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Comedy Central Takes On The Federal Reserve

Tyler Durden's picture





 

Stephen Colbert destroys "Dr. Blankcheck von Moneypants." Must watch clip.

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The Colbert Report Mon - Thurs 11:30pm / 10:30c
Fed's Dead
www.colbertnation.com
Colbert Report Full Episodes Political Humor U.S. Speedskating

 

h/t Zorro

 

 


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Wed, 12/09/2009 - 11:48 | Link to Comment koaj
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excellent

Wed, 12/09/2009 - 15:06 | Link to Comment The Rock
The Rock's picture

Don't miss part deux!

http://www.colbertnation.com/the-colbert-report-videos/258143/december-08-2009/fed-s-dead---bernie-sanders

"It sounds to me you want to handcuff the invisible hand of the market, when the invisible hand must be free to go down Wall St. to give hedge fund managers a reach around."

"Who better to solve the problem than the person who helped to create the problem?  It's like if you're cursed by a witch then you have to get the original witch to take the curse off of you.  Or don't you understand financial fairy tales?"

Being from Vermont, maybe Ben and Jerry can replace Zimbabwe Ben.  At least they can offer flavors like "Credit Crunch" or "Strawberry Clusterfuck".

I love it!  Made my day...

 

Wed, 12/09/2009 - 11:49 | Link to Comment Anonymous
Wed, 12/09/2009 - 11:55 | Link to Comment ChickenTeriyakiBoy
ChickenTeriyakiBoy's picture

classic. love the commercial break before comrade sanders

Wed, 12/09/2009 - 12:10 | Link to Comment Obnoxio
Obnoxio's picture

Thanks for posting this. Colbert's wit is unmatched in my opinion. I hope he continues to bring up the FED on his show.

 

Wed, 12/09/2009 - 12:22 | Link to Comment Steak
Steak's picture

As an aside, my favorite Colbert character ever: Phil Ken Sebben

http://www.youtube.com/watch?v=3o4jjp_fZX0 

Wed, 12/09/2009 - 13:00 | Link to Comment Zro
Zro's picture

I was watching this with my girlfriend last night and she got lost in most of what Colbert was saying. I feel she is of above average intelligence and I explained to her what the FRBNY actually does. She asked, "What's the big deal in the short term when I'll probably finance about 5 cars and a couple of houses in my life with regards to setting interest rates? Also, I know a savings account won't pay much interest ever, so, yea, what's the big deal?" After slapping her around a little bit (joking), I almost agreed with her.

I admit, these market cycles suck big time, but, let's say you were born in 1950. You would've experienced 117 months of an 'official' recession (including this one, 12/2007-12/2009). That means 16% of your life was lived during a recession with avg GDP decline of about 2%.

I'm starting to wonder if the grass is greener on the other side? What's the alternative? If you've ever bashed Bush on being ideological, you can't be a follower of the Austrian school of economics (using praxeology to derive valid economic theories? eek). I'm not saying Keynesian economics is superior, either. I just haven't seen an alternative to the status quo that is pragmatic.

Wed, 12/09/2009 - 13:39 | Link to Comment just.a.guy
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How is full reserve banking, a sound currency(ies) backed by something tangible (gold), and market-determined interest rates not pragmatic?

The real reason it isn't is because there are so many vested interests in the status quo.

Indeed, what is NOT pragmatic is the presumption that a perpetual extension and expansion of national indebtedness will be tolerated by our nation's creditors.  It will end badly, and your example period of 1950-present is laughably myopically short.

One simple explanation for your girlfriend of what the FRBNY has been doing is "enabling the kleptocrats in Washington to sell your grandchildren's future down the river"

Wed, 12/09/2009 - 13:46 | Link to Comment RagnarDanneskjold
RagnarDanneskjold's picture

It's sort of like saying, I only fly once a year, so who cares if the FAA randomly tosses wrenches into jet engines. Purchases of homes and cars are made every day and people plan for 5, 10, 20 or 30 years based on today's interest rates. So by fooling with today's rate, it is screwing up decades of planning. When the rates stay too low for a long time, there are a lot of people who will have screwed up their plans. Then they all fail together when the rates go up. This is called a Depression.

