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Is Bernanke To Blame For The Rising Global Revolutionary Wave?

Tyler Durden's picture





 

A topic which we anticipated last summer, and which has come to shocking and rapid fruition ever since the beginning of the year with the self-immolation of a Tunisian protester, resulting in a tsunami of violent revolutionary uprisings across the developing world, has been the question of whether and to what degree Bernanke's monetary policies are responsible for what is becoming an indirect wave of suppressionary genocide (today alone, between Libya, Yemen and Bahrain over 500 people have been killed). And while Zero Hedge is far less ambivalent about the underlying cause of the surge in anger (in most of the affected countries, the bulk of their population has to spend well over half of its income on food and energy), and when people who already have nothing, see whatever little they have left taken away as well, they see no downside in violent revolution, there are some more moderate views.

Below we present one, courtesy of reader Chindit13.

While it is a stretch to put this squarely on Bernanke's shoulders,
it is absurd to say that he has no part at all.  Yes, it is a convoluted
path that goes from QE to rising food prices that fan the flames of
already-existing anger and resentment of tyranical and oppressive
governments, but it is a path on which his footsteps are clearly
visible.  The rage may have been simmering with or without higher food
prices, and food prices might have risen somewhat due solely to weather
concerns, but there is more to it.

What exactly does QE achieve on the ground?  What is its stated
purpose vs. what it achieves?  Does it differ from pre-crisis open
market operations?

QE is carried out almost exclusively through the PD's, who also
happen to be the TBTF. That's the same as pre-crisis OMO, albeit there's
a catch.  There is stated intent, as well as Fed announcements that
attempt to create a link between QE and traditional Fed mandates (price
stability and maximum employment).  That is the Fed saying that, so
let's see how well they've done.

The TBTF, who should no longer exist, are being handed free money by
the QE program via sure-thing trades with Bernanke.  What differs from
pre-crisis OMO is that Bernanke buys nearly entire runs, and everyone
knows beforehand what his purchases will be, thus guaranteeing he pays
too much and hands the PD's free money.  Where do the increasingly
liquified banks put this cash generated by Bernanke?  New Loans?  The
data says no, thus, strike one for the Full Employment Fed mandate.  In
fact, what possible incentive do the TBTF banks have to lend?  Why
bother to try to make a cheap spread on a risky loan, when you can go
for broke on the prop desk, knowing that if you win you'll win big
(bonus time) and if you lose you'll be covered?  A quick look at the
revenue sources of the TBTF banks shows where their minds, and actions,
are at.

Incidentally, even the pundits say most new employment in the US is
generated by small business, and small business has traditionally been
funded by less than TBTF banks.  These TBTF banks are not playing
QE.  They are being allowed to go belly up, as we see every Friday
evening in the "Georgia" Report.  In addition, their demise is being
exacerbated by the combination of QE and Geithner's work, since the
marketplace now knows they are not favored institutions and must work
hard to merely survive, much less make money.  In other words, they are
the handicapped capitalists, playing against the Cronyalists.  For those
depositors still playing the game, doesn't it seem likely that they
would be LESS willing to hold assets in a <TBTF bank, even if
insured, since they could avoid the hassle of clearing their accounts if
their little bank went bust?  Fully funding the TBTF actually makes
funding for small banks more difficult.  Don't forget they are all
capped on the other side of the spread by market rates for loans.

Thus, following the money, it is clear to everyone that QE is not
only having zero effect on employment, by its very nature it is unlikely
to ever do so.  Bernanke fails to ever mention this, though he
undoubtedly can see it.  His theory fails, and all that is left is
gift-giving to the TBTFs, something of which he is well aware.

So what do the TBTF's do with the money if not lend (and do not hold
it as excess reserves)?  Look at their quarterlies.  Prop trading is the
answer.  The stock market is one place where this shows up, much to the
delight of Bernanke who wants us all to be of the belief that the
market predicts the future.  Commodity speculation is another.  Too bad
the curtains were not fully off prop desk positions, both domestic and
those held via offshore accounts.  Every indication is that the TBTF's
are smack in the middle of the commodity boom.  It really doesn't matter
that "weather" concerns might have driven them to take these
positions;  the fact is they are flush with cash and indirectly
discouraged by government policy from making loans.  Yes, prices were
soaring in many commodities before the crash, but these commodities were
also being shipped around the world by virtue of end-user
demand.  I periodically wonder if the BDI graph is telling me "stuff" is
being shipped less and stored more often.  Major players in the
commodity market do seem to be buying storage facilities, whether it is
grain silos or ULCC oil tankers.  Even some hedge funds now own ULCC's. 
On the margin, this speculation for speculation's sake is going to
drive prices even in the absence of an end user.

So has QE helped in the Fed's other mandate of price stabilization? 
Yes, but only because Bernanke creates the standard of measurement by
using a selected basket of goods that may not even represent a US
consumer's expenditure pattern.  Certainly it does not represent an
Egyptian's expenditure pattern, where food absorbs at least five times
as much income as a typical US consumer.

Bernanke is not stupid.  He has to see what has been happening, and
he knows full well that money, especially when it is handed directly to
people who earn almost all of their money now from speculating, is going
to drive prices higher.  It is this direct funding of the Wall Street
prop desks that makes monitoring traditional monetary aggregates
meaningless.  A book of matches in a normal person's hands are not
dangerous;  matches in the hands of an arsonist are.  Bernanke also must
know that the basket of goods consumed by an American is substantially
different than what the typical Egyptian or Indian or Pakistani or
Chinese consumes, and that higher food prices more quickly and more
harshly affect these latter peoples' lives.

Sorry for the length, but it is simply a crime to let Bernanke off
scot free.  Stop QE, enforce the Volcker Rules, and break up the TBTF
banks and let's see if that doesn't take some pressure off food prices. 
It certainly won't do any harm.

 

As for some indicative food prices in countries yet to riot, below is a screenshot of what a roasted chicken costs in Shanghai. We leave the FX math to our readers, and certainly not the Chinese BLS which just reduced the food component's portion as a percentage of total CPI (h/t Erico).

 


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Sat, 02/19/2011 - 22:06 | Link to Comment Atomizer
Atomizer's picture

Bernanke is the enabler for World Government transition.

Sat, 02/19/2011 - 22:15 | Link to Comment AN0NYM0US
AN0NYM0US's picture

Columbia Journalism Review

May 17, 2010

 

Mr. Bernanke lived in Winthrop House, a dorm along the Charles River, where classmates included Lloyd C. Blankfein, now C.E.O. of Goldman Sachs

http://www.cjr.org/the_audit/a_times_profile_of_bernanke_is.php

Sun, 02/20/2011 - 09:47 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture
The current elite is highly interconnected - they do not need to be roommates to know each other's private phone numbers. This is one of the deformations that class-based societies like the US show: rich kids get born into hugely valuable networks of personal/family relationships and none of it is merit based.

And think "a class based society ten times worse than today's one" if the gold standard is reintroduced - why do you think rich bankers and politicians want the gold standard so badly?

So guys, if you want to be taken seriously, you need to get your insults right:
Is Bernanke To Blame For The Rising Global Revolutionary Wave?

You have two choices:

  • blame Bernanke for global food price inflation
  • do not blame Bernanke for global food price inflation

If you decide to blame him for increasing food prices, you need to credit Bernanke for the (unintended) side-effect of toppling poorly managed authoritarian regimes - and you have to credit him for the freedom this brought.

If you decide to not blame him, you cannot 'blame' him for the toppling of authoritarian regimes either.

Fair is fair! :-)

Btw., you are pretty silly to blame Bernanke for global food price inflation - which process of global food price increases, magically, started two months before QE2 was even announced - correlating with the Russian wild fires and extreme drought:

http://news.nationalgeographic.com/news/2010/08/photogalleries/100810-ru...

Resulting in export bans to North Africa:

http://www.independent.co.uk/news/business/news/russian-wheat-export-ban...

and other irrelevant food supply shortages and demand spikes on a planet that is heating up faster than ever, which facts ZH never feels important enough to point out :-)

I know ZH is the place for weird conspiracy theories, but which bit of "there's more people for less food, so everyone has to work more and pay more for the same amount of food" concept is so hard to understand? It's not "monetary inflation" - it's called "food got more valuable, because there's less of it".

Global food prices do not care about the weakness or strength of the dollar - they never cared. You are giving Bernanke and other central bankers way too much credit really.

 

Sun, 02/20/2011 - 09:50 | Link to Comment Hdawg
Hdawg's picture

Yawn, you stink of offical organised response. The CFTC, BB and the USDA have pumped and dumped the food chain. You will all hang via your big noses before this is all sorted out and you know it.

Imagine a world without the Khazars.

Sun, 02/20/2011 - 10:43 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

The CFTC, BB and the USDA have pumped and dumped the food chain.

What do you mean? Got any proof/links/description of how they are the major driving force behind global food price increases?

Do you mean it was the CFTC, BB and the USDA that banned wheat exports to North Africa, early August 2010:

Russian wheat export ban threatens higher inflation and food riots

http://www.independent.co.uk/news/business/news/russian-wheat-export-ban...

Not Russia?

 

Sun, 02/20/2011 - 13:05 | Link to Comment Hdawg
Hdawg's picture

Yup...checkout www.marketskeptics.com (atleast I think that's the correct spelling).
This guys is biased but has been calling out them for 2 years. From USDA Predictions of record harvest followed by terrible harvests conbined the CFTC allowing banks to support the $ by supressing the worlds commodity prices with paper contracts they can never deliver on at the same time BB is printing $trillions...welcome the global-hyperinflation my padawan.

Sun, 02/20/2011 - 13:15 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

Please point me to some specific material you think counters the specific material I cited, not just some web-page and claim that "here, it must be there somewhere, find it".

welcome the global-hyperinflation

Hyperinflation needs wages to rise as well - but wages are flat in the US and elsewhere :-)

Instead welcome to a world where "food and other commodities are more expensive when supplies are shrinking and demand is rising".

