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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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Mon, 12/06/2010 - 22:45 | 784457 Mad Mad Woman
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.  !?#$%@*&?!

Mon, 12/06/2010 - 23:01 | 784488 Billy Shears
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.

Tue, 12/07/2010 - 02:24 | 784766 Anonymouse
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?

Tue, 12/07/2010 - 03:48 | 784827 Bananamerican
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????

Tue, 12/07/2010 - 13:47 | 786142 akak
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!

Tue, 12/07/2010 - 07:57 | 784937 Robert - Bitch ...
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.

Tue, 12/07/2010 - 11:06 | 785412 RockyRacoon
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.

Mon, 12/06/2010 - 23:07 | 784497 MrPalladium
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.

Tue, 12/07/2010 - 00:25 | 784643 cosmictrainwreck
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.

Tue, 12/07/2010 - 09:54 | 785145 Mad Mad Woman
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. 

Tue, 12/07/2010 - 11:09 | 785424 RockyRacoon
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.

Mon, 12/06/2010 - 23:27 | 784536 TheSettler
TheSettler's picture

Worse for who?

Tue, 12/07/2010 - 00:01 | 784600 AmericaRacket
AmericaRacket's picture

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


Tue, 12/07/2010 - 08:19 | 784955 Henry Chinaski
Henry Chinaski's picture

I'm going with the economic imbecile. 

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

Mon, 12/06/2010 - 22:49 | 784466 The End
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.

Mon, 12/06/2010 - 22:55 | 784476 Cursive
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.


Mon, 12/06/2010 - 23:58 | 784590 Drag Racer
Drag Racer's picture


this could be good...

Tue, 12/07/2010 - 01:31 | 784729 Cursive
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.

Tue, 12/07/2010 - 03:56 | 784835 Hook Line and S...
Hook Line and Sphincter's picture

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

Mon, 12/06/2010 - 22:57 | 784478 Sean7k
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.

Mon, 12/06/2010 - 23:14 | 784505 goldfish1
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.

Tue, 12/07/2010 - 00:37 | 784654 Bring the Gold
Bring the Gold's picture

+1 hyperinflationary jubilee.

Tue, 12/07/2010 - 01:02 | 784697 Unbeliever
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.

Mon, 12/06/2010 - 23:33 | 784549 hack3434
hack3434's picture

Debt and Consumerism have a symbiotic relationship.   

Mon, 12/06/2010 - 22:57 | 784479 Selah
Selah's picture


QE3, Bitches...


Mon, 12/06/2010 - 23:17 | 784508 string
string's picture

War! Bitchez.

Tue, 12/07/2010 - 01:15 | 784717 MarketTruth
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.

Tue, 12/07/2010 - 03:52 | 784829 Bananamerican
Bananamerican's picture


Mon, 12/06/2010 - 22:57 | 784480 monopoly
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.

Mon, 12/06/2010 - 22:58 | 784482 Mr Vepr Vyatskie
Mr Vepr Vyatskie's picture

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

Mon, 12/06/2010 - 23:00 | 784485 trav7777
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.

Mon, 12/06/2010 - 23:57 | 784580 Mr Lennon Hendrix
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

Tue, 12/07/2010 - 00:17 | 784626 Cdad
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.


Tue, 12/07/2010 - 00:28 | 784642 Mr Lennon Hendrix
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. 

Tue, 12/07/2010 - 00:35 | 784652 DaveyJones
DaveyJones's picture

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

Tue, 12/07/2010 - 00:39 | 784661 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

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

Tue, 12/07/2010 - 00:43 | 784666 DaveyJones
DaveyJones's picture

a thief knows how to steal until steel knows the thief

Tue, 12/07/2010 - 00:59 | 784696 wisefool
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. 

Tue, 12/07/2010 - 00:18 | 784628 Caviar Emptor
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. 

Tue, 12/07/2010 - 00:25 | 784645 WaterWings
WaterWings's picture

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

Tue, 12/07/2010 - 00:39 | 784659 Caviar Emptor
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. 

