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Bernanke Tries To Explain Why A Ponzi Scheme Is A Perfectly Acceptable System For Post Civil-War America, Fails
The following exchange between Ben Bernanke and Senator Kirk is a must watch for everyone who wonders how Ben Bernanke justifies the fact that America is now an open Ponzi scheme. Kirk's question "in laymen's terms this is one part of the government lending another part of the government money, which would not let to long term confidence once the American people understood the basics a little bit better" relates to the open monetization that the Fed does each and every day at least until the end of June. What Kirk did not ask is what happens when the American people realize just how truly preposterous the Ponzi is, and that all the interest "paid" by the Treasury to the Fed ends up being remitted as cash right back to the Treasury as revenue in essence incentivizing the Treasury to spend and borrow more in order to earn more! This is the most circular Weimarian nightmare scenario imaginable, and we can only hope that "the American people" understand this as soon as possible. As to Bernanke's surprise that the US had a currency without any Federal debt to back it up (yes, it is possible to live within one's means, even for a central bank) can we remind the Chairman that the gold on the Fed's balance sheet, all eight tungsten thousand tons of it, is actually Marked to Market to almost $300 billion, and can by definition be used as a pledge to any liability, such as a currency or excess reserves. But oh yes, how could we forget, using just gold as an asset would never afford us the kind of adamantium price stability that we have seen in recent times. Plus how on earth could one infinitely dilute the dollar if the Fed's balance sheet was limited by actual "assets" that do not require Hewlett Packard tech support every now and then.
h/t m33t3r
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So let me get this straight - zero hedge wants to pay commercial banks interest on your own money !!!!!!!!!!!!!!!
This money is not debt baby - he can inflate this money but it ain't debt.
You go girl Benny B.
BB is being quite logical if you believe the dollar is a form of synthetic gold - through a process of alchemy he is producing vast amounts of the stuff.
The ECB however believes real gold is money yet refuse to expand their balance sheet aggressively and yet expect the populace to pay for unbacked fictional debts.
This is a form of gross intellectual dishonesty.
Give me a honest criminal over those fuckers in Frankfurt any day.
They lack the power of their convictions.
its not a ponzi, its way more like check kiting
yadda yadda. Fuckin rich kids complainin cos theyre not in the game. Stop whining an start rebellin.
Benny the Bean is getting closer to Benny Hill by the Day .....and its debatable who knows less about banking!
He looks like Bearded Willard after fucking with Col. Walter E Kurtz
LMAO - thanks, WB7....
Winning!
Just when you get hopefull, that the cesspool can be emptied and we can finally get our country back on track,...you read something like this and realize it has much further to go,...and it usually has members of the "tribe" involved.
From Wayne Madsen's Report.
(He does some excellent research BTW)
**********************************************
Another dirty federal judge. (Full Story at link)
Summary: Avern Cohn of eastern district of Michigan blocks testimony concerning Carlyle Group and the Bush family in Detroit corruption trials. John Conyers's wife is due to be sentenced by Cohn, while Cohn gagged accused bribe offerer Sam Riddle after he said in pre-trial remarks: "Why don’t you go after the Carlyle-Synagro group? Deal with people on the board, like the Bush family.” As WMR reported, Cohn is being used by Rahm Emanuel to pressure Conyers's through the long prison sentence threat hanging over the Judiciary Chairman's wife.
Tyler, Did you mean adamantine?
Clearly you lack sufficient dorkiness to know the material from which Wolverine's claws are made.
Ammo and silver!
You guys shoud buy 7.62 X 55 Russian ammo.
I like the green tipped "heavy ball" stuff.
Great penetration!
Dont forget a nice bottle of Jack Daniels, a Lazy boy and your soon to be degraded Soul
Yes, a bottle of rye whisky and fondling my .45 Colt single action ... sitting nude on the back porch of my log house in WV.
I am not a boy. Why does every financial site automatically assume a male bias?
My favorite drink has always been Jack + Coke. Maybe when I turn 21, I will experiment with some others
Are you dating?
We got a guy working on it, may not be our best guy, but where ever women are we have a guy workin on it.
LOL
Nerd chub!
The only thing that will happen is you will choke your chicken more often. Get ready to be screwed pal.
Are you a Statist, comrade?
Do you purchase yours from luckygunner.com?
