Exclusive: In Q1 Bernanke Spurred Inflation By Successfully Offsetting The Ongoing Collapse Of The Shadow Banking System

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Mon, 06/13/2011 - 23:17 | 1366783 sellstop
sellstop's picture

How did I ever live without ZeroHedge?


Tue, 06/14/2011 - 00:41 | 1366919 jeff montanye
jeff montanye's picture

so true.

Tue, 06/14/2011 - 06:06 | 1367162 goldfreak
goldfreak's picture

yeah but

Tyler couldn't you put out the main point of the article within the first few sentences?


Tue, 06/14/2011 - 08:51 | 1367322 TheTmfreak
TheTmfreak's picture

How did I ever live without ZeroHedge?

This is really simple to answer.

You weren't.

Tue, 06/14/2011 - 04:03 | 1367096 phungus_mungus
phungus_mungus's picture

I vote we all have a fat-finger moment around 4:15 or so this Friday... two or three extra "nauts" each outta do it.... see just how fast the plunge protection team can get their private jets back on the ground! 

Tue, 06/14/2011 - 05:17 | 1367133 Highrev
Highrev's picture



Tue, 06/14/2011 - 07:10 | 1367192 max2205
max2205's picture

Gun + Mouth= Smoking

Tue, 06/14/2011 - 05:16 | 1367134 Highrev
Highrev's picture

How did I ever live without ZeroHedge?

Hear hear.

Tue, 06/14/2011 - 07:03 | 1367187 Reptil
Reptil's picture


Tue, 06/14/2011 - 08:05 | 1367255 I am more equal...
I am more equal than others's picture

... like living without the wheel.

Mon, 06/13/2011 - 23:21 | 1366794 Re-Discovery
Re-Discovery's picture

Like any good magician. 

You look 'here', I mess with crap there.

Mon, 06/13/2011 - 23:29 | 1366820 Quinvarius
Quinvarius's picture

Sounds more like an upper decker.  You watch the bowl flush.  But, you can't figure out why the smell never goes away and the water stays brown.

Mon, 06/13/2011 - 23:37 | 1366831 Re-Discovery
Re-Discovery's picture

ahhh memories of college.  good times.

Mon, 06/13/2011 - 23:20 | 1366798 PicassoInActions
PicassoInActions's picture

So Big Ben is the savier right?

Tue, 06/14/2011 - 00:56 | 1366937 BigDuke6
BigDuke6's picture

Fucking Ben Shalom and his buddies.


Orlando police say they violated a city ordinance restricting the feedings.

Create dodgy financial products and become a millionaire. Set up a soup kitchen and get arrested.

The US looks more and more like the mirror image of the USSR.

As long as we think its a good idea to spend trillions on wars that do nothing for us we will continue on the path to ruin. The real problems will start when we start to break up in the same way as the USSR did and for the same reason... an expensive industrial military complex that adds nothing to the standard and quality of life of its population

Tue, 06/14/2011 - 07:05 | 1367190 Reptil
Reptil's picture

then add a war like Afghanistan and another Chernob.... oh wait

Tue, 06/14/2011 - 08:22 | 1367283 Vagabond
Vagabond's picture

Short term savior, long term disaster.

Mon, 06/13/2011 - 23:22 | 1366802 Crab Cake
Crab Cake's picture

Oh joy, let us herald the coming of the deflationary abyss; (coinciding with drastic austerity) so that our banker overlords may buy up all things of value with their well timed exit and Fed provided fiatscos... or sdrs as the situation allows.

Just imagine, one beautiful world irrevocably indebted to one beautiful all world nation crushing bank. It's.... it just hits me right here, you know? So many really good people have worked on this for so long. I'd like to thank the academy, and the media, oh and the Congress and Senate... We couldn't have done it without you guys. Thank you every one!

My fellow Americans, it is time to tear some shit up. Resistance might very well be futile, but I for one will not go quietly into that good night. Burn it down, it is time for project Mayhem.

Mon, 06/13/2011 - 23:26 | 1366810 GeorgeHayduke
GeorgeHayduke's picture

A little Monkeywrenching is needed you say? I agree. We will see if the mainstream folks can catch onto the idea or if they instead will embrace their new complete peon status.

Mon, 06/13/2011 - 23:26 | 1366811 Fancy Bear
Fancy Bear's picture

Oh, how so much has changed in the last 10 years.

Let's burn this bitch down and start over.

Mon, 06/13/2011 - 23:54 | 1366865 TomGa
TomGa's picture

"Was it over when the Germans bombed Pearl Harbor?"


"Stop it, he's on a roll."

