Is Anyone Actually Bothering to Fact-Check the Fed’s Claims?

Phoenix Capital Research's picture


The primary
reason Bernanke claims to be engaging in QE at all is to keep interest rates
low to sustain the housing market (and allegedly help the economy).


However, even
a cursory look at the situation shows he is either lying or somehow manages to
monitor the US monetary system WITHOUT actually ever look at price levels.
Either one of those options is enough to give you a chill… and illustrate
beyond doubt that he is unqualified for the position he holds.


Indeed, were
Bailout Ben to bother opening a stockcharts account or looking at Yahoo!
Finance occasionally, he’d see that Treasuries actually have FALLEN (pushing
interest rates higher) whenever he announced a QE program.



As you can
see, back in March 2009, when the first QE program was announced, long-term US
debt traded at 130. When QE 1 was announced, long-term US debt levels FELL (pushing
interest rates higher), they then traded in a range from 115-122 until April
2010 when QE 1 ended.


The same
thing happened with the announced of QE lite and QE 2. Indeed, the only time
that Treasuries actually RALLIED (lowering long-term interest rates) was from April-August 2010: the ONLY time that the
Fed hasn’t maintained a public QE program in the last 18 months.


Again, how
on earth does no one in Congress or elsewhere call Bernanke on this? It’s
obvious to ANYONE who bothers looking at US Treasuries that QE fall whenever
Bernanke implements QE. Is it really possible that NO ONE in a position of
power actually bothers checking on this stuff? I mean, if we’re going to allow
the guy to throw TRILLIONS of Dollars around, surely someone should bother
engaging in minor fact checking like… or I don’t know, seeing if his claims are
actually even VALID.


The same
goes for his and president of the Federal Reserve Bank of New York William
Dudley claims that QE will help the US unemployment situation. Even according
to the BLS’s ridiculous numbers, the unemployment rate when QE 1 started was
8.5% with 13.2 million unemployment, compared to today’s rate of 9.6% with 14.8
million unemployed.


How on earth
can anyone with a working brain claim that the $1.25+ trillion we’ve already
spent on QE was helpful to employment when both the RATE and the actual NUMBER
of unemployed Americans have risen dramatically since QE was first implemented?


In plain
terms, the only way Bernanke’s claims regarding QE’s success are valid is if
you present the argument that both interest rates and unemployment would have
been a whole lot worse without QE. That’s a pretty piss poor argument for
spending nearly $2 trillion.


After all,
if you’re going to resort to abstractions when it comes to justifying spending
INSANE amounts of money, there’s literally no end to the craziness you can come
up with. According to this logic, the Fed could literally print $2 trillion and
give it to Wall Street and claim that it helped the economy when it fact it did
nothing but return Wall Street bonuses to 2007 levels.


Oh wait… it
already did that.



Graham Summers


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RockyRacoon's picture

Complete revelation of every true motive would result in no changes to anything.

Reason:  The ones who could make a difference (the voters) don't give a shit.

Thus spake the Coon.

Clapham Junction's picture

Yeah, y'see the one thing I disagreed with in that marvelous Youtube presentation was that GS et al IS giving the FED a good price.

QE happening?-short the living fxxk out of bonds to give the Bernanke a GOOD price, not bad. Does it defeat the "intended" purpose? Since when do they tell the truth as to "why" anyway? Who gives a sxxt! Why is this happening, and to what end-I don't know, and we may never know.  Believe me, it's nothing we are privy to here. 

Good article, brings an important fallacy of this current idiocy to light.



MarkCaplan's picture

Actually, this makes sense: Bond investors anticipate that QEn will work its magic and stimulate economic growth, which in turn will cause long-term interest rates to rise to more normal levels. That's why QEn drives up rates.The markets are endorsing Bernanke's strategy.


