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Ben Lied
Over the years a good number of speeches by our leaders have been marked by history. Abe said, “Four score…”, Jack said, Ask not…”, George said, “Mission accomplished…” I
think we got more of those memorable worlds today from Bernanke. His
comments will be remembered like George’s. They will stick in our minds and
thoughts for decades. And like George’s words, history will prove them
to be a lie. Ben’s lies will cost us trillions, and quite possibly our
way of life. His lie:
I am confident
that the FOMC will be able to tighten monetary conditions when
warranted, even if the balance sheet remains considerably larger than
normal at that time.
How could he possibly be “confident” that this can be done? It has never
been done before. No sane man can make such a promise when there is no
history to guide us. Bernanke is sane, therefore I conclude that he is
lying to us on this critical fact.
What economic environment would exist when “conditions warrant
tightening”? That’s simple to forecast. If inflation goes above 4% in
any 12 month period or averages above 3% in 24 months they would have to
tighten. Bernanke thinks he can sell a few trillion in Bonds in that
environment? Not a chance in hell. If the Fed said, “From now on we will be selling 100b a month”
the bond market would fold. Long-term interest rates would pass 5% in
months. 6% mortgages and competition for credit from the private sector
would collapse the economy.
Bernanke is an academic who studied the Great Depression. He has never
sat on a bond desk. He has no idea what it is like when the holders of
your paper say, “No mas”. He thinks that because there is an
insatiable demand for fixed income today the same conditions will exist
when tightening is required. He says he is confident of that. Not
possible.
For me the Grand Experiment of QE rests on the issue, “Can we get out this?”
If that is in doubt (as I strongly believe) then the policy can only be
viewed as a reckless gamble. Before Bernanke pulls the trigger he needs
to convince me and many others that his confidence is justified.
I want to hear some thoughts from others on this issue. I want to hear
from Brian Sack at the NY Fed. It is he who will have to execute what
Bernanke is so confident about. He would never soft sell that risk. He
knows full well that it can’t be done without the possibility of a
spectacular blowup. He would never use the word “confident”.
I want to hear from the primary dealers and the likes of PIMCO. Put them
on a stand in D.C. and ask if they are confident that this can be
accomplished. Not one would. Get some former Treasury Secretaries to
opine. I would like to hear from Greenspan. NO ONE would say they are
confident on the outcome. I want to see just one credible source chime
in with Bernanke on this. Just one.
Bernanke put his reputation on the line with his “confident” remark. How can anyone be so certain about an uncertain future?
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I don't really think Uncle Ben cares about his reputation, or what we think about him, Bruce. He does, however, care about those in the backgound he serves.
I do think he will be well gone from the Chairman's position WELL BEFORE the really tough decisions are made on liquidity withdrawal. It's simply not gonna be his problem.
Pass the trash? Is that what this is down to?
Absolutely, Bruce. That is exactly what this has come down to. And you are dead on right that no one of any standing will back Bernanke up. But, man, he's been a liar for long time, moving straight in this direction. Where you been? Now, the lies are so deep he's stopped giving a shit and is planning on walking away. He is fully surrendering his reputation, his legacy and his integrity. The banks are happy and he won't be around to have to sell those bonds, and even if he is, bond sharks will be blamed.
Great post, sir. Wisdom and outrage combined are always appreciated.
BK,
Thanks again for the post!
absofuckin'lutely Bruce. The tried and true
Yup!
It appears that Bernanke had a mentor in policy circles.
It was the guy who appointed him the first time around.
"I want to see just one credible source chime in with Bernanke on this" In the previous sentance you wanted testomony from greenspan. If you could edit the text so the reader is not confused in thinking greenspan is a credible source I would appreciate it. I am sure that is not what you implied but that is how it reads. Thanks.
Dr. N. I actually believe that the Fed reads this. They are trying to influence public perception. Well this is main street public perception.
So yes, I used some names that are tainted. But I did it deliberately. Even those guys would not say (with a straight face) that this is something we should be confident about.
Who would I like them to ask? On the top of my list is Chris Whalen at IRA. But "they" would not ask his opinion. They already know it.
b
I'm sure someone there does read this, but ZH is not main street public perception by any stretch. Not even close.
Main street couldn't even begin to explain to you what money is, or where ours comes from.
Main street doesn't even know what the DOW or S&P 500 is, though they've probably heard of them and they're pretty sure it's "good" when they go "up".
Main street probably has very little idea what inflation is, nor can they offer up any one of a number of theories that people use to explain it. Deflation? They'll just look at you like an idiot.
And this is being generous to "main street". There are a lot of towns where many of the residents haven't received the memo on that whole heliocentric solar system thing. I shit you not, I've seen it first hand. We're talking about people who wake up, go to some job a monkey could do, then come home and watch TV while pounding down beers and chain smoking. None of this is reaching them, and if it did it might as well be in Greek.
Sometimes sitting on your hands is the HARDEST thing to do. The FED needs to sit on its hands for 18months and do nothing and let things settle out. The fantasy is that if you keep on slugging away at the problem you an solve it. Grown ups now better.
Bruce wrote "Bernanke is sane, therefore I conclude that he is lying to us on this critical fact."
Are you serious? You say that like it is not normal or common for people like Bernanke to lie. Come on, Bruce, you don't honestly think that anyone from government or the banking oligarch ever tells the truth about anything, do you? Seriously.
Listen people, one of the reasons we got into this mess is the naivete of the population as a whole. People like Bernanke know they can lie, cheat, and steal and there will be no ramifications because most people trust the government and the corrupt system it runs for the benefit of the elite. They have no respect for honesty or the law, so why should you?
