Guest Post: Fact, Fiction And Finally The Fix

Tyler Durden's picture

Submitted by Davos Sherman Okst

Fact, Fiction And Finally The Fix

Fiction: In this 60 Minutes clip Bernanke tells Scott Pelley, “The other concern I should mention is that inflation is very, very low…”

Fact: There is massive inflation!


the real cost of living

Fiction: ‘Unemployment is 9.8%, if we didn’t take these drastic measures it would be 25% like it was during the Great Depression.’

Fact: Unemployment is, once again at “depressionary” levels - pushing 25%.


unemployment rate

Fiction: In this video
Bernanke says about the biggest bubble in the world (the housing
bubble) which he never saw and still denies: “I guess I don’t buy your
premise it’s a pretty unlikely possibility we’ve never had a decline in
house prices on a nationwide basis.”

“…never had a decline in house prices on a nationwide basis.”

Fact: Housing prices have declined on a nationwide basis.

a history of home values

The Bernanke fiction that he is 100 percent certain he can stop
hyperinflation was as reassuring as hearing his continued commitment to
continue Quantitative Easing.

I know hyperinflation is ugly. I
know stopping this train wreck years ago would have been the correct
thing to do. The fact is – we are beyond any fix. Things like cutting
government spending will only increase unemployment. We are bankrupt
when: What we take in with taxes doesn’t pay the bills. When we borrow
and that and the taxes still don’t pay the bills. Now we counterfeit so
we don’t default.

Game over!

I know re-valuing the dollar
would have been faster and less painful. But the facts are that we have a
professor who studied the Great Depression and if he doesn’t know that
housing prices declined, or that there is massive inflation now, or that
unemployment is at “depressionary” levels - then we have to realize
that correcting what he messed up isn’t going to happen.

The guy is either working for an elite few – or, more likely – he’s an economic imbecile.

the case is – I’m happy. The only way the economy is going to get fixed
is if consumers (who make up 67% of GDP) consume. Right
now consumers are either maxed out, working part time hours in their
full time positions, or they are unemployed. Consumers have shed 600
billion in debt, 20 billion was of that was willingly. On a governmental
level: Our debt – on and off balance sheet will choke the life out of
any prosperity.

The clock MUST be reset. That is the ONLY fix.

The Bernanke just pulled the reset lever.

Gold and silver are still affordable. If you missed my read “Nobel Award in Darwin Economics” this chart should explain a lot.


like a thief in the night

you think there will be deflation I’d encourage you to look at money as
seashells and look at The Bernanke as the gold miners on pages 96 &
97 of “Mean Markets and Lizard Brains” book. Basically it explains that
the habitants of the highlands of Papa New Guinea used seashells as a currency.
Gold miners from Australia wanted to hire them to mine gold, the
highlanders didn’t want paper money - they wanted shells. Plane loads of
shells were flown in. Supply increased, their purchasing power
crumbled, they experienced hyperinflation.

Our dollar will be
re-valued vis-à-vis unstoppable hyperinflation. Old debt will be washed
away. Consumers will once again be able to consume.

In Summary: My faith in the 5Gs: (G*(religious edit)d, Gold, Guns, Grub & The Government Will Continue to Screw It Up) remains strong.

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Mad Mad Woman's picture

I'm going with the economic imbecile.  He's got to stop with this QE bullshit. He's making it worse with each QE.  !?#$%@*&?!

Billy Shears's picture

But what he is doing seems so obviously wrong, is their (cue the conspiratorial sound) some kind of hidden, nefarious agenda.

Anonymouse's picture

No, no, no. All is well (


It's different this time.  Before Bernanke was only confident.  Now, he's 100% certain.  How can you argue with that?

Bananamerican's picture

yes! How can you doubt the Shining Path of Chairman Bernanke?

Has he not routed the forces of Depression and Decay?

With the glorious leadership of the Great Helmsman in the vanguard can there be any doubt of his resolute victory over the hegemonist Assange and his running dogs at ZeroHedge????

akak's picture

Welcome to the revolutionary vanguard, comrade!

Indeed, all good citizens eagerly await the cultural revolution of blind devotion to our glorious unelected Chairman, and the imminent "Great Leap Forward" to a world based strictly on paper promises and a reality based only on the pronouncements of our noble and omnipotent leaders.  Let one thousand paper flowers bloom!