 

Sun, 02/20/2011 - 13:19 | Link to Comment Hdawg
Hdawg's picture

Wow that was quick...that was like a minute to respond...you guys must be really panicing to get that out so quick...ha ha...pathetic organised alternative media response.

Sun, 02/20/2011 - 14:37 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

Wow that was quick...that was like a minute to respond...

10 minutes if you look at the timestamps.

Care to comment on what I wrote (in substance), instead of weaving conspiracy tales? :-)

Just one quick antidote to your "it must be the Fed driving up global commodity prices!" conspiracy tale:

http://www.indexmundi.com/commodities/?commodity=iron-ore&months=12

Trivia question: Iron ore prices surged when there was no QE going on and actually dropped after QE2 was announced and started. How come speculators and liquidity did not drive up its prices?

Hint: bad weather does not restrict the supply of iron ore.

 

Sun, 02/20/2011 - 21:24 | Link to Comment VodkaInKrakow
VodkaInKrakow's picture

Russia restricted wheat exports for two reasons: the drought and fires that devastated 25% (est.) of the crop.  Vladimir Putin announced price controls to be implemented.

Also, most commodities are priced in dollars. More dollars on the market = cheaper dollar = buys less = prices go up.

If you want to be honest, the combination of BB and weather is driving these prices up. Not only BB, by himself.

Now, let us look at this from a warfare point of view: there are three types of warfare.

1. Military Conflict - Direct, armed confrontation.

2. Social Conflict - replacing your enemies social values and culture with your own (Hollywood).

3. Financial Conflict - Trade and monetary warfare (devaluation to stimulate exports, tariffs)

Financial Warfare, of which the world is experiencing right now, rules the roost of conflict. You have to ask yourself some basic questions.

1. Was everyone, who was at the helm of all these financial empires and central banks, completely ignorant of what they were doing? (Not likely as even The Fed analysts were reporting a housing bubble as early as 2004.)

2. If not, why did they continue? Why did The Fed pursue a policy guaranteed to end in ruin?

3. If Ben Bernanke is aware of what he is doing in regards to helping inflate food prices throughout the world, what is the goal? (Instability).

4. Whose purpose to world wide instability serve? (Not the average person in The West and certainly not the average person anywhere else.)

5. What is the end result? (Now that is a scary competition given that Global Finance will finance every side in a war in order to make money - that is history for you.)

6. How are they making money now? (That is answered. The PDs are frontrunning The Fed and using fiat money to buy REAL WEALTH enforced internationally with contracts.)

Welcome to the obvious.

Sun, 02/20/2011 - 15:56 | Link to Comment Howard_Beale
Howard_Beale's picture

I'd like to point you to the X at the top right hand of your browser and to click it, leave, and not return. We had this fight two weeks ago when Banzai posited this same notion. This is just a rehash of your myopic thinking battling a different bunch this time (I was in on the last one) and frankly, you have brought nothing new to the argument. Yawn.

Just click the X.

Do it.

Now.

Sun, 02/20/2011 - 17:45 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

you have brought nothing new to the argument

There was an argument? You guys only insulted me, you offered nothing credible. If you are right you sure must have some proof somewhere - but you were conspicuously silent when it came to that :-)

Btw., here's something else that exposes the silliness of your "it's all Bernanke's fault!" conspiracy theory: how about commodities that got cheaper during QE?

See:

http://www.zerohedge.com/article/bernanke-blame-rising-global-revolution...

But you do not have to believe your own damn lying eyes :-)

 

Sun, 02/20/2011 - 16:25 | Link to Comment Howard_Beale
Howard_Beale's picture

Hyperinflation only "needs" a loss of faith in a currency. :)

Sun, 02/20/2011 - 17:45 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

Yes, and as a result workers do not trust money either and ask for more, to compensate for higher prices.

Check all historic examples of hyperinflation: they need price inflation everywhere. (You know, so that people are able to drive up prices even more.)

The word you wanted to say instead is 'impoverishment', not hyperinflation.

 

Sun, 02/20/2011 - 11:39 | Link to Comment QQQBall
QQQBall's picture

Che, Castro, Ben "The Bernank" Ali? I think not.

Sun, 02/20/2011 - 14:52 | Link to Comment Michael
Michael's picture

The more info the better;

The 13th Tribe of Khazaria

http://www.youtube.com/watch?v=_ArXEOo2iU0

The Khazarian Conspiracy, Part 1 of 12

http://www.youtube.com/watch?v=Haj-CJOERTs&feature=related

 

Sun, 02/20/2011 - 10:24 | Link to Comment LowProfile
LowProfile's picture

why do you think rich bankers and politicians want the gold standard so badly?

Bankers, hmm...  Can't think of any bankers who want to go back on the gold standard "so badly"...  Politicians tho...  Hm...  You mean Ron Paul?

You are thoroughly fucking retarded.

Sun, 02/20/2011 - 10:43 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

For example central bankers preaching 'tight money' in face of high unemployment ...

They want a fixed amount of money (the gold standard) when there's still high unemployment, either because they are stupid, or because they are sadists and want to see others suffer, or because they are selfish and want to screw the middle class even more. Pick one.

 

Sun, 02/20/2011 - 13:31 | Link to Comment Hdawg
Hdawg's picture

You've lost the audience...you must be new at this.
Change your Avatar and return with a different style, something less obvious.

Imagine a world without the Khazars.

Sun, 02/20/2011 - 14:07 | Link to Comment Which is worse ...
Which is worse - bankers or terrorists's picture

They want a fixed amount of money (the gold standard) when there's still high unemployment, either because they are stupid, or because they are sadists and want to see others suffer, or because they are selfish and want to screw the middle class even more. Pick one.

There certainly must be a (D) All of the Above choice.....

Sun, 02/20/2011 - 14:27 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

There certainly must be a (D) All of the Above choice.....

Yeah. "Pick at least one" was what I wrote initially.

 

Sun, 02/20/2011 - 11:50 | Link to Comment WryObserver
WryObserver's picture

The current elite is highly interconnected - they do not need to be roommates to know each other's private phone numbers.

Care to provide some evidence there, bub? Yes, Washington is a connected society, but it is on both sides of the aisle, not due to some elite conspiracy, but the nature of centralized power, something the Founding Fathers abhored.

 

I also guarantee you that central bankers and the "power elite" do not want to see a return to the gold and silver standard, and the reason is simple: they lose power to mainipulate the currency and enact programs that fit their agenda, if the money supply must be accountable to something outside of them.

 

Sun, 02/20/2011 - 14:30 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

Care to provide some evidence there, bub?

It's in your next sentence:

Yes, Washington is a connected society, [...]

You qualify it with:

but it is on both sides of the aisle, not due to some elite conspiracy, [...]

But did I claim that it was some 'elite conspiracy'? I did not.

but the nature of centralized power, something the Founding Fathers abhored.

Yes, it's very much due to the nature of centralized power and wealth.

You do not seem to realize that two cornerstones of today's libertarian views: the gold standard and even bigger monopolies ('regulation-free market'), actually strengthen centralized wealth.

To add insult to injury, gold-standard strengthened wealth and monopolies are not accountable to the electorate at all. Big companies very much work via command and control - they are centrally planned entities that impact the everyday life of thousands (and often millions) of citizens.

The Founding Fathers would have abhorred what became of the gold standard and the free market by the early 20th century and would have suggested changes to the Constitution to compensate for those effects, had they lived so long.

Were the Founding Fathers still alive today they'd be labeled frothing from the mouth activist liberals. They'd be marginalized and they would be considered unelectable.

 

Sun, 02/20/2011 - 15:38 | Link to Comment The Profit Prophet
The Profit Prophet's picture

Listen Paul....cut out the absolute and complete bullshit that the Oligarchs would love a gold standard!!!!!  If the Oligarchs wanted a gold standard....we would have never done away with the gold standard!!!!  The wealthiest 1% of Americans have more than doubled their portion of the American pie since the end of the gold standard....so your argument is nearly as insane as your support for zirp in an unregulated derivatives market.

Instead of trying to defend your insanity, why not be a man and admit to your unprecedented and catastrophic economic errors!!! (or at the very least admit that everything seems to be going "as planned").

T.E.I.N. everyone! 

Mon, 02/21/2011 - 04:22 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

The wealthiest 1% of Americans have more than doubled their portion of the American pie since the end of the gold standard

Just to give you the standard gold bug answer: it's all just paper money which lost 97% of its value since the end of the gold standard, isn't it?

So which one do you argue, that the USA indeed got much wealthier since the gold standard was dropped, or that it did not?

You cannot have it both ways.

 

Mon, 02/21/2011 - 09:08 | Link to Comment The Profit Prophet
The Profit Prophet's picture

I'm sorry Paul, but this type of answer is off limits to you....you being the biggest paper bug in human history.  Your attempt to reframe the question to the wealth of the entire US populace is just intellectually sad.  There is only one exponentially inflated American pie Paul (to continue with the analogy)...and the oligarchs have used their power and influence to systematically increase their share of the pie to the largest it has been since the last Great Depression.....are you seeing a pattern here Paul?  Marx predicted that capitalism would evolve into socialism through violent revolution, and we are about to witness this play out.  The power that unionization was able to extract from the capitalist owners of production delayed this inevitability, but as more and more unions are dismantled and/or made impotent, these revolutionary forces will be unleashed....(see Wisconsin).

So here's the real dissonance Paul....you are either a liberal or not....please decide!  If so, please stop promoting initiatives that continue to grow the Elites share of the pie.  For every dollar created, their share of that dollar is growing larger and larger, and the systemic imbalance becomes greater.  I'm starting to see lots of middle and lower class austerity pain throughout the world Paul....please describe what form austerity pain will take for the rich - that will somehow equate to the level of pain being felt by the other classes.  This "lack of shared pain" Paul is the very root of violent revolutions.....so wake-up and stop playing both sides of the political spectrum with your twisted economics!     