Tue, 06/14/2011 - 01:58 | 1366991 swissbene
swissbene's picture


will not find peace on the streets

until each gentleman armed with a piece

fuck police corporation-states

/tupac paraphrase


Tue, 06/14/2011 - 07:23 | 1367206 j0nx
j0nx's picture

It was so obvious from the start that hyper inflation would never be allowed to happen and was almost comical that some people thought it would end that way. Silly rabbits. Tricks are for kids. Hyper inflation leads to people being able to pay off their debts overnight and own all of their assets after paying the bank back with worthless fiats. The banks will never allow that when they can hyper deflate and scoop up everything of value for pennies on the dollar (POD) instead. That and they drive up the price of commodities as well to make sure there is no extra slack floating around in the middle class able to buy up anything except for commodities, which the banks already own of course. It's the same old once a century or two scam that they pull and the masses suck for it every time. Only this time they are much more brazen than they used to be. Probably because the population is much more useless and retarded than ever before.

Mon, 06/13/2011 - 23:25 | 1366809 DoChenRollingBearing
DoChenRollingBearing's picture

Tomorrow is the day everyone has been talking about (June 14, "do not play").

A great day to buy some gold, guns, rice...  Pay in cash!

Mon, 06/13/2011 - 23:30 | 1366815 Alcoholic Nativ...
Alcoholic Native American's picture

No shit, he basically took the budget off the books, you know, like the Pentagon.   QE1 never stopped, I wish you retards would stop giving these extensions other names QE2 QE3, wtf shut the fuck up, that too is propaganda, the FED is free floating the ENTIRE WORLD FUCKEN ECONOMY  you fucken reatards.

Mon, 06/13/2011 - 23:34 | 1366826 Quinvarius
Quinvarius's picture

And it was going on for Bush's entire 2 terms as well.

Mon, 06/13/2011 - 23:48 | 1366849 Coke and Hookers
Coke and Hookers's picture

Yep, the Fed is printing/devaluing money for the entire world now. It's economic warfare against the global serf class and the Fed is the arsenal used for the killing. When someone resists, he's branded a tyrant and a 'revolution' arranged. If that doesn't work, NATO is sent into action. After that, the serfs can happily accept freshly printed fiat via the IMF - like this:


Just wait until the EU countries integrate their 'national budgetary policies' and the ECB can really start up its printing press - then we'll see some heavy shit:


Tue, 06/14/2011 - 07:45 | 1367212 Reptil
Reptil's picture

Awesome... so.... the solution for total FISCAL INCOMPETENCE and CORRUPT CRONYISM is .. more of the same but then on a bigger scale? Right!

Whatever Trichet has been smoking, I want it, I need it, I gots to have it! It's delusional to assume the dream can be saved by transferring power to exactly those that created the problem in the first place.

The problem of the EU is NOT the economy breaking down, it's the decade of corruption in the unholy marriage between power hungry politicians and banks that stop printing only when they run out of ink. Austerity will only WRECK the economy, thus making it impossible to grow out of the debt.

Here's a letter of the EU budget accountant office, who refused consequently for years to sign off on budgets with more holes and disappearing money than a swiss cheese (or Edammer, whatever you prefer) It's long and boring, but I summarise their conclusion: "Your budget sucks, we won't sign."



And now... finally, the politicians are doing an 180, and are on ramming course with the EU and ECB.

phew... that's a relief? they smarted up? like the Pakleds in Startrek TNG ep 143? http://images.wikia.com/memoryalpha/en/images/b/bf/Grebnedlog.jpg

Our representatives realised the danger of throwing money into an insolvent financial system, just in time?.......

NO just a year too late. That's our money you suckers spent, in 2010, by throwing it in artificially created black holes.


I think we have a bright future ahead of us, apart from CERN where they bump things that boink in the night, we have another interesting phenomenon to study, the black hole singularity that is Brussels. Maybe we can ask G. Papandreou to pilot an experimental craft in there, reportedly he's been there and came back... <insert curseword here>



Mon, 06/13/2011 - 23:52 | 1366856 Bay of Pigs
Bay of Pigs's picture

No need to sugar coat this...

Go ahead, tell us how you really feel.

Tue, 06/14/2011 - 04:16 | 1367103 PY-129-20
PY-129-20's picture

Just don't eat a banker. Their lifestyle doesn't sound healthy with all these drugs and stuff. But if you really want to cook a banker, you can try this recipe...

  • 1/3 cup Dijon mustard
  • 1/4 cup honey
  • 2 tablespoons mayonnaise
  • 1 teaspoon steak sauce
  • 4 skinless, boneless banker breast halves
  1. Preheat the grill for medium heat.
  2. In a shallow bowl, mix the mustard, honey, mayonnaise, and steak sauce. Set aside a small amount of the honey mustard sauce for basting, and dip the banker into the remaining sauce to coat.
  3. Lightly oil the grill grate. Grill banker over indirect heat for 18 to 20 minutes, turning occasionally, or until juices run clear. Baste occasionally with the reserved sauce during the last 10 minutes. Watch carefully to prevent burning!
Tue, 06/14/2011 - 04:39 | 1367109 OldPhart
OldPhart's picture

You forgot the best part.