So JPMorgan didn't plummet today but Silver went over $36 a troy.
What gives?
fuk knows but Silver went up and down through $36 so many times today i thought i was watching a fuking Yo-Yo not a pricing screen!!!
PPS from Ben: To all those who think they can resist with weapons: Don't worry, we'll get to you eventually, we are building pilotless armed stealth drones, that don't sleep.
Of course, backing a perpetual note of debt that is used as a currency (enforced by legal tender laws), with debt instruments issued by a private corporation owned by its member financial institutions in proportion to their capital, is backing nothing with nothing.
It is the ultimate manifestation of confusing money with wealth. Yet, deep down, they all know what they are doing. Just listen to them timidly mention the need for this round of Quantitative Easing to end, and why it is necessary for the economy to be sustainable through private business when that happens. But again, if QE was so perfect, why end it now?
The curious thing for me is to watch the quick reaction of anyone who supports this scheme of grand theft to the spectre of deflation. They react like Dracula to a silver cross, which is to say that by their body language they tell us it means the death of the system they live by and that finances their secular Utopian dreams.
Have faith in Comrade President Obama, comrades. He's an expert in finding federal funds for Chicago's midnight basketball program.
If we don't have the balls to riot maybe we can just pretend they don't exist and all start transacting in gold/silver coin in place of their FRN's for as much as possible and hope it catches on with mom and pop stores. Starve the beast.
To me, the Bernank looks tired and I think he should take a nice long holiday.....in Lybia !!
The Bernanke looks like he just got done being ramed in the A@@
Once again, the chairsatan leaves me speechless...
Senator Kirk should have ask the Bernank if he any clue who Ellen Brown was or for that matter the Bank of North Dakota.
b o r i n g , just sayin†
If anyone has the time or understanding I'd love to hear it explained...how the govt borrows from itself, what fees are paid and is there any 'out of bounds' or 'end of the line'....you know, parameters like the rest of us face in our economic decisions.
If anyone has the time or understanding I'd love to hear it explained...how the govt borrows from itself, what fees are paid and is there any 'out of bounds' or 'end of the line'....you know, parameters like the rest of us face in our economic decisions.
The Bernank should have flipped the table over WWE style, got right in Kirk's face and, while shoving a finger in his chest, say "listen up Kurt[sic], it's Kurt right? I'm fucking buying this shit because you myopic, hapless losers could not balance the budget of a lemonade stand."
oh, shit, Milton...... that's a crack-up: tie for 1st place with WilliamBanzai's
http://www.youtube.com/watch?v=3Rl46Dpy-P4&feature=related
man, that vid was, like, aawwwesssome. you're in a close 2nd place
;) Couldn't resist.
and I was laughing so hard, I didn't even get the Captain Kirk part till later. even more perfect... ha!
The end of the Fed is near. The mother of all class action lawsuits is being planned. These guys seem pretty serious.
Suethefed dot com
yeah - let's hope the dimwits in MSM will cover raids of PatriotStorm HQ when the fuckin' goon squads come after them; wish them luck nonetheless
He almost jumped out of his chair. Maybe he internal shock device that our chosen friends implanted was implemented.
I think Bernanke saw his entire life flash before his eyes at that moment. He looked like he so disbelieved what was said. He was totally distraught from that point on in the questioning.
Wow just wow! Calling out the Bernak in the fraudluent prescence that he and his company is, just great! "Ah, well...that was before the civil war" ; as if that has something to do with having a currency and no federal debt, wow Bernak way to try to shutdown the idea that money does not have to be based in debt existence.
It's the "Non-Federal-No Reserve- Corporation"
i think Bernankes leaders must have a buzzer on him, because he jumped out of his seat like he was just buzzed !
this why its a great to have 2 bank accounts......just toss checks back and forth between the 2 accounts and voila......check kiting !!!
maybe china can take the best buy geek squad as collateral for our debauched currency.
A Delaware corporation!
With a nice scary building!
I have an uncle that once thought the way Mr. Bernanke appears to reason. He was convicted of a 1st degree felony; check kiting. He was only trying to pay the construction loan.
They took away his guns. And his right to vote.
It all happened when Jimmy Carter and Paul Volker raised rates to 21%. His only mistake was kiting in a National bank. He began developing a 55+ subdivision at the wrong time.
He survived the ordeal and pushed ahead; it is a beautiful place to live. You would never suspect the sleepless nights ever occurred.