Sun, 02/20/2011 - 21:29 | Link to Comment VodkaInKrakow
VodkaInKrakow's picture

Do you even understand basic supply and demand?

Commodities are priced in dollars (at least, the dollar is heavily weighted in the basket of currencies)

More dollars = dollars that are worth less.

That is supply and demand.

More dollars that are worth less = takes more dollars worth-less to buy the same thing

Takes more worth-less dollars to buy same thing = thing goes up in price.

Thing goes up in price = inflation

 

There you go. Basic. Simple. Universal. So, what do you not understand?

Yeah, the weather has a role to play also. We cannot only blame BB. We can blame him for a significant increase in the price of commodities.

Sun, 02/20/2011 - 22:41 | Link to Comment chindit13
chindit13's picture

MCT,

Debate is good, so as we say in the boiling streets of the Middle East, ehlen wa sahlen!

I’m also pleased to see that your extensive steroid use has not led to any significant testicular atrophy, as it takes a pair to take a stand against the usual ZH gathering.

I don’t know inflation. So many definitions, so many ways to measure, and so many different consumer baskets. In a way, it’s all relative. I know that twenty years ago it probably cost me 500 standard cups of coffee to buy one standard color TV. Today, it only costs about 80 Starbucks coffee-of-the-day to buy the standard household TV, which has a 50% larger screen, is 10% of the depth of the old one, and has five times the resolution.

That being said, I’ll press my Official Zerohedge F-12 Key on my computer let's see what it spits out.................. “you can’t eat your TV”.

Yes, weather, disease and other supply disruptions have an effect on food prices. I do not deny that, which is why I do not place full blame on Bernanke. Growing numbers of newly wealthy, who want their protein in the form of meat, also has an impact.  Add to that inefficient policies that are solely the result of lobbying (ethanol). While I have not done a regression analysis on all the factors, I cannot help but believe that this list is not complete without adding in QE.

In an average year, the average grain is produced in surplus, and an amount equal to about 17% of production finds its way into storage. There is some fat, though the distribution of surplus is not always uniform. The shortages resulting from recent weather problems and pest infestation might have been ameliorated by the regularly occurring surpluses. That is tough to say, as the marginal buyer often has considerable impact.

The problem as I see it is that Bernanke has created the marginal buyer. I need not link the price moves to the exact date of QE’s start, as anticipation of QE is more than enough to get things rolling. The combination of Bernanke’s and Geithner’s policies has turned the largest banks in the US into F-12 punching spec monkeys. The TBTFs make no money on traditional bank business, or wouldn’t be making any if they used old-style GAAP. The folks who work in those banks, however, still want the bonuses that will allow them to maintain the lifestyle to which they have become accustomed. Everybody from Goldman Sachs to JPM have thus become hedge funds, despite their bank holding company licenses. They are heavily into the commodity markets, and since they read weather and crop reports, too, they are long.

Imagine walking into a third grade class with a giant candy bar. Let the kids bid on it. What’s the price? Now start handing the chubbiest amongst them wads of cash. Wouldn’t it be fair to assume the price is going to rise more than if the cash had not been handed out? Maybe there’s a rich kid in the room. When he sees the chubby kids bidding it up, might he not dip into his allowance and join the fray?

Maybe that’s a “childish” example, but I think it portrays well what the effect of QE is. The banks have nothing else to do with all the money Bernanke is gifting them. They aren’t making loans, but they do want bonuses. They also know they have no downside, so they can bet the (my) ranch.

I cannot see that QE has done a lick of good. One poster here says that it prevented 20% UE. Tough to prove. As I wrote in my original comment, the typical engine of job creation in the US economy is small business, and small business is typically funded by <TBTF banks. Those banks are not allowed into the QE club. The taxpayer does not have their downside. They are being hurt by disintermediation, as depositors see risk in not having a Geithner Put. QE is merely feeding speculative fires, all aimed at maximizing bonuses. Yes, it is also monetizing the debt, albeit with a kind of Joule Effect slippage, at a time when buyers are more scarce, but that is another matter.

While I hold out zero hope that this will happen, I would like to see an end to QE, a break-up of the TBTF, a return of Glass Steagall, and regulating banks along the same lines as utilities, while separating their trading desks from the banking core. We might still have rising food prices, but we would be taking the cash out of the hands of the chubbiest kids.

Whether QE is a more efficient way than invasion of bringing democracy to the Middle East, that is another story.  I think we are all adult enough to admit that the US really does not want democracy everywhere.  Hamas reminded us, if we had forgotten.  A monarch here, a strongman there, a faith-based society here....that's what the US really wants.

?

Sat, 02/19/2011 - 22:20 | Link to Comment eddiebe
eddiebe's picture

My thoughts exactly. Just another flunky doing his masters bidding. Shame!

Sun, 02/20/2011 - 13:35 | Link to Comment Zero Govt
Zero Govt's picture

Yep the Parasite Club are dug-in and will dig themselves deeper into their debt hole, suicide socialism (for the elite) on its usual path.... so let them do their job and we do ours: severe links with Big Govt, Big Banks, Big Corps and Big Unions, the diseased dinosaurs... we have more powers as individuals than we realise, indeed we ARE the most powerful forces in the country by far... you've just got to start deciding and standing up.

Here's Top 100 US Banks that should be safe in the meltdown, get started:

http://weissratings.com/products/Banks-and-Thrifts.aspx

Sat, 02/19/2011 - 22:41 | Link to Comment Paul Bogdanich
Paul Bogdanich's picture

"Stop QE, enforce the Volcker Rules, and break up the TBTF banks and let's see if that doesn't take some pressure off food prices."  He says.

 

Good luck with that.  If we did that where would Obama get the billion dollars for the 2012 campaign?  You have to get your priorities straight, like Obama and the bankers.  So what if hundreds of thousands starve.  Priorities are priorities. 

Sat, 02/19/2011 - 23:18 | Link to Comment jeff montanye
jeff montanye's picture

but on the bright side, obama is so much of a ... wuss that he will stand by waiting for oh, congress, hillary, some general, mr. gates to take the initiative and oppose the centrifugal forces that are and have been working in iran's and the anti-zionist guerillas' favor since bush invaded iraq.  

or he won't.  it doesn't matter a very great deal.

Sat, 02/19/2011 - 22:56 | Link to Comment Yen Cross
Yen Cross's picture

That sounds like a reasonable debate. Good work!

Sat, 02/19/2011 - 23:07 | Link to Comment Twindrives
Twindrives's picture

POS Obama is to blame, he's the dumb ass that re-appointed Benocide.

Sat, 02/19/2011 - 23:22 | Link to Comment jeff montanye
jeff montanye's picture

but you have to admit, pos w gave him most of his really worst policies.  bo is not as creative, determined or as bold as w (worst president ever, although this is still a horse race).

Sun, 02/20/2011 - 01:15 | Link to Comment DaveyJones
DaveyJones's picture

they've been getting progressively worse along with the size of our problems and will continue to do so until it's all over

Sun, 02/20/2011 - 06:28 | Link to Comment Michael
Michael's picture

In every age without fail, when the people finally realize all the booty has be looted by the oligarchs, the people finally get a clue and rise up when there's nothing left for their tables. If we could only figure out a way to nip this problem in the bud before it gets to this point, we would have a better chance of survival.

Oh Yeah. There was once a way in the US to nip this problem in the bud, it's called enforcement of regulations and prosecution of banking criminals, but we don't do that anymore, so it keeps getting worse.

It got to the point of no return when the banksters blew up Building 7, holding all the evidence for prosecutions from the Nasdaq/dot-com crash, preventing the prosecutions. You don't hear much about that bankster scam either.

 

Sun, 02/20/2011 - 12:55 | Link to Comment Bastiat
Bastiat's picture

    Building 7, holding all the evidence for prosecutions . . .

 

. . . and Enron too.

Sun, 02/20/2011 - 11:32 | Link to Comment Twindrives
Twindrives's picture

Benocide Bernanke and his enabler Barry Obama.   'Hope and Change'.......... formerly known as 'Arbeit Macht Frei'.  Coming to a country near you.

Sun, 02/20/2011 - 12:21 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Like Simon Bolivar in South America, The Bernank and his Sack, liberating peoples everywhere from their despotic regimes. Rise up ye faithful and cast off the oppressors. Cast off the shackles. Pawn takes king. Etc.

The great Bernankian Revolution ... coming to a town near you.

 

Sat, 02/19/2011 - 22:10 | Link to Comment financeguru500
financeguru500's picture

You cannot blame him entirely. The consumers of the U.S. voted with their wallets for the past 30 years by purchasing goods made in other countries rather than supporting domestic production.

I would say he is just using the opportunity at hand to the advantage of the IMF.

Sat, 02/19/2011 - 22:25 | Link to Comment AN0NYM0US
AN0NYM0US's picture

I shop at Walmart - great price on Kingsford, but waiting in line with other 'guests'  today I thought to myself America is in some serious trouble

Sat, 02/19/2011 - 23:01 | Link to Comment financeguru500
financeguru500's picture

Yeah, I get that same feeling every time I shop at Walmart lol.

Sun, 02/20/2011 - 01:25 | Link to Comment the rookie cynic
the rookie cynic's picture

You Walmart shoppers should check this out: http://therookiecynic.wordpress.com/2011/02/11/big-sis-wants-you-to-repo...

Big Sister needs all of us to pitch in and keep the world safe while shopping at China-Outlet...uh...I mean Walmart.

Sat, 02/19/2011 - 22:22 | Link to Comment Huck T
Huck T's picture

Simply delusional (and wishful) thinking - the anti-Bernanke line here is clearly slowing minds.

  I'm not saying there is no relation... but the QE2 = Wheat Spike = M.E. uprisings equation is, frankly, a Marxian view of human behavior, of man as economic animal.