Thu, 12/10/2009 - 05:48 | Link to Comment Anonymous
Wed, 12/09/2009 - 15:48 | Link to Comment WaterWings
WaterWings's picture

Fractional Reserve Banking is slavery. It is not economic freedom. Both sides of wars are funded by these evil,inhuman bankers - the loser signs a treaty and agrees to 'pay it all back'.

so, yea, what's the big deal?

This is not a simple matter of temporary inconvenience. If you agree to pay interest on a loan from them you are enslaving yourself. It is very simple, and they don't want you to know that.

The loan money you agree to pay back did not exist until you signed the dotted line. In fact, it will never 'exist'. When you purchase a home or a car you agree to make payments until the loan is completely paid off, paying an 'agreed' interest rate, a premium, for the convenience of taking control of the home or car without paying in full. But no money is ever exchanged. The loan document is essentially an agreement that if you stop making payments the bank will have to take over, potentially at a loss. Either way the third party, such as the original owner of the home, or Toyota, in the case of a car, is paid in full by the bank - the third party is no longer involved. They have received full payment. But you, my dear consumer, are now a slave.

Why use such a term as slave? Because you are working for someone that never worked for the money in the first place. They 'printed' it. They increased the number of zeros on their ledger because you have agreed to make payments on that money, but it never existed in the first place. That is, the Federal Reserve has the ability to increase the money supply and then pass it on to their 'member' banks: Wells Fargo, Citi, Bank of America, etc. These banks will only take a loss if you stop making payments - and they threaten you with a lower FICO score, which is always fluctuating and at risk of identity fraud anyway, if you decide not to play anymore. So how is this slavery? You are paying interest on money they did not work for. But you had to sweat to get the money to pay that interest. Your sweat goes to these bankers without them doing a thing. If enough of your fellow consumers stop making payments the house of cards falls and the big bank gets a bailout. The small banks just get their assets gobbled up by the big banks; no bailout.

If you, my dear consumer, attempt to create money out of thin air you are put in jail. You are a cheat. But not them. They can create all the money they need, raising this so-called debt ceiling, creating programs like TARP, and other 'bailouts' for risk-taking banksters. That's right. They get your sweat in the form of interest payments, you slave, and they get to take risks because Glass-Steagall has been repealed, and if they fail, you, the taxpaying consumer, get to become the primary investor in their failure: the bailout. They threaten collapse, chaos, and even war if the don't get their bailout from the taxpayer. And then they turn around and lend you, the consumer, money at 10, 20, 30%.

So what is pragmatic? How about a system that cannot be manipulated? How about a system in which losers actually lose and are not allowed to play anymore instead of given huge bonuses? 

That system, is a gold-backed system. Keynes is popular in the current time because he speaks the language of bankers and politicians - not the People. There should be no such thing as inflation. Inflation is at best a hidden tax (increase the money supply to fund inefficient programs, sweetheart deals, and risky investments waiting for a bailout) because the value of the money under your mattress is devalued - you can't buy as much anymore. Why should anyone ever! be content to have less money the next day. You can buy X for $10 today, after inflation it will be $11. Why would you ever want that? How is that ever good? This is no mere inconvenience - it really is theft. So these financial scientists (bankers) and politician friends have devised a near perfect system of control. And because you can't inflate gold (it can't be copied, duplicated, or printed) it's 'value' stays constant. A gold coin will always have a specific weight and purity according to the standards of the mint it came from. That's what's in the Constitution - not an extra-governmental (private) instiution that can create as much money as it needs to maintain control!