Mon, 12/06/2010 - 23:58 | 784592 samsara
samsara's picture

Perfect synopsis Trav.


Tue, 12/07/2010 - 01:09 | 784711 trav7777
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.

Mon, 12/06/2010 - 23:01 | 784486 essence
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.

Mon, 12/06/2010 - 23:04 | 784491 Crisismode
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.


Mon, 12/06/2010 - 23:08 | 784494 GIANTKILR
GIANTKILR's picture

Look at the pretty bubbles, Mama!

Mon, 12/06/2010 - 23:09 | 784499 Everyman
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.

Mon, 12/06/2010 - 23:11 | 784502 penisouraus erecti
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!


Mon, 12/06/2010 - 23:21 | 784519 lynnybee
lynnybee's picture

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

Mon, 12/06/2010 - 23:21 | 784520 BobPaulson
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

Mon, 12/06/2010 - 23:22 | 784528 BobPaulson
BobPaulson's picture

Tried to cut and paste this but couldn't from my phone:

Mon, 12/06/2010 - 23:22 | 784522 1fortheroad
1fortheroad's picture

I here tell that China gave in to the central bankers for a whopping 50% interest.

Maybe their are bigger fish to be had and it shearing time again for us sheepeople

here in the USC (US Corp)

 Thank the other person who posted this a few months ago, you know who you are.

For those who dont enjoy being half way shorn or sheared investigate


Mon, 12/06/2010 - 23:22 | 784525 buzzsaw99
buzzsaw99's picture

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


It's both.

Mon, 12/06/2010 - 23:48 | 784570 benb
benb's picture

I’d say an 8:1 ratio of the former to latter. First and foremost the Bernank is a highly trained front man, con man, liar, and puppet for the real powers. I think he is for the most part just an interface between us and the syndicate. The whole system is like that at the top. Same for Geithner, Obama, the Clintons, e.t.c.

Like I said, a highly trained puppet. At best a lieutenant (IMO)


Tue, 12/07/2010 - 00:37 | 784656 DaveyJones
DaveyJones's picture

well said

Mon, 12/06/2010 - 23:24 | 784531 SmittyinLA
SmittyinLA's picture

There's a 3rd possibility, he's working for the elites and he's also complete imbecile which isn't a philosophical stretch, just look at Prince Charles or even Gw for that matter, you don't get any more elite than that.

The elites that run the world are primarily people that inherited their wealth.  

Mon, 12/06/2010 - 23:24 | 784532 SmittyinLA
SmittyinLA's picture

There's a 3rd possibility, he's working for the elites and he's also complete imbecile which isn't a philosophical stretch, just look at Prince Charles or even Gw for that matter, you don't get any more elite than that.

The elites that run the world are primarily people that inherited their wealth.  

Mon, 12/06/2010 - 23:24 | 784534 SmittyinLA
SmittyinLA's picture

There's a 3rd possibility, he's working for the elites and he's also complete imbecile which isn't a philosophical stretch, just look at Prince Charles or even Gw for that matter, you don't get any more elite than that.

The elites that run the world are primarily people that inherited their wealth.  

Mon, 12/06/2010 - 23:28 | 784540 The End
The End's picture

I'll kill the Bernank just to make it onto the trending topics

Mon, 12/06/2010 - 23:30 | 784542 honestann
honestann's picture

It doesn't matter whether Bernanke is an imbicle or not.  The predators-that-be who hold his leash know exactly what they're doing.

Mon, 12/06/2010 - 23:32 | 784545 thermroc
thermroc's picture

He's waiting for us to catch up. While you can still spend dollars, we haven't caught up. Once we do, he'll devalue dollars against gold, and use the gold dollar exchange rate to manage new monetary policy, the way we used to use interest rates. 