Just because you say it with conviction does not make it true.

 

Sat, 02/19/2011 - 22:27 | Link to Comment AN0NYM0US
AN0NYM0US's picture

I commented yesterday about a wheat -farmer and trader- guy I met this past week - he closed his positions after a good run thinking that in the short term south is the only direction.

Sat, 02/19/2011 - 23:08 | Link to Comment Yen Cross
Yen Cross's picture

Shorten your name. Anus. Two syllables cracked in half. We will remember that one for sure.

Sat, 02/19/2011 - 23:30 | Link to Comment jeff montanye
jeff montanye's picture

man as economic animal is hardly exclusively marxist.  it's easy to be above hunger as a motive when you are not hungry.  even as there are manifold motives for uprisings at some point the stalk bests the dromedary. 

Sat, 02/19/2011 - 23:59 | Link to Comment snowball777
snowball777's picture

Then please do show us the loan growth promised...or falling unemployment...or some other alternative that might raise Occam's eyebrow.

The only 'wishful thinking' I see involves prayers to a 'wealth effect' to fill the still gaping hole in the TBTF conveniently TARP'd over with FASB mark-to-myth delusions.

If not speculators, then who?

Sun, 02/20/2011 - 00:13 | Link to Comment steve2241
steve2241's picture

"Man as economic animal" is a central tenet of orthodox economics as taught in the U.S. of A. Marx held just the opposite, did he not?

Sun, 02/20/2011 - 00:25 | Link to Comment disabledvet
disabledvet's picture

perhaps you should change your name to "V. Van GO!"  As in "Lock and Load Van GO!"

Sun, 02/20/2011 - 16:52 | Link to Comment Zero Govt
Zero Govt's picture

Van Gogh is right far as i'm concerned, Bernank is not Master of the Universe, he's just a tubby midget blowing froth into the leaking bubbles of his beloved Club Parasite to keep its members afloat (it won't work).

That has close to fuk all to do with the real economy. If the TBTF bwankers are pumping up commodity bubbles (Reality-Check: JPM was heavily short Silver not long) then also recognise at some point the Commods will come down just as hard the other side.

This sideshow of froth doesn't mean a lot in the big scheme of things (ie. in the real economy). They can mis-alocate assets if they like, it's up to us to prepare our own strategy and be ready to short the MF's at every point the opportunity arise

Sat, 02/19/2011 - 22:23 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Nice analysis chindit, benbabwe get's one on the chin by the chin.

But, but....if the big lie really is the big big lie.... of emergency war powers, 10 federal districts, maritime law, UCC, lifelong servitude...

then? I'm asking this in all seriousness. If Trafficant was not jailed for perjury after his 1993 speech to the house, then all this stuff is moot.

SO I do not think Benbabwe is really "responsible". These actors roles are to keep the play going as long as the innocent child in the audience get's up and calls it for what it is.

Still rankles though....

ORI

http://aadivaahan.wordpress.com/2011/02/16/truth-about-america-truth-about-us/

Sat, 02/19/2011 - 22:29 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Picked up Tata last week ... Keeper at this price.

Sun, 02/20/2011 - 21:17 | Link to Comment Richard Head
Richard Head's picture

Nobody here gives a shit about your stock tips.  But you already know that. A-hole.

Mon, 02/21/2011 - 00:54 | Link to Comment Alienated Serf
Alienated Serf's picture

ORI, trafficant had parliamentary immunity as a legislator.  no legislator can be charged for any statement made on the floor.

Sat, 02/19/2011 - 22:26 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

It's not uncle Ben's fault. They can de~peg in .... " 15 minutes " ....

Blaming Ben for the global inflation is so stupid, let's try blaming the host countries of said inflation first ...

 

 

 


 

 

Sat, 02/19/2011 - 22:48 | Link to Comment tickhound
tickhound's picture

Don't forget bad weather... always remind 'em about the bad weather.

Sun, 02/20/2011 - 10:04 | Link to Comment Hdawg
Hdawg's picture

+1 lol ...

More torrid weather media coverage required!! More weather modification needed!! They're not buying our agenda...I think we got a bit arrogant.

Sat, 02/19/2011 - 22:54 | Link to Comment MolotovCockhead
MolotovCockhead's picture

Unpeg their currency and you think they stand a chance against the likes of George Soros and his pack of hyenas? Even the Bank of England went bust at one time.

Sat, 02/19/2011 - 23:25 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Fuck no, if they de-peg the host countries banking system gets monkey hammered. The beat goes on and on and on ..... 

All the fools that think the dollar supremacy is ending soon......... LOL

They must rollover dollar denominated debt.

 

 

RBI investments in US T-bonds touch all-time high at $41.1 bn

..... " MUMBAI: The Reserve Bank of India’s investments in US treasury bonds touched an all-time high of $41.1 billion in December as returns improved. Moreover, the concerns in the euro area too mounted during the month, prompting the central bank to move to safer and liquid dollar assets. 


India figures among the top 20 investors in US treasury bonds. Throughout the year, it bought bonds worth almost $10 billion, with the bulk of the purchases made in June and July, according to the Treasury International Capital Report released by the US treasury department. 

However, investments remained flat in the subsequent months and picked up again only in December. Overall foreign investors hiked their exposure by $25.8 billion during the month to $4372.6 billion. “Strong macro-economic numbers started changing the sentiments for the US dollar since December. The growth numbers have started looking better and the confidence in the US economy is returning. " ....................

Dutch Ready to Issue First Dollar Bond

......." LONDON—The Netherlands is prepared to issue its first dollar-denominated bond whenever a window of opportunity presents itself, the head of cash management, issuance and trading at the Dutch State Treasury Agency said. "We're at the point we'd be ready to issue the dollar bond," Peter Nijsse said at a meeting Wednesday in London. "I wouldn't be surprised to see a window open [in 2011]," he added.

Mr. Nijsse said the bond would likely have a three-year or five-year maturity because demand from investors is strongest there. " ...............

http://online.wsj.com/article/SB1000142405274870337340457614812241110945

Venezuela's PDVSA To Sell $3B In 2022 Bonds At 12.75% Coupon

CARACAS (Dow Jones)--Venezuelan state-run oil giant Petroleos de Venezuela, or PDVSA, will sell $3 billion in bonds maturing in 2022 as the company looks to raise capital to fund investment plans.

The company said in a statement late Wednesday that it will auction the dollar-denominated securities to Venezuelan citizens and welcomed companies to take part in the offer, especially those involved in the food, healthcare, machinery and petroleum industries.

The bonds will be priced at par and carry a coupon of 12.75%. The offer will end at 11 a.m. Friday and results of the auction will be announced at 4 p.m. the same day, PDVSA said.

http://online.wsj.com/article/BT-CO-20110209-721444.html

 

Fed’s Easy Money Helps European Banks Refinance: Credit Markets

Feb. 1 (Bloomberg) -- The Federal Reserve’s policies for stimulating the U.S. economy are allowing European banks to sell a record amount of dollar-denominated bonds to refinance about $1 trillion of debt maturing this year.

UBS AG, Switzerland’s biggest bank, and Barclays Plc led European financial borrowers in raising $43.8 billion of investment-grade bonds in the U.S. last month, beating the previous record of $42.4 billion last January, data compiled by Bloomberg show. The region’s lenders sold the equivalent of $52.8 billion of bonds in euros and pounds, half what they raised a year ago and making January the slowest start to a year since 2002.

http://www.businessweek.com/news/2011-02-01/fed-s-easy-money-helps-europ...

 

Sat, 02/19/2011 - 23:34 | Link to Comment jeff montanye
jeff montanye's picture

you sound like you might have some to sell.  not as pricey as last day in august either.

Sat, 02/19/2011 - 23:48 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Just stocks ...

NVDA,SPRD,ARMH,GLUU,TTWO,TTM and MPEL and invested the rest of my play money in China stocks last week. 

Sat, 02/19/2011 - 23:53 | Link to Comment AUD
AUD's picture

by Spalding_Smailes

on Thu, 01/20/2011 - 20:18 #891955

Kaboom !!!  The pigmen piss in the face and kick shit onto the inflationist again ....

You said it, so it must be true, cause nothing you ever say is wrong....roll that one over LOL

Sun, 02/20/2011 - 00:21 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Bingo -

 

Open up a 10 year dollar chart. Study it. The greatest fiat/debt implosion in the history of recorded finance.

What fucking crash ??? But, but, but .... It it it it'sssss coming sooooooooon .... yada,yada,yada ....

Also why the fuck are countries and businesses around the globe still issuing dollar denominated bonds ? 

Type in " dollar denominated debt " into the google search window. Study the first 10,20 pages of hits. Mountains of dollar debt on the cb's, banks, businesses books. All sucking Uncle Ben's Shalom's Ballz ....

Sun, 02/20/2011 - 04:25 | Link to Comment zaknick
zaknick's picture

They issue in $ because they expect it to go down in value.

duh

Sun, 02/20/2011 - 10:07 | Link to Comment Hdawg
Hdawg's picture

We are all shorting dollars. It's over.

Sun, 02/20/2011 - 07:00 | Link to Comment MolotovCockhead
MolotovCockhead's picture

"We're at the point we'd be ready to issue the dollar bond,"

 

Smart banker planning to take advantage of the impending collapse of the dollar!

Use it as the World reserved currency now and pay it back with worthless paper that you can't even sell as sourvenir item in eBay. The Fed is now collobrating with their Cronies around the world to profit from the coming disaster!

Sun, 02/20/2011 - 08:06 | Link to Comment Michael
Michael's picture

The Bernank is sowing the seeds of his own arrest, conviction, and incarceration.

Sun, 02/20/2011 - 10:17 | Link to Comment Hdawg
Hdawg's picture

Along with his brothers-in-arms at the USDA, CFTC and MSM. They must shitting themselves. That's the price of selling your soul.