First, shoot a banker in the head.  You don't want to eat the brain anyway. 

Then slowly slice large segments of flab grown during the bailout/bonus era.  (It's the most bitter part.)

Mon, 06/13/2011 - 23:38 | 1366828 SparkyvonBellagio
SparkyvonBellagio's picture


Stop the give aways and get the USA boots off of foreign soil.


We'd probably have a Friggin Surplus then!

My God this is simple.

Phuuuuckin' idiots in Washington.


We have more than enough Coal and Natural Gas to fuel our energy needs for 200-300 years.  We don't need foreign oil. We have enough. If we need anything extra our NAFTA partners Canada and Mexico could most likely help out.

Mon, 06/13/2011 - 23:37 | 1366832 blindman
blindman's picture

Activists to Occupy Financial District’s Liberty Park Until Demands Are Met – Operation Empire State Rebellion Begins
June 13th, 2011

"beauty is the antidote to fear." gerald celente
The Financial Road to Serfdom:
How Bankers are using the Debt Crisis to Roll Back the Progressive Era
By Michael Hudson
June 13 2011 "Information Clearing House"
.."This is what today’s financial warfare is about. At issue is the financial sector’s relationship to the “real” economy. From the latter’s perspective the proper role of credit – that is, debt – is to fund productive capital investment and spending, because it is out of the economic surplus that debts are paid. This requires a financial regulatory system and tax system to maximize growth. But that is precisely the fiscal policy that today’s financial sector is fighting against. It demands preferential tax-deductibility for interest to encourage debt financing rather than equity. It has disabled truth-in-lending laws and regulations to keeping interest rates and fees in line with costs of production. And it blocks governments from having central banks to freely finance their own operations and provide economies with money. And to cap matters it now demands that democratic society yield to centralized authoritarian financial rule." ..
"But the tables are now turning, from Icelandic voters to the large crowds gathering in Syntagma Square and elsewhere throughout Greece to oppose the terms on which Prime Minister Papandreou has been negotiating an EU bailout loan for the government – to bail out German and French banks. Now that nations are not raising money for war but to subsidize reckless predatory bankers, Jean-Claude Trichet of the ECB recently suggested taking financial policy out of the hands of democracy.

But if a country is still not delivering, I think all would agree that the second stage has to be different. Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say in the formation of the country’s economic policies if these go harmfully astray? A direct influence, well over and above the reinforced surveillance that is presently envisaged? …

At issue is sovereignty itself, when it comes to government responsibility for debts. And in this respect the war being waged against Greece by the European Central Bank (ECB) may best be seen as a dress rehearsal not only for the rest of Europe, but for what financial lobbyists would like to bring about in the United States."

Tue, 06/14/2011 - 08:00 | 1367249 Reptil
Reptil's picture

"beauty is the antidote to fear." gerald celente


Michael Hudson's article also good. But perhaps a bit long for the iPad generation.

Mon, 06/13/2011 - 23:41 | 1366834 Raymond_K_Hessel
Raymond_K_Hessel's picture

Can anyone dumb this down for me?  Are we actually heading for deflation?

Mon, 06/13/2011 - 23:44 | 1366843 holdbuysell
holdbuysell's picture

I think the point is that without intervention, yes, because the money supply (read: credit/debt) is shrinking. This is the classic definition of deflation: contracting money supply.

Mon, 06/13/2011 - 23:49 | 1366855 Raymond_K_Hessel
Raymond_K_Hessel's picture

I guess this is where I'm getting hung up.  If credit/debt is still shrinking, and all of the money the Fed is printing up is really going to fill this massive hole that was created during the 2008 crisis, is the printing really inflationary?  I mean, it seems like it is, don't get me wrong, but this article, and the one recently about how all of QE2 went to Europe really made me start to question how inflationary all of the QE has been so far.

Tue, 06/14/2011 - 00:47 | 1366924 i-dog
i-dog's picture

I believe (gut feeling) that they are strangling liquidity and reducing the money supply to the productive economy -- just as they did to cause the Great Depression -- but, to be honest, I don't have a fucking clue what all those technical terms, virtual money-printings and convoluted transfers between entities (Fed, PDs, CBs, IBs, etc) mean to be able to confirm my belief. I just rely on Tyler and the commenters to [occasionally] make sense of it for me.

Tue, 06/14/2011 - 00:53 | 1366930 OldPhart
OldPhart's picture

I'm sorta dense too.  I would expect the printing to be inflationary also.  If banks are pushing paper to foreign banks, that puts the inflation temporarily at arms length.  The flood of dollars isn't here where we would see the water rising.