Mon, 12/06/2010 - 23:38 | 784552 Bearster
Bearster's picture

If you believe in the theories of how "they" have deliberately dumbed down "our" education, then you'll appreciate the ultimate irony that they have trained us to think "inflation" is an increase in prices.  Check out this video:

Mon, 12/06/2010 - 23:46 | 784563 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
Debunking the US Government: Keynes' Last Friend

After an election where Tea Partiers were elected not because the Federal Income Tax is illegal  (which is the reason the party was originally started) but because deficits are too big (Jimi says, "No shit."), what does the Government do?  Extent unemployment and cut taxes.  Now it is not that I am against either, I am simply pointing out that, once again, the fascists running the US care not what mandates their electors demand, but only what they think is in the best interest of the "country".

Unfortunately, this country is run as a corporation, and it is in the interest of the Board Members to act accordingly.  The voting body lets the blood run from their sacrifices on the Hill, and into private coffers.  That means starting wars and not giving the soldiers proper medical care.  That means firing workers to maintain low cost levels.  That means having the taxpayers (who act as the consumer) pay for extra expenses.    Whatever it takes to maintain the corporate cash flow will be done. 

Yet like any corrupt and bankrupt company, there are signs emerging that the US has lost control.  Blackhawk Bernanke made that clear last night when he said he was "100%" sure his theories will work, and then reminded the audience that he could raise rates anytime he wanted.  Obviously it is idiotic to suggest that a plan is full proof, but more importantly, it is a flat out lie that he could raise interest rates at the drop of a hat.  The conditions have to be just right for that, and the main is a smaller deficit.  The reason is simple:  the interest on the debt must be cost effective.  If the rates were raised even marginally, the interest on the debt would be insurmountable, bankrupting the US instantly.

Nothing against Keynes but Bernanke is bullying his theories.  If Keynes had a last friend, that friend stole his cookies and ran away.  Spending now in theory may have worked if the US had saved, but save they had not.  Keynesianism should have been thrown out years ago.  Too bad now the Chairman of the Federal Reserve Bank has tied his hands behind his back while still talking the fight.  Dude is gonna get punched in da moaff.

Mon, 12/06/2010 - 23:48 | 784567 Paul Bogdanich
Paul Bogdanich's picture

Bernanke makes an easy target because he is the Kings finance minister but he is neither insane nor stupid just doing what all ministers have done when the syphlitic insane King got into trouble and that is keep the monarchy going until the guy dies, get replaced or whatever.  Our problem is that our political system is failing or failed.  All the finance minister is doing is delaying the inevitable as that is his job.   

Tue, 12/07/2010 - 12:49 | 785917 RockyRacoon
RockyRacoon's picture

The Bernank needs to go back to school:

Lessons for the Young Economist | Robert P. Murphy

Jeffrey Tucker interviews Bob Murphy, author of 'Lessons for the Young Economist'. Recorded at the Ludwig von Mises Institute in Auburn, Alabama, on 19 November 2010.

Mon, 12/06/2010 - 23:48 | 784571 DavidPierre
DavidPierre's picture

The Ben Bernanke says that buying $600 Billion worth of Treasury bonds is not "printing money"!

This is a complete and utter lie except for the fact that they are not "printing" the money to pay for the bonds because it would cost too much in cotton, ink and printing costs. No, they are doing the "printing" electronically which costs them nothing.

He lied on national TV because in March 2009 he admitted it WAS "printing". So which is it?

Did you make a mistake last March or are you lying now?

He should never have opened his mouth or appeared on TV, maybe Joe Blow American believed him because he has been brainwashed for nearly 50 years; but do you think the Chinese, Brazilians, Europeans et al were fooled?

Not a chance! Not only "not a chance", THIS will be seen as just another INSULT to the intelligence of an already angry "rest of the world"!

So The Fed does QE2 because the unemployment rate is too high and inflation is too low: THIS is a direct insult to Joe Blow's mentality.

Who, hasn't gone to the grocery store, paid taxes or insurance premiums, gone to the doctor, bought new tires or WHATEVER and doesn't know that inflation is heating up bigtime? This lie is just TOO obvious.