Sun, 02/20/2011 - 11:57 | Link to Comment WryObserver
WryObserver's picture

Nope. Sadly, he is only doing what his superiors are asking him to. Something that is permissable within the scope of the law, and that which he is trained to do.

Many things are permissable, but they may not be beneficial.

Fed policy on balance seeks to affect symptoms, but not root causation, and ultimately why in the long run it will not be effective.

Sun, 02/20/2011 - 13:19 | Link to Comment Bastiat
Bastiat's picture

Spalding_Smailes:   

"They must rollover dollar denominated debt."

 

Must they?

Sat, 02/19/2011 - 22:26 | Link to Comment Zina
Zina's picture

What the Right-wing Assault on Women, Unions, the Environment, Health Care and PBS Is All About

Budget deficits are a ruse to conservatives. What they really want to do is change the basis of American life.

 

The central issue in our political life is not being discussed. At stake is the moral basis of American democracy.

The individual issues are all too real: assaults on unions, public employees, women's rights, immigrants, the environment, health care, voting rights, food safety, pensions, prenatal care, science, public broadcasting, and on and on.

Budget deficits are a ruse, as we've seen in Wisconsin, where the Governor turned a surplus into a deficit by providing corporate tax breaks, and then used the deficit as a ploy to break the unions, not just in Wisconsin, but seeking to be the first domino in a nationwide conservative movement. Deficits can be addressed by raising revenue, plugging tax loopholes, putting people to work, and developing the economy long-term in all the ways the President has discussed. But deficits are not what really matters to conservatives.

Conservatives really want to change the basis of American life, to make America run according to the conservative moral worldview in all areas of life.

In the 2008 campaign, candidate Obama accurately described the basis of American democracy: Empathy - citizens caring for each other, both social and personal responsibility-acting on that care, and an ethic of excellence. From these, our freedoms and our way of life follow, as does the role of government: to protect and empower everyone equally. Protection includes safety, health, the environment, pensions and empowerment starts with education and infrastructure. No one can be free without these, and without a commitment to care and act on that care by one's fellow citizens.

The conservative worldview rejects all of that.

Conservatives believe in individual responsibility alone, not social responsibility. They don't think government should help its citizens. That is, they don't think citizens should help each other. The part of government they want to cut is not the military (we have 174 bases around the world), not government subsidies to corporations, not the aspect of government that fits their worldview. They want to cut the part that helps people. Why? Because that violates individual responsibility.

But where does that view of individual responsibility alone come from?

The way to understand the conservative moral system is to consider a strict father family. The father is The Decider, the ultimate moral authority in the family. His authority must not be challenged. His job is to protect the family, to support the family (by winning competitions in the marketplace), and to teach his kids right from wrong by disciplining them physically when they do wrong. The use of force is necessary and required. Only then will children develop the internal discipline to become moral beings. And only with such discipline will they be able to prosper. And what of people who are not prosperous? They don't have discipline, and without discipline they cannot be moral, so they deserve their poverty. The good people are hence the prosperous people. Helping others takes away their discipline, and hence makes them both unable to prosper on their own and function morally.

The market itself is seen in this way. The slogan, "Let the market decide" assumes the market itself is The Decider. The market is seen as both natural (since it si assumed that people naturally seek their self-interest) and moral (if everyone seeks their own profit, the profit of all will be maximized by the invisible hand). As the ultimate moral authority, there should be no power higher than the market that might go against market values. Thus the government can spend money to protect the market and promote market values, but should not rule over it either through (1) regulation, (2) taxation, (3) unions and worker rights, (4) environmental protection or food safety laws, and (5) tort cases. Moreover, government should not do public service. The market has service industries for that. Thus, it would be wrong for the government to provide health care, education, public broadcasting, public parks, and so on. The very idea of these things is at odds with the conservative moral system. No one should be paying for anyone else. It is individual responsibility in all arenas. Taxation is thus seen as taking money away from those who have earned it and giving it to people who don't deserve it. Taxation cannot be seen as providing the necessities of life, a civilized society, and as necessary for business to prosper.

Above all, the authority of conservatism itself must be maintained. The country should be ruled by conservative values, and progressive values are seen as evil. Science should have authority over the market, and so the science of global warming and evolution must be denied. Facts that are inconsistent with the authority of conservatism must be ignored or denied or explained away. To protect and extend conservative values themselves, the devil's own means can be used again conservatism's immoral enemies, whether lies, intimidation, torture, or even death, say, for women's doctors. Freedom is defined as being your own strict father - with individual not social responsibility, and without any government authority telling you what you can and cannot do. To defend that freedom as an individual, you will of course need a gun.

This is the America that conservatives really want. Budget deficits are convenient ruses for destroying American democracy and replacing it with conservative rule in all areas of life.

What is saddest of all is to see Democrats helping them.

Democrats help radical conservatives by accepting the deficit frame and arguing about what to cut. Even arguing against specific "cuts" is working within the conservative frame. What is the alternative? Pointing out what conservatives really want. Point out that there is plenty of money in America, and in Wisconsin. It is at the top. The disparity in financial assets is un-American - the top one percent has more financial assets than the bottom 95 percent. Middle class wages have been flat for 30 years, while the wealth has floated to the top. This fits the conservative way of life, but not the American way of life.

Democrats help conservatives by not shouting out loud over and over that it was conservative values that caused the global economic collapse: lack of regulation and a greed-is-good ethic.

Democrats help conservatives when they use conservative words like "entitlements" instead of "earnings" and speak of government as providing "services" instead of "necessities."

Is there hope?

I see it in Wisconsin, where tens of thousands citizens see through the conservative frames and are willing to flood the streets of their capital to stand up for their rights. They understand that democracy is about citizens uniting to take care of each other, about social responsibility as well as individual responsibility, and about work - not just for your own profit, but to help create a civilized society. They appreciate their teachers, nurses, firemen, police, and other public servants. They are flooding the streets to demand real democracy - the democracy of caring, of social responsibility, and of excellence, where prosperity is to be shared by those who work and those who serve.

http://www.alternet.org/economy/149980/what_the_right-wing_assault_on_wo...

 

Sat, 02/19/2011 - 22:31 | Link to Comment AN0NYM0US
Sat, 02/19/2011 - 22:34 | Link to Comment Zina
Zina's picture

From my part, I have only one profile at zerohedge.com

Sat, 02/19/2011 - 23:22 | Link to Comment born2bmild
born2bmild's picture

The link is dead, here's another, why be an amateur troll when you can be paid to be 10: https://www.fbo.gov/index?s=opportunity&mode=form&id=d88e9d660336be91552...

Sat, 02/19/2011 - 23:48 | Link to Comment jeff montanye
jeff montanye's picture

whether one or many i (there are seven thousand of me) think he/she/it/they make a good point, if insufficiently careful in defining/refining "conservatives".  

grover norquist is on record with the shrink govt to drown it refrain and the, then, enormous deficits of reagan and follow on ghw bush, largely during an expansion, combined with w's (again largely during an expansion) made bo's (during the "greater depression") seem far more onerous than would have been otherwise.

of course bo's policies have been generally pernicious and the money ineffectively spent on income transfers to the (mostly) deserving poor and the undeserving rich.  and in other countries (say greece) it was primarily socialists who pissed it away during the expansion (1982 to 2008).  but the context was u.s. here.

Sun, 02/20/2011 - 20:13 | Link to Comment magis00
magis00's picture

Holy. Shit.  That's absolutely amazing to me ... forwarding on to about 200 people tout de suite.

Sat, 02/19/2011 - 22:38 | Link to Comment Problem Is
Problem Is's picture

If you want to post an Alternet article...

How about an intro paragraph and "to read the entire article" the link instead of taking up 32" of comment space?

Sat, 02/19/2011 - 23:49 | Link to Comment jeff montanye
jeff montanye's picture

yes

Sat, 02/19/2011 - 22:38 | Link to Comment Yen Cross
Yen Cross's picture

I appreciate your input. What exactly is your point? We are discussing Federal Reserve policy. Not your favorite political point. Are you a 99er? Get with the program, and stay on topic. Thank you.

Sat, 02/19/2011 - 22:41 | Link to Comment disabledvet
disabledvet's picture

PBS?  Dude...it's just about money.  PBS?  Big Bird?  Really?  Even PBS knows "don't use the Big Bird."  Instead "it's Squirrely" who's the rep in "this great struggle"--and no one cares about "Squirrely."  I mean that literally.  By all means "use the euphemism all you want."

Sat, 02/19/2011 - 23:06 | Link to Comment essence
essence's picture

Zina

"Budget deficits are a ruse" you say.
What planet are you living on?

You seem intent on breaking this into a conservative/liberal, left/right theme.
That's passe.

Currently the US (both federal and states) are broke.
What part of "broke" don't you understand?

Far as I can see, the 'citizens' in Wisconsin you mention are merely public unions acting to keep cuts away from themselves.

You claim:
"in Wisconsin, where the Governor turned a surplus into a deficit by providing corporate tax breaks, and then used the deficit as a ploy to break the unions"

Back it up with facts please.
Also show that it is folks other that the affected public union members who are protesting in Wisconsin.

And since I'm not a Wisconsin taxpayer, I'll even defer weighting in to any extent on their internal issue.

But if that sort of behavior comes to my state... then those public union employees will surely get a strong reaction.

"Teachers, nurses, firemen, police, and other public servants" ... if I'm struggling to survive, then I can do without them.

Got that?
Let me repeat it... once I start going underwater, I don't want public unions reaching deeper into my pocket to keep themselves in their former lifestyle.
I prefer, and CAN ... do without their services.

Sat, 02/19/2011 - 23:55 | Link to Comment jeff montanye
jeff montanye's picture

given the levels of debt and debt service it is hard to effectively counter the deflationary depression that began about 2008.  but at least admit it is ironic that now, during the "greater depression" it is time to balance the budget but wasn't particularly that time during the preceding twenty-six year expansion.  that's procyclical economic policy or as i see it, keynes on his head.  at least admit the irony (if not the tragedy).

