Everyone knows the Constitution expired more than 100 years ago and has no place in our Conservative-Progressive-Democratic-Socialist-Liberal-Republican (ConProDemSocLibRep) society.
After all it was Ru Paul’s isolationist ideas that lead America into its darkest period following the Revolutionary War after his idiotic idols, the Founding Fathers, defeated the British occupiers. Well, they were more like friendly visitors than occupiers. Visitors that honored the American colonies by taxing them heavily and treating them like peasants.
Everyone knows by now that Ron Paul’s efforts to abolish the massively successful Federal Reserve bank is kookier than cookies. The Fed has been our savior over and over and over and over and over again over the years. If it weren’t for the Fed the so-called “Great Depression” would have been much shorter. That’s a gigantic problem because we needed it to last much longer just to prove that government regulation is the lifeblood of the economy!