Here is a cynical thought for you, remember the unemployment #'s Friday? ADP actually had better numbers for the month, is it possible that instead of misreporting (read LYING) to the upside they actually reported numbers (lied) that were actually worse than reality? ...And why you ask? ...To make the cover story for QE 2 more believable???

Nothing should surprise anyone anymore and it is probably more than just a small possibility!

What is really going on behind the scenes is that derivatives of ALL sorts are (and have been for more than 3 years) BLOWING UP in the banksters faces leaving smoking black holes of balance sheet losses, destruction and insolvency to those who "papered over" past losses. It is now all about "double down, double down, double down"!

The only way this can be done is by flooding the banks with more new "cash" and the it also keeps the Treasury market with a bid. Foreigners know this and have abandoned the auctions and are "hitting the Fed's bid" which is why interest rates are now rising in the U.S..

Oh yes, just one other thing. Bernanke says he didn't see this financial crisis coming?

No one in the government, Treasury, Fed, etc. saw it? COME ON!

More than 100 people who saw this thing coming, they wrote about it, acted on it and pleaded with friends and family to protect themselves!

What is happening now was so predictable that even idiots with tin foil hats (which now cost much more because there is no inflation) have been screaming bloody murder for nearly 10 years! Bottom line ... all the lies are coming home to roost and they can only concoct new lies that no longer even make common sense to drunken hobos to try to make cover.

By the way, THE most inflation sensitive sector in the world, the junior miners and explorers have had many issues exploding left and right over the last 2 weeks like popcorn kernels.

There were, just last week, upside moves 25% or more in just one day! Those "evil naked shorts" who made life so difficult for so long are now finally getting their just deserts and getting destroyed. I have slowly moved my personal portfolio "down the totem pole" over the years to where I am now basically 100% (other than vaulted metal) invested in juniors and explorers close to production.

THIS is one frying pan where the more they turn up the heat, the more enjoyable it will become...until they lose the system ENTIRELY! Who would ever have believed that some little "goat headed companies" in the middle of "western nowhere" would become important pillars to the next banking system?

You better believe it now because this is exactly what is happening!

via leMet

Mon, 12/06/2010 - 23:51 | 784575 CrashisOptimistic
CrashisOptimistic's picture

I don't have anything new to say in response to this.

The numbers on the inflation chart above failed to include housing and cars.  They are the bulk of a consumer's budget.  If they are in freefall, they drag everything else down.

You guys already know this.

Bernanke is a very smart guy.  There is no but to follow that.  He's a smart guy and he has good intentions. There is no conspiracy to do anything but the dual mandate that defines his responsibility.  If you want to remove the dual mandate, have at it.  Good luck getting it passed, but until it is undone, that's what he is trying to do.

He'll fail.  He may even know he'll fail, but he took the job and will do all he can to succeed.  It's new territory.  He's feeling his way through it and is doing the best he can.

It won't be good enough.  Oil production insufficiency guarantees devastation and he probably knows it.  He can only do what he can.  I say he probably knows it because he said an intriguing thing about why he is long term optimistic for America.

"We have a rich history of innovation."  aka miracle.  I suspect he's been briefed and knows a miracle is what it will take to deal with no oil.

Mon, 12/06/2010 - 23:56 | 784586 TheGoodDoctor
TheGoodDoctor's picture

You forgot healthcare.

Tue, 12/07/2010 - 13:07 | 785965 RockyRacoon
RockyRacoon's picture

Are you saying that he is a captain willing to go down with his "ship"?

That may be admirable, but he has also punctured holes in the hulls of all the lifeboats, loaded up the buffet tables and declared free booze for first class passengers, and shackled all the folks in steerage to the bulkheads.

He is standing in the wheelhouse giving interviews to the media about how sound the sinking ship is.  Does he know better?  It doesn't really matter when the outcome is the entire voyage ending up at the bottom of the Sea of Debt.

Now, how admirable is that?

I jumped ship and swam for shore about 10 years ago.  It was tough hauling all that precious metal and treading water, but I'm panting on the shore.  Tired but not totally spent.