Mr. Bernanke has sleepless nights also. Just like you and me.
I was born in 1954. I have had cake all my life. My middle class parents made sure of that. I never made more than 40K a year. I am not good at long term relationships which require thinking.
But I do believe that I am qualified to make the following statement.
The generation of people born in the USA between 1950 and 1960, are worthless pieces of shit and deserve everything that happens to them.
For for all of you idiots that do not understand this, let me say before you begin, fuck you.
Well, buddy, that group includes me and, by your own admission, you, so I admonish you to go fuck yourself.
Born in '59, watched my elder peers my entire life...totally understand where you're coming from.
A Government is bigger than any Delaware Bank.
This Game is About to End.
All this low outgo-high return ursury ends up where?
Anyone with a Citation (not car) or a Bentley (car), fiddling with inverse Libor machines, fully fed by Fannie!
I prefer 0% interest to Ourselves, and Take Our Chances.
All the boyz can work for us at 500K/Year. The Horror!
Wisconsin just got interesting .
Fuck you.
I applaud your breviloquence
@Junk yard dog
Did Mumma not give you the tit today...
I know breast feeding is tough to stop,but it's time to grow up,and move out of the basement.
Ps.....Mums boobs getting sore
[This is the most circular Weimarian nightmare scenario imaginable, and we can only hope that "the American people" understand this as soon as possible.]---TD
Hi TD. Thanks for the article.
I'm afraid I do not share your "hope" the American people will understand our financial/economic scenario as soon as possible. I give it a zero chance of happening in the general population.
I don't say this because I believe the general population to be "sheeple" as so many here refer to our countryman. (Sheeple is a terribly derogatory term used by many to build themselves up as having superior intellect, insight, or awareness.)
I believe the average person in the US will not become aware of our dire situation---causes and conditions---until long after the devastation. Many reasons why. Maybe one or two here.
First, those who bear most the blame for our plight (bankers, Wall Street, government) will affix the blame elsewhere. A scapegoat.
Another reason: Complexity. While average folks---like me---are capable of learning history, the markets, financial system, banking, international trade, money, debt, inflation, etc., the fact is few people are interested enough to educate themselves about it.
I have little to no hope the general population will know what hit them.
100% chance the bankers, Wall Street, and government officials will pull out all the stops to avert blame from themselves.
Breaking News!!! Well, not really.
I just got back from a big investment firm conference where JPMorgue's Chief Market Strategist said Gold is useless (paraphrase).
Second flash, a well known market bear said Gold was nothing but a source for jewelry (paraphrase).
Third, the moderator was from CNBC and thought Gold was just shiny.
These are our "brilliant minds" at work!
There were only a few gold enthusiasts in the audience as everyone laughed at the manager of the Van Eck Gold fund when he presented his case in front a biased moderator and audience. Sad display, I felt bad for the guy.
As I spoke to people after, probably some of the same ones that laughed, they hold gold exposure in their own portfolios! Unless they are lying, there may be a closet hypocratic metals movement at work. Not a good enough sample but just an observation.
It is very important for people of this nation to understand how important Andrew Jackson was in staving off the first central banker takeover attempt with Biddle. Jackson was the first to be subject to media propaganda through influence captures and stayed resolute in how these self elected monarchs would use their wealth as a weapon of financial war. Even when Biddle contracted the money supply in order to make the causation appear to be that of the Jackson it eventually blew up in his face and our nation had removed the serfdom shackles for the moment.
Now we are faced with an international syndicate that collectively wields their illegal gotten powers of financial influence. The greatest inside joke in central banking history is Jackson appearing on the $20.00 bill. This video clip (as evidenced by Bernanke's pause when faced with logic) proves that banking must be private and not public and competing banks are constructive. Of course banks can hold notes or even official U.S. notes so long as they are backed by silver, gold and platinum and when anyone tells you otherwise that there is not "Enough" gold or silver than they discredit themselves.