Banking should be boring. They should accept deposits and charge money for keeping it safe in their vaults. But don't they pay depositors interest, you ask? Why would they pay you to keep your money safe when you can come in and get it back anytime you like? You can't run a business like that! The point of paying interest on a deposit is because the depositor agrees to allow the banker to loan the money to someone else. But that's not how it works, you say? Exactly. Because everybody knows that if enough depositors come to get their money the house of cards collapses and the FDIC has to step in. This should never happen. There should be no such thing, generally speaking, as a bankrun. A bank will fail if they make too many risky loans. That is, if a banker fails to properly evaluate the 'creditworthiness' of the individuals applying for loans. If too many loans go sour the banker fails and all of his assets are purchased by those making loans that are less risky. No need to ask Keynes what he thinks. Banking should not involve economics, which is really about the effects of human choice. Banking is math. If you deposit money, and you want to be able to get it the next day, you must pay the banker a fee for safekeeping. If you agree that your money can be lent to another, trusting the judgment of your banker, then you should receive part of the profit - and you cannot get it the next day, because it has already been lent! How can you possibly retrieve something that is not there? You banker would think you are an idiot to request money you agreed to lend! But that's what an honest system would work. Instead, we have an 'unlimited' system. It stops working properly if you apply gravity. Ron Paul's 26 year attempt to audit the Federal Reserve is almost more of an inside joke. He already knows that the Federal Reserve is evil - but he has a hard enough time deflecting attempts from the media to portray him as a lunatic as it is - he wants the public to perceive what a mudfight will ensue if they actually knew how the system works.

So growth would be slower. But it is inherently stable. Individuals are likely to take less risk, and they are less likely to get a loan that they probably won't be able to pay back. People sharpen their pencils. People look for other ways to finance their plans by seeking out friends, family, neighbors, etc instead of bankers. The free market is the market in which there is no restriction. But we do not have a free market. We have banksters hiding behind green curtains telling us what is best. The more stable the system the less money the banksters make. They make more money gaming the system: booms and busts - and we start to hear these pompous, paid economists (bankster apologists) tell us they couldn't see this was going to happen, and we all nod our heads, "Nobody saw this coming." So because the banksters never work for any of this money it is in their best interest that you, the simple-minded, ever-trusting consumer is in a perpetual state of paying interest. They are less interested in being paid in full than they are having you pay with your sweat.

Bankers control. Consumers always pay. Maybe you already explained all this to your girlie, my fellow FR-hater, and there is much more, but ask her what has always happened when enough people become apathetic to evil. The reason the founding fathers didn't get around to explaining the free market in the Constitution is because it is the lack of restriction. Real liberty. Let coined precious metals be the pinnacle of our economic system - everything else can be bartered. It keeps the bankers at bay.

I leave you with two quotes, from men of opposite character, that say the same thing using different words:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson, (Attributed)
3rd president of US (1743 - 1826)
Permit me to issue and control the money of a nation, and I care not who makes its laws.
Mayer Amschel Rothschild
Wed, 12/09/2009 - 18:15 | Link to Comment TomJoad
TomJoad's picture

I hereby nominate this posing as "Comment of the Week!"

 

Thanks WW!

Thu, 12/10/2009 - 00:26 | Link to Comment JR
JR's picture

I second that.  Powerful summation, WW.

Thu, 12/10/2009 - 01:00 | Link to Comment Anonymous
Thu, 12/10/2009 - 02:39 | Link to Comment Anonymous
Thu, 12/10/2009 - 12:00 | Link to Comment Anonymous
Thu, 12/10/2009 - 16:05 | Link to Comment Anonymous
Thu, 12/10/2009 - 19:28 | Link to Comment WaterWings
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What if the numbers are fudged? I mean, they wouldn't do that, would they?

Wed, 12/09/2009 - 13:53 | Link to Comment Careless Whisper
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Too funny. Bernanke got fried. If Jon Stewart goes after him I think we could finally put a fork in him.