However it would still have an effect, I believe, on everywhere else as the prices worldwide jumped...similar to what we saw earlier in the year with commodities.  That spike would create rising prices here, not falling, right?

So are we to have price inflation with monetary deflation until the foreign banks send the cash back to purchase assets?

This is confusing as hell.

Tue, 06/14/2011 - 01:03 | 1366945 blindman
blindman's picture

the fed makes base money. not the multiplier.
the economy is supposed to created the bulk of the
credit money thru loans. it refuses as there are no incomes
to justify prices and entrepreneurial expectation. and there are
tonnes of legacy costs and transitional demolitions that
are staring us in the face. and taxes and misallocations
to satisfy the ignorati bent on ongoing stupidity, destruction,
miseducation and random acts of violence via war.

Tue, 06/14/2011 - 05:08 | 1367129 falak pema
falak pema's picture

By making this base money the FED, lead financial instrument of world oligarchy play, encourages the multiplier and, more importantly, allows the PDs to direct it where they want it to go; for their own good (this term is a misnomer as its for decreasing their big, mega infested, ever simmering, putrefying mountain of toxic bad).

Meanwhile, we all bean count the disaster from outside ...with a time and knowledge lag that ZH tries to fill in remarkably... the hidden, festering shadow banking/obsessively mad derivatives playing shell called (WS + surrogate dark pools +subservient bourses around the world), hooked on USD/Euro/Yen fiats pumped with steroids.

Horror movie that even the most zany of Hollywood moguls would not have imagined in its wildest dreams (WS- Gordon Gekko is chicken shit in comparison) and would now love to produce for sure if he is still solvent after the collapse. I bet we can count on that, but here in ZH we're getting a preview of the film in near real time that main street will be seeing in two years time...

Conversely, I'm sure BB and his oligarchic elite have probably convinced themselves, in their head-in-ass or 'dugout in the bunker' approach, that they are doing "God's work" defending "western values" like Leonidas at Thermopylae. Alone, against all comers from the invading barbaric eastern horde who are waiting in the aisles of history in the making to take over the whole shooting match. 

Tue, 06/14/2011 - 06:08 | 1367164 macholatte
macholatte's picture

Oh bartender!

I'll have one of whatever he's drinking. Uh, make that a double.

Tue, 06/14/2011 - 07:56 | 1367239 falak pema
falak pema's picture

its called oligarchical vodka on the rocks...enjoy...before the caviar bar closes...If you knew how to sing in russian you would sing the soviet national anthem while breaking your glass over your shoulder...tovaaaarich!

Tue, 06/14/2011 - 04:46 | 1367122 ZackLo
ZackLo's picture

to sum it up fed prints dollars foreigners buy dollars and then the inflation comes through other countries printing They're local currencies to countereffect those dollars and the inflation comes through those said countries buying hard goods in their local currencies equating to rising prices here because it created a higher deman for those goods and we import 50-60% of goods from other countries and the shitstorm doesn't really start till all of those foreigners all try and get all their money at once creating a run on all of the liabilites accrued through fractional lendig drawing down the money supply? correct me if I'm wrong murray N rothbard pretty much sums up the evolution of fractal lending in this lecture...from wild cat banks in the 1800's to the great depression assets will never match liabilities and thats when the deflation comes in... It's only an hour and 30 minutes but definitly worth your time was a great economist and historian probably the greatest of the 20th century by far...



Tue, 06/14/2011 - 13:56 | 1368229 FreeNewEnergy
FreeNewEnergy's picture

Thanks for the link, ZackLo. Best hour and 38 minutes of listening in a long time. Rothbard had such an easy way of deciphering complex issues. Of course, completely a lost art in the hands of current economists and other worthless talking heads.

Highly recommended listening.

Tue, 06/14/2011 - 08:11 | 1367262 Reptil
Reptil's picture

The question can be answered, if you know the following:

Is there going to be a settlement for that debt? If so, who will be on the recieving end? What will be exchanged to settle?

Mon, 06/13/2011 - 23:42 | 1366836 holdbuysell
holdbuysell's picture

If oil goes to $200 in this otherwise deflationary environment, does that spur printing?

Mon, 06/13/2011 - 23:49 | 1366850 Alcoholic Nativ...
Alcoholic Native American's picture

It sure as hell doesn't spur growth.  But in the new normal DOW 30,000 is right around the corner, like the end to the wars.

Mon, 06/13/2011 - 23:43 | 1366848 blindman
blindman's picture

witness the end of exponential growth as a
distorted virtual image in a cracked mirror.
ie..money. stay calm, many minds will be blown
all around. someone needs to relax just to so
we all don't stop breathing at once.
" it's only money ", remember when people
used to actually believe that?

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