A pie is a pie and no matter how you slice it if the value of the over all pie rises so will the slices. Central banking is nothing more than modern day alchemy and the attempt to turn paper and promises into something of value but in the end it is relentlessly proven it creates not gold but temporary credit which inevitably turns to debt or slavery. Economics is the simplest subject going. Math never lies unlike people. Jackson for all his flaws related to Native American relations understood the corruptive capabilities of a small group of people offering dreams of riches without matching economic productivity if the end result of the debt could not be repaid was serfdom. 10-1 fractional reserve lending is a sick joke of undeserved trust when you consider margin accounts for trading is only 4-1 for day traders, 2-1 for non day traders. Yet bankers who have proven themselves throughout history to be undeserving of this trust are permitted to continue this unbridled. When you consider the losses are inevitably transferred to the general populace repeatedly and failure is rewarded you have reverse socialism.
Indentured servitude for the rest of us.
[It is very important for people of this nation to understand how important Andrew Jackson was in staving off the first central banker takeover attempt with Biddle.]---John McCloy
Hi John. Excellent post!
And, I don't think your first sentence is reading the way you intended. To me, it's reading as though Jackson was staving off our first central bank. Which, of course, I know was not your intention.
Regardless, it's a Gold Standard Post.
It is meant to read " staving off the first central banking attempt BY Biddle"
You really can watch that and wonder if the plan isn't to let it crash and then give Bernanke and the Fed the pink slip.
FLASH: Just now, Wisconsin Senate Republicans, lacking the one Democrat vote they would need for a quorum to pass the controversial budget bill, instead formed a special committee to isolate only the collective bargaining portions of the bill and passed it, not needing the budget bill requirement of 20 voters.
An identical bill now must pass the lower branch (assembly) before the governor can sign it.
The bill is said to remove most of the collective bargaining provisions for state public employees, with the exception of police and fire. It’s believed the bill, like the budget bill provisions, allows some collective bargaining related to salaries.
good of them to exempt the police as they are the one
institutional entity that stands between the elite and
the people. also fire response could be important in case
of an unexpected inferno, after all, collectivism isn't
entirely dead.
I really like Michael's point:
If we abolish the Federal Reserve Corporation, The federal government can borrow money from itself at 0% interest and pay no fees to Wall Street. Real Winning!
This is perfect, no Fed, no Primary Dealers, no overhead just the Treasury lending unlimited amounts of money to itself (and Congress, no longer restricted by even a hint of budgetary restraint, can do what it does best - spend!) Maybe it charges itself 0% interest or maybe it charges itself higher interest rates and just pays it back to itself so it can show some income out of the deal. Sweet! Who cares about the friggin bond vigilantes? Rock on USA. Oh yea, make sure my entitlements remain well funded - I deserve it! (I don't really know why but someone said I did and it sounded good so I believe it.)
http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield
The Silver Bullet And The Silver Shield By Silver Shield, on February 25th, 2011 . hmmm"The more we spend the richer we are!" ---Joe Biden, VPOTUS
It's raining Bullshit
http://farm6.static.flickr.com/5099/5469665846_a16e16986e.jpg
honestly, couldn't help myself!
the bernank> "the office"
http://www.megavideo.com/?v=S3ZAGPRK
2009-- Tax, Spend, and Steal. Repeat as Necessary - Daily Bail
Just a friendly reminder.
Should we heap this up on the mountain of existing equally good reasons to burn down this dead wood?
Or should we just ignore it, as well?
I am NO fan of The Bernanke...however He seem beat..and comparing Jackson era monetary and economic time periods is crazy...just nuts...What do you think he might say??? please,,,, Does ZH always think the guy is a fool and the devil..or just wrong on his policy...I thought the latter.
Um...so, you missed the whole chairsatan bit then?
You know too little about Andrew Jackson (Strange enough... I did a project on him in 3rd grade!). We got to do a project about any president of our chosing and I chose Jackson!
Jackson told the jackalls to, "Go screw yourself".
Tell me if any of this sounds familiar
-----------------------------------------------------------------------------
The Second Bank of the United States was authorized for a twenty year period during James Madison's tenure in 1816. As President, Jackson worked to rescind the bank's federal charter. In Jackson's veto message (written by George Bancroft), the bank needed to be abolished because:
* It concentrated the nation's financial strength in a single institution.
* It exposed the government to control by foreign interests.
* It served mainly to make the rich richer.
* It exercised too much control over members of Congress.
* It favored northeastern states over southern and western states.
* Banks are controlled by a few select families.
* Banks have a long history of instigating wars between nations, forcing them to borrow funding to pay for them.
http://en.wikipedia.org/wiki/Andrew_Jackson#Opposition_to_the_National_Bank
Axe:
If you understood what a fraud that fiat, backed-by-nothing money is, then you would not be so perplexed.