Sun, 02/20/2011 - 00:30 | Link to Comment disabledvet
disabledvet's picture

beans and bullets, baby.  as in "i've got a bullet to go with these beans."

Sun, 02/20/2011 - 02:55 | Link to Comment StychoKiller
StychoKiller's picture

Conservatives believe in individual responsibility alone, not social responsibility. They don't think government should help its citizens. That is, they don't think citizens should help each other.

Sorry, but are you stoned or stupid?   I happen to believe that people should help each other out, even non-citizens!  Alleviate some suffering today, and stop making such broad generalizations.  Of course, I'm not a conservative, I'm a Libertarian, a Socialist/Progressive's worst nightmare.

Sun, 02/20/2011 - 04:04 | Link to Comment Dave Stoller
Dave Stoller's picture

+1

Slightly off topic, but until "republicans" really become conservative, I'd rather stick with some compassion for the unempolyed fellow next door while we all circle the drain.  Remember the recently republican presidency and congress were responsible for the biggest giveaways to the richest 1% in history.  

The "libertarians" may be right as long as your not gay, female, muslim, or need an abortion.

Anyone who believes that all we need is more republicans to solve this mess is delusional.  If we've only got a few years left to survive why not shift the priorities to education, healthcare and away from the military and the TBTF?

Sun, 02/20/2011 - 10:03 | Link to Comment flapdoodle
flapdoodle's picture

Democrats = Tweedledum

Republicans = Tweedledee

Tweedledum and Tweedledee
    Agreed to have a battle;
For Tweedledum said Tweedledee
    Had spoiled his nice new rattle.
Just then flew down a monstrous crow,
    As black as a tar-barrel;
Which frightened both the heroes so,
    They quite forgot their quarrel

 

Sat, 02/19/2011 - 22:32 | Link to Comment Problem Is
Problem Is's picture

The Bernank's Real Mandate With QE1,QE2, ....,QE'N' is:

  1. Recapitalize the TBTF Wall Street banks who ARE share holders of the FRBNY at the expense of every one else...
  2. Export the turmoil via hot money speculation to other countries so their oligarchy goes down before ours does...

Nice 'coptering Bennie...

Sat, 02/19/2011 - 22:43 | Link to Comment Yen Cross
Yen Cross's picture

The fed of NY is your dovish answer? Come on you can do better than that!

Sun, 02/20/2011 - 07:13 | Link to Comment MolotovCockhead
MolotovCockhead's picture

And his ambition is probably to be the first Chairman of the World Reserve Bank or Universal Reserve Bank...ie. if he can help hasten the collapse of the dollars so that we can usher in world reserve note issue by the one world government.

Sat, 02/19/2011 - 22:34 | Link to Comment kaiserhoff
kaiserhoff's picture

Well done Chindit, and not really such a "convoluted path."  It is inevitable that Ben's infinite liquidity machine spills over into commodities.  Add that to all of the momo chasing algorithms pumping anything going up, and they climb hard and fast.

So the charge on this one is criminal negligence?  I like treason better, but by all means add it to the list.

Sat, 02/19/2011 - 22:41 | Link to Comment Jim Billy Bob J...
Jim Billy Bob James IV's picture

Ben cause QE,

QE causes food inflation worldwide,

Food inflation worldwide causes political revolt,

Political revolt causes Islamo-facist regimes,

Islamo-facist regime cause World War III...

therefore ...

Bernanke causes WW III,

But he is a student of the Great Depression and the Great Depression II never occurs because Ben has caused the end of the civilized world.

Sat, 02/19/2011 - 22:43 | Link to Comment disabledvet
disabledvet's picture

"He got his Master's in the GD, but his PhD in World War III."  I like that.

Sat, 02/19/2011 - 22:45 | Link to Comment Yen Cross
Yen Cross's picture

Your wishfull thinking is troubling! WW 3. Don't you have a life?

Sun, 02/20/2011 - 00:31 | Link to Comment disabledvet
disabledvet's picture

yes, unfortunately.  And TIMES A WASTIN'!

Sun, 02/20/2011 - 02:57 | Link to Comment StychoKiller
StychoKiller's picture

Make sure you hug and kiss your wife and children (or whomever your loved-ones might be!) every day!

Sun, 02/20/2011 - 07:15 | Link to Comment MolotovCockhead
MolotovCockhead's picture

Don't you have a life?

 

No, I am a friendly ghost!

Sat, 02/19/2011 - 23:19 | Link to Comment topcallingtroll
topcallingtroll's picture

Again if dollars are depreciating due to inflation, and another country does not inflate its own currency, then the other country will not notice dollar inflation because the other currency will also buy more.dollars. It now has more dollars to buy the food.

Ben cannot cause dollar based inflation in other countries if those other countries are not simultaneously inflating their own currencies.

Sun, 02/20/2011 - 02:59 | Link to Comment StychoKiller
StychoKiller's picture

Sorry, but a lot of those FRNs are being used to buy oil (by non-exporting countries, that is).

Sun, 02/20/2011 - 03:07 | Link to Comment Assetman
Assetman's picture

I'm not sure I follow the line of thinking on a lot of this.

Inflation is a byproduct of supply and demand on a couple of things: (a) the good or service itself; and (b) the medium of exchange to which the transaction is being conducted.

The Fed is actively increasing the supply of dollars worldwide.  There's a demand for those dollars, but that supply is also being put to use to speculate in dollar-denominated commodities, like food.

If a country does nothing in response to increasing dollar supply, its currency may well rise and be able buy more dollar denominated goods-- but there is usually a problem with that policy.  Said country may rely heavily on exports to increase economic activity and keep its domestic employment robust-- and a strong currency restricts exports.  A country could do nothing and a weaker dollar policy could actually hurt that countries export economy.  Higher unemployment would also most likely result... but, yeah, they would get to buy more dollar-denominated food because of it.  Makes sense to me...

The issue about speculation due to excess dollar supply is no laughing matter.  And it's not just food, it's dollar-denomiated instruments like equity and debt.  If I were a seller of debt, I'd love to issue dollar-denomiated bonds, because I can pay in a depreciating currency while my investor gets a depreciating asset.  

It's the speculation behind too many dollars that causes problems because it raises prices above and beyond what a more balanced market might bear-- and it leaves the commodity/instrument exposed to negative variations in demand.

But maybe I'm just hallucinating...

Sun, 02/20/2011 - 07:00 | Link to Comment LMAO
LMAO's picture

"But maybe I'm just hallucinating..."

 

I seriously doubt that.

LMAO

Sun, 02/20/2011 - 11:10 | Link to Comment DaveyJones
DaveyJones's picture

no I'd say you summed it up and I'd say TCT is on LSD

Sun, 02/20/2011 - 11:59 | Link to Comment topcallingtroll
topcallingtroll's picture

If these countries had not been intentionally following a policy to keep their clownbux lower than our clownbux they would not have had so much mercantilist malinvestment.  If they cannot sell their products at the newly inflated price, but have to suffer a margin squeeze when dollars are devalued, then they were never competitive in the first place. 

There have been a lot of countries attempt to keep their currencies undervalued to gain export share, but this has led to malinvestment and an inability to survive without parasitizing off the USA.

This parasitism has gone both ways.  We get their entire surplus, because they sell stuff at a subsidized rate to us by artificially keeping their clownbux too low.  Their people suffer a lower standard of living to keep up export share.  We benefit from that.

Ultimately they do not intend to keep selling us stuff at a subsidy forever.  As soon as they think they have enough of our capital and industry they will let their currencies float upward.  Many have caught on to their game and we need to shake loose all these official and unofficial pegs before they still are industrial and capital base.

Sun, 02/20/2011 - 23:01 | Link to Comment Assetman
Assetman's picture

I can see where you are going with this, and especially with China.  Just remember that this was a dance we (at least here in the US) were willing to play for quite a long while.  Not only are we talking about goods, we are talking about outsourced labor.

What we really need to do is put an end to the massive malinvestment in our own country before solving the world of its ills.  Part of the issue about the "parasitism works both ways" is that both parties must change their behaviors.

We in the US need to behave more like savers.  But our beloved leaders are providing us incentives to do exactly the opposite.  You know, in order to grow the economy and stuff.

 

Sun, 02/20/2011 - 02:58 | Link to Comment bmwm395
bmwm395's picture

You are dead on.. remember it doesn't have to be, and is not complicated.

K I S S

Sun, 02/20/2011 - 03:06 | Link to Comment Mr Poopra
Mr Poopra's picture

Going perfectly according to plan as outlined by Albert Pike in 1871.

http://www.threeworldwars.com/albert-pike2.htm

Sat, 02/19/2011 - 22:50 | Link to Comment Flakmeister
Flakmeister's picture

He isn't but he sure as hell ain't helping things...

Sat, 02/19/2011 - 23:32 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Is the bottom in yet in rare earths .... ?

Sun, 02/20/2011 - 00:32 | Link to Comment disabledvet
disabledvet's picture

nope.

Sun, 02/20/2011 - 11:10 | Link to Comment Flakmeister
Flakmeister's picture

   No... but for a long term play slowly start nibbling. They are volatile and timing the dip is well nigh impossible. I expect the bottom to coincide with $125 oil or thereabouts.

Sun, 02/20/2011 - 11:42 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

Problem with rare earths is that while production is indeed concentrated in a few places (such as China), actual occurrence is not that rare. So when prices stay high, mines will be opened or reopened.

Also, few of the 'rare' metals are indispensible physically: many of them have substitute technologies, which are just a tad more expensive one way or another. But if the price of the rare metal goes up, those technologies will be viable again.

All in one, I see both 'price ceilings' and 'increased production dip' risks in rare metals - combined with the volatility caused by the (relatively) low total mass of them being used.