 

Wed, 12/09/2009 - 14:26 | Link to Comment BorisTheBlade
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Looking forward to it. I hope Chancellor, oh excuse me, Chairman Bernanke isn't going to spill his milk over it. http://www.youtube.com/watch?v=7iksYoLMFzU

Wed, 12/09/2009 - 14:09 | Link to Comment JR
JR's picture

THERE IS NO NORMAL ANYMORE | By James P. Gannon | USA Today

Americans are living with daily angst because, from the economy to health care to foreign policy, our nation is spinning out of control. 

In a recent episode of ABC's new sci-fi drama V, about an alien invasion of "Visitors" seeking to conquer Earth by posing as peace- loving people, there was a scene with a line of dialogue that hit me as one of those "Aha!" moments.

The lead character, FBI anti-terrorism agent Erica Evans, is talking to a young Catholic priest, Father Jack Landry, who shares her conviction that the Visitors are evil. They cannot trust anyone because the Visitors have taken on human form and could be everywhere. "I am taking your advice," the priest says to the FBI agent. "You said to go home and act normal."

She responds: "There is no normal anymore."

That statement, it seems to me, goes a long way toward explaining why so many Americans are angry, confused and worried today. Polls show that 58% of Americans think the country is on the wrong track, suffering an economy that's sick, a politics that's broken, a culture that is growing more violent, coarse and scary, and a government that's out of control. They want things to get back to normal but increasingly feel that there is no normal any more.

Nearly every aspect of American life seems to have veered off course into uncharted territory with unforeseeable consequences.

In the economic realm, only Americans who lived through the Great Depression of the 1930s can remember a time of greater stress. In the midst of a so-called recovery, the economy is still shedding tens of thousands of jobs monthly, with the national unemployment rate already at 10%. In the past, a 4%-6% unemployment rate was considered normal, but that now seems like a distant dream because it takes job growth of about 100,000 a month just to keep the unemployment rate from rising further — given the expected growth of the labor force. So normal unemployment could be years off.

Debt and anger

There is nothing normal about an economy in which the federal government takes over giant automakers, bails out too-big-to-fail banks, buys up nearly all mortgages, keeps short-term interest rates at zero and prints over a trillion new dollars. As the national debt passes $12 trillion and the White House projects $9 trillion more in deficits over the next 10 years, the value of the dollar sinks and the price of gold — America's best fear gauge — rises past $1,100 an ounce.

The anger that boiled over last summer at congressional town hall meetings, and that has roiled the debate over health care legislation, reflects the sense of many Americans that the government is as out-of-control as the economy. Nothing seems normal any more. The health care bills are ridiculously complex, and the competing claims of supporters and opponents so irreconcilable, that citizens are baffled and worried.

It's significant that issues such as abortion coverage and insurance for illegal immigrants have become flash points. These are issues that average Americans can understand and have strong views on. Who can fathom 2,000 pages of legislative jargon? Nobody. So let's fight about what we know and care about.

There is no normal in American politics anymore, either. Both major political parties gravitate toward their extremes, left and right, and the center no longer holds. Most Americans tend to be centrists — a "normal" middle ground — but the parties have abandoned the center to cater to ideologues and campaign contributors on the fringes. There seems to be no political home for American centrists.

In foreign policy, international terrorism is the new abnormal, dominating prospects for war and peace. It is not normal for our wars to drag on for six, eight, 10 years;even in World War II, America's involvement was over in fewer than four years.

Our stretched military

It is not normal for our soldiers to endure three, four, five deployments to war zones in Iraq and Afghanistan. Our military is stretched to the breaking point and our wars are unwinnable.

It is not normal for U.S. soldiers to be gunned down by one of their own Army officers on American soil, as happened recently at Fort Hood, Texas. It breeds a sentiment like that portrayed in the TV drama V, where no one can be trusted and you can't tell your enemy from your buddy.

On top of this, our culture has gone alien. Hollywood churns out a gutter-flow of violence, vampires and video sex. Is it so shocking then that high school students watch and cheer as their schoolmates beat and gang rape a young girl? Aren't they just acting out what they see as "entertainment"? Will this become the new normal?