The money class prospers as vampires prosper. While the world has something to give, and the population can grow, we don't quite notice the pernicious vampires. But here we are today, and the world has plenty to give, but not so much that we can maintain the lazy status quo which requires "growth", and the vampire class is not doing the conscionable thing -- standing down and trying to be constructive -- they are making some insane, all-in, new world order move. Mainstream media and education are complicit, whether they know it or not.
Andy Jackson was right. He fought the banking class, because they were oligarchs and vampires. Allusions to his day are not out of place.
It's hard to understand until you realize that there are people in this world who have the power to create "real money" out of nothing and give it to men who will do their bidding. They do not have to back the money with anything of value. We have built up an empire and a world order on this fraud, but now the world itself is saying No.
Good luck in your life, Axe. Everyone's life will be subject to revocation in the coming years.
Bernanke to Senate: History? Me study history? I'll have you know that history started with the founding of the Fed in 1913.
Breaking News:
Bernanke Recommends Increasing Retirement Age to 108
It's possible for a country to have money without the Rothschild's being owed for each unit put in circulation. But it hasn't happened since before the civil war.
<HELP> FOR EXPLANATION
Pre-Civil War? See him smile. Martial Law was imposed after the Civil War and has never been lifted. The smile says he knows this well.
WARNING (not for the faint of heart).
Perhaps Ben doesn't like discussing pre-civil war America due to this:
http://xrl.us/bimbs5
Franklin and Washington were perhaps the two very most influential Founding Fathers... followed by Jefferson, Hamilton, Paine and Madison
I know I will get junked. I DON'T Care. I want real discussions!
Charles Limbergh and Henry Ford also had their own opinions of monetary policy of the FED and who owned it! Sometimes the truth really stings in the eyes!
Don't let them stop you, go right ahead.
Plus how on earth could one infinitely dilute the dollar if the Fed's balance sheet was limited by actual "assets" that do not require Hewlett Packard tech support every now and then.
--
lol
gotta keep the typewriter functioning smoothly
some of you guys just FUCKING crack me up...you call out The Bernanke or The Fed..you cheer on gold and silver..But if they ever really pull the FUCKING curtain..ARE any of YOU really FUCKING ready...Cause it will be a long long depression,,,I am ready..long silver eagles, long guns, long food, long a water, and long a site that I can defend, that also my extended family can find comfort...that's take years...I hope to FUCKING God I never have to use plan B....you ASSHOLES claim to want it everyday on ZH...Be careful what you wish for..And hope those ASSHOLES in Washington find a way to kicking the can down road!!! Oh...I also served in public office for 10 years...maybe some of you shitheads should step up and try to change the world...
Relax, have another drink.
There's plenty of Gold in Fort Knox to back a new currency. We can have a new monetary system up and running in 60 days.
Given the tyrant like temper tantrum, I would have never guessed you worked for the state. What a shock? Did you get driven out for corruption? Or did you get your fill of looting? Perhaps the gloss of power got old? Do tell.
Ah ... spoken like a true public servant. I would love to change the world, but alas, I can't muster the necessary funds for a run at the Presidency since I would not accept anything from the banks on moral grounds.
The Axe;
You do realize that people hear, at zh, are not "wishing for it", don't you?
Most of the people who make such idiot comments as yours still seem to think that a debt-deflation (as per Irving Fisher) can be avoided - somehow.
Newsflash smart one;
What occurred in 2008 and 2009, via;
1) nationalizing stocks
2) massive unconstitutional bailouts
3) propping up dead uncompetitive industries
4) 'stimulating' demand via public money and disastrous ZIRP
5) ignoring accounts and actual market prices, simply to pretend you're not skint
6) and printing fiat ... to destroy other economies ... first ... before they allow the US to collapse .. (on better terms than otherwise)
7) and generating inflationary moves
8) and attempting to reinflate assets into a new temporary bubble
;was all done simply to slow, but not halt, nor to reverse the still coming debt-deflation event - the part that still has not occurred, the bit that finally triggers global Depression proper - everywhere.
They delayed it, that's all, Axe. Anyone with some brains and honesty realizes that this is all that happened. No one here is "wishing for it everyday".