The elite believe that laws only apply to the "little" people and they are exempt from following the law. Examples of this are displayed everyday, so it is not out of the ordinary but rather common practice among the elite to lie and their followers in the mainstream media are more than happy to perpetuate the lies with propaganda to mislead the fools who believe anything they say. One can only hope that the elites that know Bernanke is lying but play along because they believe it benefits them will get caught off guard by a black swan event and get crushed when all of these lies and deception gain greater exposure.
Bernanke is destroying the producers and savers of this country to reward the consumers and debtors; with morals like that, expecting this man to ever tell the truth should be the exception, not the norm.
Also, what evidence do you have that Ben Bernanke is sane?
Try the word "delusional". Does that work better?
My own observation of engineers (yes, I have a view from the inside.) is that they tend to become tools of their tools. If I have big intellectual investment in a particular area of skill or special knowledge, I tend to try to apply past experience or expertise to problems because it makes for easier solution. I can feel comfortable and confident of the solution. Sometimes, though I realize after the fact (perhaps suggestion of others) that I could have avoided a lot of work by simply looking at as any person on the street might.
Ben Bernake has (from his Wikipedia resume) a hard worker all his life. Working in high school and at HARVARD where he graduated Summa Cum Laude in Economics (not for sissies). Then, off to MIT where he got his PhD in 1979. Nobel prize winner Robert Merton of 1998 LTCM FLAME, would have been there and a possible influence at the time.
Ben Benrake is obviously a very smart human. But I hypothesize that he is human with a big emotional and intellectual investment in the economic theories he has been trained in. In other words, I believe the postulate of others on this board that Bernake is trying VERY hard to make Keynesian Theory work. "It MUST work, what else is there that will solve the problem."
Far fetched, maybe but what happens to Ben's reputation if it doesn't.
I have seen this "dam the torpedos" approach in industry by corporate leaders who came to grief because of it. In most cases I really liked the individual. Whatever in their personality made them appealing to their people also made them vulnerable to a certain kind of blindness.
Good Luck Ben,
For the record, because the crops were good this year, the national highway system is in place, Detroit, (and other locations) will be able to make cars and engines for trucking, the trains are running, the nation has some technology that cannot be readily copied abroad and the American populace is waking up, we will survive.
When Henry Ford was looking to design an electric starter he tasked some one who had no experience with the item. He wanted a fresh approach.
I agree. Congress should call for inkblot tests to find out what he sees in the butterfly charts. See if anything strikes him as odd. Maybe there's something he'd like to tell us.
I believe he was FLAT ASS fucking calling him a commonplace liar; meaning that the only plausible explanation for such ridiculous commentating is the choice between insanity and untruthfulness.
You seem to think he was talking to you. He wasn't, he's far to removed from reality. It makes better sense if you consider that he was addressing the folks who installed him.
Wouldn't this facilitate the process enormously?
Proposed Government 401k Grab
http://www.humanevents.com/article.php?id=39336
Swap Fed balance sheet debris for the diversified holdings of millions of 401(k) accounts?
Barliman
If they got any closer to doing this than the present chatter you would see real wild in the streets.
You gotta be careful with america. People rib us for not rioting.....
He who cruels last cruels hardest.
Its a race for gray for Bernanke and Obama, our two stewards, and Ben is winning as of now.
have you tried to give bankers a trillion dollars, and then take it back? Ben says he can....
You could tell he was lying....his lips were moving!!!!
"we will continue to cheat while you pay for it"
- Bullshit-Bernanke, king of fraud.
You could tell he was lying....his lips were moving!!!!
You could tell he was lying....his lips were moving!!!!
un........inspirational
ben baby your beard sure has turned a whiter shade of pale.
Procol Harum - A whiter shade of pale 1967
He seems to be aging in dog years.
He is aging in dog years because he KNOWS the game is up, and is having to LIE to keep the charade going. History will not be kind to Ben, but I hope that karma has some sort of mercy on his soul.
I hope karma finds him too but I don't think "mercy" is part of the care-package that will come via the karmic avenue...
A bus named Karma.
+ $1.5 trillion in MBS holdings
Lies, even those delivered expertly, are always burdensome and debilitating. Here's to his early demise.
One can always hope.
CD,
Which one do you want up next?
Brian,
It is very obvious that he lied! But, with an irrevocable?! "License to Print" he can say and do what ever his sick (academic?)mind wants! My take is markets will tank no matter size and timing or "effect" of QE2, we kind of hit the end of the rope, the one slowly getting around Benjie's very thin neck!
Like I said above, I am sure the Fed is reading this. Careful what you say.
To feel this on a personal level: it's like a divorce court judge giving your ex a credit card with no limits and holding you responsible!
Ben lied. No shit.
It's like posting as news "the sun will rise tomorrow."
No kidding!
"We have now sunk to a depth at which restatement of the obvious is the first duty of intelligent men." George Orwell
+++
George Orwell was right.
"We have now sunk to a depth at which restatement of the obvious lie is the first duty of all sociopaths." Cognitive Dissonance
touche
Well said.
Bruce,
They can pretty much do whatever they want. Right now, it's clear they're going to reflate & inflate at all cost. PERIOD.
They can do whatever they want, but that is no guarantee it will reflate or inflate.
As with QE1, the funds will just sit around in banks, no one wants to borrow or spend it anyway.
Wake up, deflation and delevaraging is what we have.
Correction--"they" can do what they want as long as they don't care about the probably horrific consequences of what they "do." Think 1914.
They can pretty much do whatever they want
Leo, there is so much wrong with that sentence. Wait.