More widely used commodities are safer in that respect: we know that there's no easy and cheap substitute for oil in the short run (assuming those Tokamaks remain very expensive disappointments), because we are exposed to oil so much and because it would be so profitable to substitute it 'cheaply'. So the substitutes we have are all more expensive - so they act as price ceilings.

So I see no physical force on the planet that could make the price of oil drop in anytime soon (barring natural fluctuations) - short of scientific miracles and short of well placed ICBMs that would improve the 'demand' side of the equation for a few decades.

 

Sun, 02/20/2011 - 11:14 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

He isn't but he sure as hell ain't helping things...

He isn't helping trying to avoid the repeat of the 1930s, a 10 years long period of depression and world economic crisis?

The jury is still out on whether Bernanke succeeded, but my take is that he'd be guilty of reckless negligence if he didn't at least try ...

What complicates the picture is that in 2008 the world touched the supply & demand squeeze of commodities - then it was all forgotten while the crisis artificially depressed demand ...

Now that we have a clearly worse supply and demand situation, combined with a solar cycle that is heating up, we see a repeat pattern: except that there's no housing bubble to burst at the end of it.

So unless world food production can be ramped up very quick it's gonna be messy and bloody.

 

Sun, 02/20/2011 - 15:24 | Link to Comment RockyRacoon
RockyRacoon's picture

Keep Bernanke on the job:

1. If he is doing the right thing, he will be the World Saviour.

2. If he is doing the wrong thing, he will hasten the end.

Looks like a win-win to me.  All the rest is noise.

Sun, 02/20/2011 - 15:59 | Link to Comment The Profit Prophet
The Profit Prophet's picture

I love the working theory of these Keynesian stooges (read: MCT - Krugman) that the Great Depression could have been avoided with more government stimulus....when the truth of the matter is that more stimulus simply would have led to an even greater depression - much like what we're about to experience.  Of course the real lesson is now perfectly clear....when the rich take more than their fair share of the pie, the whole system crashes regardless of the amount of government spending!!!  It's the ultimate Catch 22: when the system becomes this imbalanced, the only thing that can save it is more spending by the middle and lower classes - but because the system is imbalanced, government largess designed to stimulate the economy favours the rich - which creates an even greater imbalance! 

T.E.I.N everyone!

Mon, 02/21/2011 - 04:17 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

the Great Depression could have been avoided with more government stimulus .... when the truth of the matter is that more stimulus simply would have led to an even greater depression

I hate bursting great conspiracy tales (they are so romantic), but the historic fact is that the Great Depression was successfully fought by dropping the gold standard, by printing more money and by the US government spending it:

  • Here's a graph of the Fed printing money:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

  • Here's a graph of unemployment peaking up to the point the Fed did not print money and dropping sharply once it started printing money:

http://4.bp.blogspot.com/_pMscxxELHEg/SlVu0t0KqXI/AAAAAAAAFxo/rzSqiWrqGu...

  • Here's a graph showing deflation on a rampage while the Fed did not print money - once the gold standard was dropped deflation stopped and price levels (and economic activity) recovered:

http://research.stlouisfed.org/fred2/graph/fredgraph.png?bgcolor=%23B3CD...

You can also look at similar evidence in countries that kept the gold standard longer: for example France held the gold standard 4 years longer - subsequently the depression was a couple of years deeper there, unemployment and GDP growth recovered much slower.

  • Here's a graph of France's real industrial production output compared with the other major economies (it also shows the US recovery):

http://www.princeton.edu/~pkrugman/gd_recovery.png

The industrial productivity graph even shows us the order of how major economies went off the gold standard: Japan, Britain, Germany, US and France.

So yes, we can conclusively say that printing money did solve the Great Depression for the countries that applied this policy measure - and it has badly hurt the countries that have not done it. Rarely is economic data so clear as in the case of the Great Depression.

I'll grant it to you that it is an open question whether printing more money will solve anything today - as every major economy seems to be doing it. This does not change the historic facts of the Great Depression though.

 

Mon, 02/21/2011 - 09:50 | Link to Comment The Profit Prophet
The Profit Prophet's picture

All that your charts prove Paul is that billions of new dollars can pay for lots of new jobs; and if stimulus dollars are actually used to increase productive capacity then the jobs might even endure. Unfortunately most stimulus jobs last just about as long as the new money continues to flow....except in our present day case of course (strange thing that, wouldn't you agree?).  It's almost as if jobs aren't being created this time because new money is flowing somewhere else....gee I don't know....perhaps somewhere where labour is much cheaper than in the US....I wonder if that explains what is going on this time???  It's almost as if the new money that's being created is being controlled by people who think the US isn't the best place to invest this new capital.....hmmm, very strange wouldn't you agree?

I'm sorry I can't throw up a bunch of charts for you Paul, as I'm purely a macro theorist.  Suffice it to say that there may or may not be some validity to your hypothesis of the benefits of monetary stimulus during the last depression....unfortunately the rather timely and unique economic characteristics of WWII prevent any type of conclusive analysis of this point.  Personally I disagree based on my systemic imbalance argument offered above and in an earlier thread. WWII corrected many of these imbalances throughout the world as the means of production was destroyed everywhere but in the US.....where nationalism flowed like honey for the next decade and workers participated more fairly in the growing American pie (with lots of help by the unions.)

T.E.I.N. Paul!   

Sat, 02/19/2011 - 22:52 | Link to Comment rational
rational's picture

"...see whatever little they have left taken away as well, they see no downside in violent revolution,"

The protesters are mostly peaceful until provoked/attacked.  Its the forces of tyranny that are resorting to violence against their own people.  Your pretzel logic blaming Bernanke for the violence would be laughable if the reality of the situation were not so tragic.  As it is, your straining for eyeballs on your ads via outrageous commentary is merely contemptible. 

Sat, 02/19/2011 - 22:59 | Link to Comment Yen Cross
Yen Cross's picture

What is pretzel logic? I'm perplexed. I usually put mustard on something with that name.

Sat, 02/19/2011 - 23:48 | Link to Comment rational
rational's picture

 

 

Sat, 02/19/2011 - 23:48 | Link to Comment rational
rational's picture

 

 

Sun, 02/20/2011 - 11:22 | Link to Comment New_Meat
New_Meat's picture

Rational--you and Ms win!  Getting junked for a post that contains nothing!

Sat, 02/19/2011 - 23:47 | Link to Comment rational
rational's picture

via urban dictionary: "fallible, twisted or circular resaoning that when dissected is wrong, does not make sense or does not explain the situation rationally."

Also, a great album by Steely Dan

 

Sun, 02/20/2011 - 00:00 | Link to Comment Yen Cross
Yen Cross's picture

 Thanks for taking the time. Cheers

Sat, 02/19/2011 - 22:56 | Link to Comment eureka
eureka's picture

Little Ben does what he is told by the emperial elite, the bankster-military-industrial complex' top guns. To understand any crime one first establishes motive. Little Ben's motive is to please his emperial fratboy ivy league ilk buddy bosses,  and their only motive: to preserve and expand U.S. empire, One Unholy Pyramid scheme and mafia racket to climb and hide within for personal gain. Little Ben is quite simply a good old U.S. emperial collectivist.

Sat, 02/19/2011 - 23:07 | Link to Comment topcallingtroll
topcallingtroll's picture

This is interesting and certainly a more detailed description of speculative excess.

However anticipation of inflation and speculative excess causing rising prices is not the same thing as a true sustained inflation.

I hadnt thought about it but the cost of.capital is going to be higher in the non-annointed banks. They dont carry an implicit government guarantee, another way too big too fail is.suffocating the.system.

Sun, 02/20/2011 - 01:39 | Link to Comment the rookie cynic
the rookie cynic's picture

The TBTFs are getting "too bigger to fail" as they eat up market share from failed regional and community banks. JPM-Chase is literally invading my neck of the woods. There's 3 new branches under construction within a ten mile radius of my domicile. As their logo shows, they are the sucking vortex from debt fiat hell. The little guys just can't compete with the PDs. They don't get "money for nothin' and their chicks for free" like Lord Lloyd and Jamie Diamond Cuff-links. http://therookiecynic.wordpress.com/

Sat, 02/19/2011 - 23:15 | Link to Comment Yen Cross
Yen Cross's picture

 Best wishes to you all. Hope the mental juices are flowing. Thanks for your thoughts. I don't offend, I incite. Gotta go through the charts and news for the Asia open. Monday is a holiday in the states, so volume and liquidity should be interesting. Trade well!

Sat, 02/19/2011 - 23:34 | Link to Comment topcallingtroll
topcallingtroll's picture

See you around. Enjoy your comments.

Sat, 02/19/2011 - 23:15 | Link to Comment americanspirit
americanspirit's picture

The indictments at the Nuremburg trials were against people who knew or, by virtue of their command authority, ought to have known of the atrocities being committed. By this standard alone, Bernanke is indictable and should be indicted for his role in the genocidal effects of his policies - regardless of the masters he serves. Hitler in fact served unindicted masters - they rule the banking industry to this day. But then Hitler's germany did not have the legal structure that exists in the world today. Surely somewhere in the Hague there is a prosecutor who can begin to bring these banking conspirators before a court with enforcable criminal jurisdiction.

Sat, 02/19/2011 - 23:26 | Link to Comment born2bmild
born2bmild's picture

Whoops.

Sat, 02/19/2011 - 23:20 | Link to Comment jomama
jomama's picture

chairsatan is just a marionette.

Sat, 02/19/2011 - 23:24 | Link to Comment Milton Waddams
Milton Waddams's picture

Is Ben to blame? That is a tough call right now. However I want to share the following observation on "tolerable inflation" or "inflation targeting". You will be shocked (or not) by who made it:

No greater tragedy, short of war, could befall the free world than to have our country surrender to the easy delusion that a little inflation, year after year, is either inevitable or tolerable. For that way lies ultimate economic chaos and incalculable human suffering that would undermine faith in the institution of free men.