Plus, our glorious Chairman's "Little Red Book" is SO much better than that other guy's!  His only had a red cover, but our glorious Chairman's is written ALL in red ink!

Robert - Bitch Tits - Paulson's picture

And yet, in Benron's world '08 was a black swan. Makes you wonder what black swan he won't see coming next.

RockyRacoon's picture

The drapes were closed on the windows of his Ivory Tower. 

Poor fool.

He's too immersed in the Ponzi to know that he's in the Ponzi.

He's the fool that doesn't know he's too stupid to be doing what he does.

He's the frog turning up the heat on his own pot.

MrPalladium's picture

"I'm going with the economic imbecile. "

I go with puppet of a small elite. Nobody with his training can be that stupid about the economy. However I do find his complacency about torches and pitchforks remarkable.

cosmictrainwreck's picture

right - the "elite" being the brain-surgeons inside Beltway & Manhattan; some of the Beltways are actualy deluded enought o think they can get a grip on this this and "save" the country, while the Skyscrapers are simply stealing everybody else blind. But they need each other, and the real Power is in the money-centers. Poor slobs like the bernank just do what they're told. So what if he blows a gasket due to inner conflict? Find somebody else.

Mad Mad Woman's picture

"Nobody with his training can be that stupid about the economy."

So that excuses him from being stupid from time to time? All his training is failing him right now. Nobody knows what to do at this point. Bernank, with all his training, is in a spot that never came up in the textbooks, the lectures, the computer models. He does know that QE is not working, and in continuing to print ever more money and releasing it to the banks, in that regard he is working for an elite few who want all the money. 

RockyRacoon's picture

Once we accept the fact that all the flurry of activity has but one purpose, the "recapitalizing" of the banking cartel, then all becomes clear.  There is no goal of amelioration of employment, inflation, "prices", or anything else.   The focus is on filling the black hole of bank reserves/balances.  Period.  All else is theater.

AmericaRacket's picture

The guy is either an economic imbecile – or, more likely – he is working for an elite few


Henry Chinaski's picture

I'm going with the economic imbecile. 

After seeing that 60 minutes gig, I am going with useful idiot.

The End's picture

not even gold, silver or copper can help here, the monetary system as we know it is over ... it was a fun ride popping bottles on the G6.

Cursive's picture

Fiction:  The Ben Bernank told Congress he would not monetize our debt.

Fact:  The Ben Bernank has a $600B Kill the Dollar Bill prgram, in addtion to the other trillions he has spent to support the banks.


Cursive's picture

Looking forward to that as well as the reading out of Europe tomorrow on the bank run.  Would be awesome if they set up a public shooting range on the Mall as a living, breathing and "smoking" tribute to the Second Amendment.  Bet they could raise some pretty good federal fees, too.

Hook Line and Sphincter's picture

It smells of a planned cyclical rebirth. A pre-planned Fed's death with a mock funeral dirge.

Sean7k's picture

Hyperinflation will not pay our debts. The bankers won't take pennies on the dollar. Ain't happenin'. 

It is easier to revalue the dollar or deflate. No one is going to free the debt slaves. 

And no, Bernanke is not an imbecile, he is working for an elite few.

goldfish1's picture

No one is going to free the debt slaves. 

Luckily for me, it's an unwanted consequence of the plan to take over the world.

Bring the Gold's picture

+1 hyperinflationary jubilee.

Unbeliever's picture

If you plot log(price_of_gold) versus time, 2001 - present, it's a straight f-ing line. Since when do markets move in straight lines?

Looks like a controlled demolition to me.

hack3434's picture

Debt and Consumerism have a symbiotic relationship.   

Selah's picture


QE3, Bitches...


MarketTruth's picture

We're all living in America,
America is wunderbar.
We're all living in America,
Amerika, Amerika.
We're all living in America,
Coca-Cola, Wonderbra,
We're all living in America,
Amerika, Amerika.

This is not a love song,
this is not a love song.
I don't sing my mother tongue,
No, this is not a love song.

We're all living in America,
Amerika is wunderbar.
We're all living in America,
Amerika, Amerika.
We're all living in America,
Coca-Cola, sometimes WAR,
We're all living in America,
Amerika, Amerika.

monopoly's picture

The only way it will be reset is when the sheeples finally say enough. Gonna take a while, but it will happen.