Undo all of that policy hocus-pocus, and actually halve the Bush $1.07T 2007-08 FY deficit, as the O'bummer 'promised', and you’re back to a radically collapsed global economy entering a true debt-deflation event - pronto.
So shut your idiotic pie-hole you trolling butthead.
You, sir, win.
You win this:
http://www.youtube.com/watch?v=31M_MdSVxV8#at=105
So it's possible to have a dollar without a trillion dollar debt?
Well... yeah sure, but then I wouldn't have a job.
You work in the ink shop then?
We may not be able to end The Fed as a corporation but we can certainly disenfranchise it of its monopoly over money creation.
Vladimir Lenin
Vladimir Lenin
FT.com mentions Zero Hedge :-) From “Pimco cuts US Treasuries holdings to zero” http://www.ft.com/cms/s/0/d7b68a9a-4a7f-11e0-82ab-00144feab49a.html
The Federal Reserve is buying some $100bn of Treasuries each month and since November has purchased $412bn of government debt under QE2.
By the end of June, the Fed is expected to have purchased around $800bn of Treasuries, pushing its total holdings to $1,600bn
After slashing its government- related holdings to zero, Pimco Total Return’s assets are primarily in US mortgages, corporate bonds, high yield and emerging market debt.
The fund holds 23% of its assets in net cash equivalents, defined as any instrument that has a low sensitivity to movements in interest rates.
The move was first reported by the Zero Hedge website.” :-)
skewped
There you have it-- hang Satanke and Geithner as a sign to any greedy corrupt bureaucrat or policymaker not to fuck the masses or else you get what's coming to you. End the fed, reform the treasury, and issue US dollars. Budget and debt problem solved. Centrally planned social class genocide subsided somewhat. The only thing is to figure out how we get competent policymakers in place of the puppets of the financial cartels and any other business cartel.
FUTURES TANKING FOLKS!!!!!!!!!!!!!!
Better LOG IN.... China went to Trade Deficit.
VERY UNEXPECTED.
Who listens to this Bernankesan anyways? I don't and I wont look at this clip either since it's all too predictable.
This Fed is very very clever - by half. Everyone fretting about a possible "tightening" needs to only study what Ben has already stated as his proposed method for "tightening" - ie. By paying Interest on Bank Reserves at an increasing interest rate.
Now - this appears to be a perversion (heeeheee) of what used to be called "tightening" - which was to remove liquidity from the system. No siree Bob - noyt in the Bernanke "tightening".
See- the Fed intends to pay the banks increasing amounts of Dollars ( labelled as "interest on reserves") - dollars that the Fed will ofcourse create in the usual manner - by instructing the summer intern to punch ina few numbers on her laptop.
So - the "new new tightening" - will actually involve MORE money creation by the Fe which will be given to the banks ( who else?) . The banks may - as the mood strikes - decide to pay granma and granpa a teeny bit more on their savings accounts ( keeping a nice chunk aside for ummm.. bonuses and such).
So -- lets say we get to around $2 Trillion in reserves in the banking system before this socalled tightening starts. Lets say the Fed then over a period of time raises rates to 5%. So .. in effect the Fed will be printing up about $100 billion in fresh money and handing it over to the banks - nice. brilliant.
Wish such brilliant minds were instead focused on how to make better use of out natural gas - and why all the east coast homes are stuill heated with oil!! Or maybe figure out why bridge underpasses that flood everytime it rains - maybe given a bit of thought and the use of some 2000 year old technology called trenches - might just prevent that from happening. Or..........
http://preciousmetalsnews.blogspot.com/2011/03/fed-under-fire.html
new video
In short -- the Bernanke tightening ( if and when it starts) - will be unlike any other tightening in the Fed's history. It will infact resuly in more , not less, liquidity in the system even as short rates creep up. Folks need to try to get their head around the fact that there will be no end to the Fed largesse - even in the tightening phase.
Heh he he . I have an idea for Ben. In order to placate the likes of Ron Paul - end QE on schedule. Then proceed to QT. Of course - as I have elaborated below - banks will get even richer under QT. But -- it might take congress a year or two to get the joke. By then of course - new techniques galore can be called up.
Oh - so wont the Dollar get crushed? well... first of all - the DXY has been as low as 72. At 76 now. So , lets say it gets to 60. So what? most Americans dont know and dont care. The nation will become incredibly competitive with such a cheap currency.