I don't know how we can get back to normal, if that's even possible. But I am convinced that the political party or candidates that can offer hope of a "return to normalcy" — to borrow Warren G. Harding's winning slogan in the 1920 presidential election — will have strong appeal.

The 2008 presidential election was about "change." The elections of 2010 and 2012 could be about getting control of too much change and returning to normal.

James P. Gannon is a former reporter for The Wall Street Journal and a former editor of The Des Moines Register. He publishes The Rappahannock Voice at www.rappvoice.com.

http://blogs.usatoday.com/oped/2009/12/column-there-is-no-normal-anymore.html

Wed, 12/09/2009 - 14:31 | Link to Comment Anonymous
Wed, 12/09/2009 - 16:36 | Link to Comment JR
JR's picture

It’s incredible to me that this land of individual freedom now receives its daily orders from one man—Benjamin Shalom Bernanke.  He, and the power he represents, determines the value of the people’s wages, their savings, their pensions, their homes, their education, their manufacturing resources, their borders, their culture, their winners and their losers…  He, and his, determine the people’s elections and control those the people elect. Congress and the President ask no questions; they merely parrot orders.

This is totalitarianism.

And, as Aleksandr I. Solzhenitsyn said in The Gulag Archipelago: “It is very naïve to say What for? (The Red Army’s soldiers could not surrender; Soviet Russia’s Article 58-1b provided for execution by a Soviet bullet of all prisoners of war taken by the Third Reich who returned to the Motherland.) At no time have governments been moralists.  They imprisoned and executed them to keep them from doing something.

“They imprisoned all those POW’s, of course, not for treason to the Motherland, because it was absolutely clear even to a fool that only the Vlasov men could be accused of treason.  They imprisoned all of them to keep them from telling their fellow villagers about Europe.  What the eye doesn’t see, the heart doesn’t grieve for.

“What, then, were the courses of action open to Russian war prisoners?  There was only one legally acceptable course: to lie down and let oneself be trampled to death...

"And every other path which, in desperation, your mind may invent is going to lead you into conflict with the Law.”

The Virginian Patrick Henry had unique advice on this very question of conflict with the law.  His suggestion: “If we wish to be free--if we mean to preserve inviolate those inestimable privileges for which we have been so long contending--if we mean not basely to abandon the noble struggle in which we have been so long engaged, and which we have pledged ourselves never to abandon until the glorious object of our contest shall be obtained--we must fight! I repeat it, sir, we must fight!”

Thu, 12/10/2009 - 17:59 | Link to Comment WaterWings
WaterWings's picture

Love that book(s)!

Wed, 12/09/2009 - 14:32 | Link to Comment faustian bargain
faustian bargain's picture

http://en.wikipedia.org/wiki/Normal_distribution

Taleb's writing addresses the importance of 'Extremistan' versus 'Mediocristan'.

Also relevant are the 'long tail' and 'tipping point' theories.

Survival now depends on being ready to deal with Taleb's Black Swan events. This is not in the domain of 'Normal'.

Wed, 12/09/2009 - 15:06 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

http://anonymousmonetarist.blogspot.com/2009/12/mr-hands-wild-ride.html

We speak of a mild outcome to all this, a new normal, as we stuff the pig on the scale of fate. We are so far down the rabbit hole Alice, so arse over tit, that it is quite plausible that the power law being applied here is masquerading mild as wild as well as its' converse.


What if the mild prognostication is deflation or hyperinflation with either A cascading to B or B cascading to A?

What if the Black Swan is just, hope upon hope, muddling through?

Thu, 12/10/2009 - 02:27 | Link to Comment Anonymous
Wed, 12/09/2009 - 15:20 | Link to Comment Anonymous
Wed, 12/09/2009 - 16:10 | Link to Comment Anonymous
Wed, 12/09/2009 - 16:32 | Link to Comment Anonymous
Fri, 12/11/2009 - 16:28 | Link to Comment Anonymous
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