These warnings on tolerable inflation, let alone a policy intended to generate inflation, were offered by William McChesney Martin, Jr., the longest serving Chairman of the Federal Reserve. While I'm at it, he also offered this prescient observation:

[We] should not overlook the way that inflation could damage our social and political structure. Money would no longer serve as a standard of value for long-term savings. Consequently, those who would turn out to have savings in their old age would tend to be the slick and clever rather than the hard-working and thrifty. Fundamental faith in the fairness of our institutions and our Government would deteriorate.

http://fraser.stlouisfed.org/docs/historical/martin/27_03_19570813.pdf

Sun, 02/20/2011 - 01:48 | Link to Comment the rookie cynic
the rookie cynic's picture

Excellent link. Muchas gracias Milton. If you look at US debt and inflation rates, things really took of with Greenspan and are going full nutters with Bernanke. As for me, my "fundamental faith in the fairness of our institutions and our Government" is at an all-time low. Clearly, the "slick and clever rather than the hard-working and thrifty" run the show these days. Sad.

Sat, 02/19/2011 - 23:26 | Link to Comment bob_dabolina
bob_dabolina's picture

I propose it is the Chinese. I really think this is a problem the Chinese have created.

Go.

Sat, 02/19/2011 - 23:30 | Link to Comment topcallingtroll
topcallingtroll's picture

We could take this discussion to a higher level if people would realize that bernanke devaluing the dollar cannot cause third world inflation if the third world countries are not also simultaneously attempting to devalue their currencies or slow down their appreciation

Sat, 02/19/2011 - 23:35 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Yep. And the debt in said countries currency performing this high wire act would make Madoff blush ....

Sat, 02/19/2011 - 23:49 | Link to Comment essence
essence's picture

Really Troll?

So according to you ... Tunisia,Egypt and now algeria, bahrain,libya, etc are manipulating their currencies.
Yes, of course ... it's their own fault. Only the US is privileged to mess with it's currency, "manifest destiny" and that sort of thing.

The only "higher level" to be found here is you sticking your foot yet deeper into your mouth.

 

 

 

Sun, 02/20/2011 - 00:31 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

You should turn off Glee and start reading ......

 

 

1. (C) Central Bank of Bahrain (CBB) Governor Rasheed Al-Maraj told the Ambassador March 18 that the country's political authorities are feeling the heat of public pressure to de-peg from the dollar. He cited rising prices for basic staples as a key factor and pointed to recent bread shortages in Egypt, which he believed resulted from hoarding on the part of a worried public. (Bahrain imports 60% of its food products from EU countries, where the decline of the dollar's value, and by extension that of the Bahraini dinar, has been among the sharpest in the world.)

2. (C) Nevertheless, Al-Maraj confirmed that Bahrain had no plans to sever its peg to the dollar. When asked about reports that Qatar might take steps to de-peg (reftel), he said that he had heard no such news from his counterparts at the Qatari Central Bank.

3. (U) As if to echo the Central Bank Governor's private comments, Bahrain's press commentary reached a new level of alarm on the subject. Arabic daily "Al-Ayam" called on the Bahrain Government and other GCC governments to de-peg their currencies from the U.S. dollar, which it said had "collapsed." The editorial warned that "the drop in the dollar's value is a U.S. conspiracy that President Bush and his administration have plotted to control the markets and weaken the economies in the region."

4. (U) The Arabic daily "Al-Waqt" editorialized that of all countries, the U.S. had been the least affected by global financial difficulties, including the dollar's loss in value, rising commodity prices, and the real estate market collapse. This was proof that America had created these problems as part of a deliberate "conspiracy." The editorial continued, "The decreasing value of the dollar is not scaring the Americans as much as much as it is scaring countries that are tied to the dollar." The writer decried the "economic warfare" that he claimed the U.S. was waging in order to control countries that it has failed to dominate militarily and politically. ********************************************* ******** Visit Embassy Manama's Classified Website: XXXXXXXXXXXX********************************************* ******** ERELI

 

http://www.telegraph.co.uk/news/wikileaks-files/bahrain-wikileaks-cables...

 

GCC unlikely to shift dollar peg

 

The likelihood of the US dollar weakening further in light of the new wave of quantitative easing (QE2) by the US Fed once again risks exposing the vulnerabilities of Gulf Arab countries whose currencies are pegged to the US dollar. The extent of the US dollar’s depreciation in the months ahead, as well as the extent of complementarities between US and Gulf economic cycles, is likely to renew focus on concerns surrounding imported inflation, the cost of trade and the sustainability of regional currency policies.

However, in our view, a shift in currency regime would be highly unlikely.

Gulf economies are on a recovery footing and inflation rates are not a concern in most of the region like they were in 2007-08. At that time, vigorous currency reform speculation stemmed from the underlying disparity between the US’s struggling economy (forcing Fed rates to fall) and the then-booming economies in the Gulf. Economic cycles are no longer completely out of sync, with loose monetary policy serving the interests of both, and hence upholding the viability of Gulf dollar pegs.

http://arabnews.com/economy/article185831.ece

 

Sun, 02/20/2011 - 00:38 | Link to Comment disabledvet
disabledvet's picture

he, he, he, he, he.  Still my Padawan Learner there is the pesky problem of the former 20 million employed types.  Hmmmm......

Sun, 02/20/2011 - 00:55 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

It all comes back to said countries. They can de-peg ...... So this really is not Ben's problem. They de-peg no more inflation.

But they also will no longer have a banking system because it will be monkey hammered the " second " they de-peg. But that is really not Ben's problem either ..... And they must rollover older dollar denominated debt with more dollars.

Sun, 02/20/2011 - 02:05 | Link to Comment disabledvet
disabledvet's picture

are you offering me a job ala Flloyd Blankenfeinstein tho?

Sun, 02/20/2011 - 01:03 | Link to Comment Monetative Easing
Monetative Easing's picture

Great post but you and Smails don't seem to be getting through.  The Fed can be criticized for many things but not the global trade imbalance and certainly not the shocks to the food supply system.

Not to go too far afield but I suspect the run up in food and commodities will be deflationary for the West in the long term.  How many iPads, Coach bags and $250 jeans can the average person purchase if they have to pay signifcantly more for food and gas.  Furthermore, how long can real goods companies keep staffing levels steady when the cost of shipping their products is rising and they cannot pass this increase on to their customers?  When margin compression gets too great, overhead (i.e. jobs) has to be cut.

If you are of the mind that QE is behind the price increases in oil, you could make the argument that its long-term deflationary unless economies are experiencing increasing employment and wage growth.

 

Sun, 02/20/2011 - 01:32 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

The people buying ipads, coach bags, do not really care about food inflation in the USA. It's really not that bad for them. Also most global businesses, the big boys in the USA are booming expanding across the globe Kfc, Starbux, Mcd's ect ........

USA still the top dog by far -

 

..... " The Chinese Commerce Ministry has stressed that China is still far from being the world’s second strongest economic powerhouse as its per capita GDP for 2010 – at about US$4,000 (RM12,190) – ranks it only No. 93 in the world. " .................

 

 

Sun, 02/20/2011 - 01:37 | Link to Comment Monetative Easing
Monetative Easing's picture

Oh I agree that people currently buying those goods are not feeling much of a pinch.  However, over time, the increse costs at the pump and the supermarket are going to cause some to change their behaviors. 

And while the big boys are doing quite well, the margins for Starbucks, KFC, McDonalds et. al. are also shrinking due to increased input costs.   This means they either increase prices which, aside from a few markets like China, is tough to do given the state of employment or watch their margins compress.  If margin compression is sustained for a long period of time, these firms will have to cut jobs. 

Its pretty simple actually.  Unless wages rise, widespread inflation isn't going to materialize.

Sun, 02/20/2011 - 21:21 | Link to Comment dcb
dcb's picture

where in the world do people get the idea that wages need to rise to get inflation.

dude devalue your currency 20% overnight, no wage rise, inflation.

this fallicy astounds me.

Sun, 02/20/2011 - 02:06 | Link to Comment disabledvet
disabledvet's picture

I have an answer for that!  And I will give it to you...tommorow!

Sun, 02/20/2011 - 11:57 | Link to Comment QQQBall
QQQBall's picture

Although i do not buy COH bags, Ipads and the like, I agree with your point. My margins are getting squeezed; however, I will go one further - its not just that as I spend more on staples that I spend less on discretionary, I also cut deeper to try and save more due to fear and uncertainty.

Another issue is the impact of margin compression on employment. Laboe tends to not to be value-added (unless very cheap) in this environment, and legislation like obummercare really is a deal-killer in terms of hiring. 

Its the same reason why "investment" is down; risk-adjusted yields are too low unless you can borrow free money and have a "sure thing" trade.

So Main Street biz gets squeezes, employment suffers and the PDs and insiders rake it  in. 

 

Nice article Chindit - thanks.

 

 

 

Sat, 02/19/2011 - 23:55 | Link to Comment Milton Waddams
Milton Waddams's picture

I believe the argument is Bernanke's easy money policy is driving the astronomical rise in commodity prices due to financial speculation. The world is drowning in money and it naturally will seek out the vehicles that offer the greatest (and often fastest) risk adjusted returns on investment.

It could go to financing business spending on capital improvements but a non-trivial amount of credit worthy borrowers, at the publicly-traded level at least, have enough cash on hand to self-fund projects without tapping the capital markets.

And what's the point of financing capacity improving projects when one of the overarching deflationary headwinds is excess capacity.

In a different time bankers would be financing capacity destroying world wars in an effort to reset the build, bubble, collapse, blow everything up and do it again cycle.

Sun, 02/20/2011 - 00:41 | Link to Comment Peak Everything
Peak Everything's picture

Yes,

plus the Chinese see QE and are shifting from $ to commodities to protect their reserves which is pushing prices up,

plus we are bumping up against physical limits to growth (especially oil) and demand is pushing prices up.

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