Mr Vepr Vyatskie's picture

I bet we will soon see the Bernank have a Saakashvili tie eating moment.

trav7777's picture

we were screwed in the 1970s when we validated Hubbert's Peak forecast.

Once that happened, within a couple of years our economy was in collapse, our currency in collapse.  Raygun came in and made deals with the ME nations, including trading arms to Iran (that revolution came in handy for us to break a united ME front), and we made our economy into the world economy via petrodollar inflation.  Now, the world is at peak; we will repeat the 1970s experience.

Mr Lennon Hendrix's picture

The 70's ain't got nutin' on this one.  US peak production will pale in comparison to world peak production.  With no swing state to manipulate the price, it will be eryone for themselves.  Soon to be only two things people want....."Black and Yellow...."

"I hear dey scared of it but them pros ain't."

Wiz Khalifa - Black And Yellow

Cdad's picture

I say go ahead and bring on the reduced oil production.  Enough exporting weath to ME nations.  Instead, drive production in Bachen and other national sources known.  Bring it...for in the end I do not beleive a shortage of oil is really our problem.


Mr Lennon Hendrix's picture

An oil shortage could have been mitigated with 20 years of planning.  Instead, our Heads of State pretend they had no intel on the subject while they were presiding (Clinton blamed the CIA for not handing him documents on peak oil, claiming, like a child, no one told him so he was not responsible) or are oil tycoons themselves (Bush, Cheney, Bush). Obama had to have received the intel, but what did he do?  Spending on light/high speed rail?  Spending on solar technology?  No, he paved the roads.

But is it their fault?  No, it is everybody's.  So when it is impossible to get fruit in the winter in upstate New York, or when Chicago can no longer fuel their city, then we will see what the problems will be. 

DaveyJones's picture

and as things get worse, all we get is more lies and less rights. This will not end well.

Mr Lennon Hendrix's picture

A thief knows how to steal, what more is never certain.

DaveyJones's picture

a thief knows how to steal until steel knows the thief

wisefool's picture

Chicago and upstate new york will be fine (Great lakes). Bottled water sells at a higher price per gallon than gasoline. China and M.E. Oil producers will, and are paying for water.

But the entire southwest is screwed. 

Caviar Emptor's picture

Totally agree @Mr Lennon. I keep saying. No comparison with the 1970s. The economy was still growing. Middle class incomes hadn't been gutted yet. 

WaterWings's picture

Also, we had only just left the gold standard and our economic base was still located within our borders.

Caviar Emptor's picture

US oil production had only just peaked. European economies had only just returned to full capacity and were still repaying debts to the US. US produced 35% of goods produced in the world. Durable goods manufacturing employed peaked in the 70s and employed twice as many as now. 

samsara's picture

Perfect synopsis Trav.


trav7777's picture

biggest difference is there is no new ME to bail out the shortages here.

The USD debt pyramid was underpinned by domestic production ultimately before the 70s.  Now it is underpinned by world production.

essence's picture

I choose door #1 (i.e. that Bernanke is a soldier for the ultra wealthy elite;
owners of the U.S/Western Europe Big Banks ... the ones with enough clout
to buy governments).

Ben's a smart cookie and good (albeit.. misguided) soldier. Likely
he'll go down before he rats out his masters.

Crisismode's picture

The Bernank is a tool, nothing more, nothing less.


He will mouth the phrases he must until he is dead or removed.


Move along folks, nothing to see here.


GIANTKILR's picture

Look at the pretty bubbles, Mama!

Everyman's picture

FIX?  Shoot every acclaimed idiot on CNBC, everyone at the SEC, and everyone at the FED RES in the f-ing head.

We can "reset" but with the same lame asses in place, with no consequence of their actions nothing will be learned and nothing wil be changed... for the better.

These economic terrorists need to be escorted off the face of the plante.

penisouraus erecti's picture

I'm going with he is working for an elite few. Nobody can be this stupid.

The thieves take the loot!


lynnybee's picture

how about this one ............ I'M GOING WITH :   GET RID OF THE CREEP !

BobPaulson's picture

I think I have figured it out. Ben has stocked up on gold and is just trying to get us to the part in the article where "the uninsured are financially finished". Right now he's seeing how much he can make by sending in spray painted rocks in a new cash buyback thing he's set up with Cash4Gold