And this assumes Euroland and China are able to hold things together on their end - by no means a given.
In the Fed's defense - those who think they should "tighten" policy to get oil prices or food prices down - need to consider the following.
30 years ago - when the US and western europe were pretty much the dominant consumers of commodities - a tightening ( to reduce demand) could be used to bring down commodity prices. Today, if the US reduces demand in the US , it will simply allow Asia to consume more. See? It makes no sense to create a recession inthe US - just so the Chinese have cheaper oil available to them.
So every country has pedal to the metal. Its called the Tragedy Of The Commons in game theory parlance.
Tragedy of the commons example: "Herders sharing a common parcel of land, on which they are each entitled to let their cows graze. In Hardin's example, it is in each herder's interest to put the next (and succeeding) cows he acquires onto the land, even if the quality of the common is temporarily or permanently damaged for all as a result, through over grazing. The herder receives all of the benefits from an additional cow, while the damage to the common is shared by the entire group. If all herders make this individually rational economic decision, the common will be depleted or even destroyed to the detriment of all."
One other thing. Unlike in the past - the banks are NOT reserve constrained. More or less reserves make no difference to them in terms of their ability to lend. I still hear people talking about why the banks are "sitting on cash" or not "lending out their reserves". I guess not much understanding of how banks work.
No - the banks are not constrained by reserves in this new-new world. They are constrained by their capital. They are constrained by risk-adjusted capital ratios, the fear of further loan losses etc. This has nothing to do with reserves.
So all the old thinking about reserve-ratios and the Fed fine-tuning the economy by adjusting reserves etc - no longer applies. We are in outer space - no gravity here. Dont worry about dropping that spoon .
It would seem that the Great Ponzi scheme of the 21st Century may very well be on the precipice here as the 2 year anniversary of the S&P 666 low has come and gone with the June SPX Futures taking a giant hit overnight on March 10th due in part to China's announcement that an Unexpected Trade Deficit as Export Growth Cools has created weakness in the 'risk' trades..
Here are some Futures charts to ponder..
http://chart.ly/k49oxe7
He's looking as smug as ever. Typical for people who lack imagination of what can happen next.
Copper head and shoulders
http://dawnwires.com/investment-news/copper-chart-head-and-shoulders/
Everything I need to know about what the Bernank is doing is explained here:
http://news.goldseek.com/GoldenJackass/1299704400.php
What is it about Ivory Towers that promote brain damage?? :>(
My dad's is bigger than your dad's!
He can not acknowledge a physical backed currency because .... as those who rally around the war cry of: "it has been money for 4000 years" must understand ... it can be taken physically.
We used to have cash4gold adverts with Ed McMann. Now we got people driving door to door and on local message boards wanting to buy peoples' physical. Check out the discovery network's programming lately. Pawn shops, "pickers", auctioneers, antiquer's. People are willing to steal copper out of churches. If gold/silver goes to $10,000/1,000 you will have people knocking teeth out of old peoples mouths.
That is the rational for gold being barbaric. And there is just as much truth and historical writings to back it up.
But it does not excuse the excesses of the current ponzi and the dirtbags at the top. CNBC were talking about charlie sheen again this morning. "Classic signs of an addict: lose your wife, your kids, your job". Instead of gossiping about a holly wood actor they should have talked about Mozillo, Dodd, Frank, et all
"Classic sign of an addict (to fiat ponzi and the huburis it brings):
Let's make this simple....
Sometimes when one wants to provide remedies for unwanted problematic issues....one can find a solution by the process of questioning elimination....
So the question becomes....what individuals or institutions....if were not present...the problems today would not be present....
Now form the list....
Now put all the individuals in jail where they belong whether or not that they work now or used to work for corporations or government...and take all of their personal wealth....as for companies...shut them down...liquidate them....and pay for government projects ....
And this is just the start....
What is so hard about items that can not be denied ?
Because it is a hot swap of our current buerocratic ponsi for classic fuedalism. The business of fuedalistic governments was gold, serfs, and land (only because the last two produced gold) In the old days it was okay to have gold in your pocket if you were a soldier in the army that won and physically took it. Wash, rinse, repeat, God Save the Queen. God Save the Bernak.
Since the video link is gone here it is: http://www.youtube.com/watch?v=IdoaqiH6GK8