Widowmaker's picture

What is a lie in the system of lies?


moneymutt's picture

What exactly could you do to the economy if you spent that amount of money on things good for the infrastructure, security, clean energy...if we must incur the harm of the FED printing money, then we should at least get the benefit, like jobs, new roads, more border patrol etc...but instead we get the harm, the banks get the benefits and we are a debtor nation

PragmaticIdealist's picture

Actually one of the main beneficiaries of QE is the Government through lower short-term yields (which is how most government debt is funded anyway), and also because the assets that the Fed holds will eventually flow into the Treasury (after all the "economists" take their cut of course).

But that's not a good thing, that just means the Government gets to ramp up its size to unsustainable proportions through its hidden inflation tax on the rest of us.

i-dog's picture

"illustrate beyond doubt that he is unqualified for the position he holds"

... or his stated objectives are not his real objectives. Who woulda thunk it?!

prophet's picture

Blind Trust bitchez!

docsdoc's picture

It's called THE BIG worked for Hitler.

SheHunter's picture

We can rant all we want.  But all the big dogs are in this game together so no one is going to call out nobody. We'll see mucho posturing and indignation but in the end they all share a common cesspool.

tickhound's picture

sec?  cpa?  cfpa?  Cftc?  OMb?  GaO?  FBI?  CIA?  NSA?  Homeland fucking Security?  CRAMER?  WHERE IS ANYONE?

Obviously, this calls for more government.

max2205's picture

For the umpteenth time Ben is saying one thing and mainlining banks balance sheets. 500 govt officials know it. We all know it. No more admitted bailouts allowed. Yeah, they are in that bad shape.

Next flash crash 20% in my opinion

sodbuster's picture

QE is about keeping insolvent banks going- end of story.

unum mountaineer's picture

fucked or more fucked ..anybody got any extra lube? help your fellow man out.

Howard_Beale's picture

Jiffy Lube may be made for vehicles but perhaps they should modify their business model. Whaddaythink?

unum mountaineer's picture

now that's what I'm talking gives you lemons..

doolittlegeorge's picture

The fact of the matter is "he's making a fortune for the Treasury."  In effect "the Fed is now the money center bank of last resort."  Simply "tossing it overboard" could yield and immediate budget crisis with the potential for a collapsing dollar and soaring interest rates.  Of course "doing nothing may yield an even worse result."

rocker's picture

It would be best if we did let it go. Let the crisis bear fruit. Let the corruption at GS, JPM, WFC, AIG, BAC and all the other foreign crap go up in smoke. At least we can have a fresh start without the baggage.

The way it is now. Same Game. Rinse and Repeat. Do we really want that ???     

1fortheroad's picture


Read the last sentence (The U.S. Secretary of Treasury receives no compensation for representing the United States) 

The compensation (re. fortune) goes back to you know who, the FED, the same place your hard

earned tax money goes.

From a speech in Congress in The Bankruptcy of the United States Congressional Record, March 17, 1993, Vol. 33, page H-1303, Speaker Representative James Trafficant Jr. (Ohio) addressing the House states:

“...It is an established fact that the United States Federal Government has been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1, Public Law 89-719; declared by President Roosevelt, being bankrupt and insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint Resolution To Suspend The Gold Standard and Abrogate The Gold Clause dissolved the Sovereign Authority of the United States and the official capacities of all United States Governmental Offices, Officers, and Departments and is further evidence that the United States Federal Government exists today in name only.

The receivers of the United States Bankruptcy are the International Bankers, via the United Nations, the World Bank and the International Monetary Fund. All United States Offices, Officials, and Departments are now operating within a de facto status in name only under Emergency War Powers. With the Constitutional Republican form of Government now dissolved, the receivers of the Bankruptcy have adopted a new form of government for the United States. This new form of government is known as a Democracy, being an established Socialist/Communist order under a new governor for America. This act was instituted and established by transferring and/or placing the Office of the Secretary of Treasury to that of the Governor of the International Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part: “The U.S. Secretary of Treasury receives no compensation for representing the United States...

Buttcathead's picture

Benny is giving away the farm.  Dirt Nap Smack Down is here.  Best of luck sheeples.  Nighty Nite