Tue, 12/07/2010 - 00:13 | 784620 JohnKing
JohnKing's picture

Things like cutting government spending will only increase unemployment


Nah, less goverment equals more freedom, a better environment for economic growth. If we junked 3/4 of the bureaucracy we would be much better off.

Tue, 12/07/2010 - 00:24 | 784638 Caviar Emptor
Caviar Emptor's picture

To me: The Bernank's 60-Minutes grovel is a sign that he's starting to feel he's losing control of the situation. He may be in denial about it, but it had all of the hallmarks: an apologetic even defensive stance, a "don't blame me" undercurrent, lots of fake macho: 'read my lips: we aren't printing money!!!!' 


There are growing signs of loss of faith in currencies around the world, and the dollar as well. So the hyperinflation threshold is now lower. Everyone with a 10th grade education knows that gold and precious metals is the place to be. 

Tue, 12/07/2010 - 00:25 | 784644 steve from virginia
steve from virginia's picture

No inflation, sorry. Inflation is increase in money supply. Who do you know has any money?

Everyone is broke, 20 million are out of work. House prices are down by a third, rents are down, peoples' wages are stalled or cut, or hours are cut. Where is the money?

Oil prices govern the amount of money in circulation. Lotsa extra money and oil prices go up ... to the point where the economy crashes. When that happens demand for oil crashes and the price drops. This cycle sets the oil value of dollars (and other currencies). Dollars matter because they are widely available everywhere on Planet Earth.

The bottom line is the country's oil dependence sets an upper limit on oil prices and puts a floor under dollar value. If Bernanke could somehow 'destroy' the value of the dollar the US would cease to be an industrial nation really fast.

The dollar is the only thing the US has to sell the rest of the world right now. It's what Bernanke sells and he is a good pitchman. He's sold you on inflation which is what he wants. He sells dollars to financiers: they want the dollars so there must be something to them. If the smart money crowd wants dollars they are good enough for me!

The inflationists must think in terms outside of F/X and gold/silver. Gold can increase in price to $5000 an oz and the economy will be unaffected. Oil @ $100 a barrel and the wheels will literally come off.

Tue, 12/07/2010 - 03:06 | 784794 dhengineer
dhengineer's picture

Uh, no, the economy is not based on what you and I and our collegues on Main Street have in our pockets.  The wheels have already come off the economy.  It is based on what our benevelent friends at the Fed decide to print... er... sorry, create into existence.  The banks and virtually every other country have gotten tons of cash that was plowed back into the Treasury market, the stock market, the Fed itself, and the Forex market.  Benny and the Inkjets are selling dollars hand over fist (true), but at some point, there will be so many dollars out there that, like stones on a beach or blades of grass, they will have absolutely no value.  That's where the fun begins.  The world's financiers are all schooled in the work of Keynes, and they think that paper always has value as money.  They are the ones being set up for a massive crash.  Those of us on Main Street can barter, and trade gold and silver in black markets, and essentially work for food and shelter.  The elites, however, will lose everything.

We are headed into a hyperinflationary depression (too many worthless dollars, zero economic activity).  Oil and all other commodities will be priced terms of either gold or silver, or in barrels of oil for agricultural commodities.  Dollars, bonds, and all forms of dollar-based paper will line the walls of toilet rooms the world over, pasted up next to Weimer marks and Zimbabwe dollars.

Tue, 12/07/2010 - 03:44 | 784823 Rogue Economist
Rogue Economist's picture

Agreed.  Until the end consumer has access to the Money Spigot, you'll just get a repetetive pattern of price spikes and crashes, aong with margin compression forcing many producers out of biz.

Besides that, Hyperinflation is a comparative effect between major traded currencies and smaller ones.  What you have here is all the major currencies trying to "print" their way out of problems at the same time, so really the question for hyperinflation is in which currency is faith lost FIRST?  The Euro or the Yen look most likely to suffer such a crisis, and the vast flight into dollars when that happens will keep the dollar supported for a while longer.

Gold is likely to go into complete backwardation and be unavailable to buy at any price.  It simply won't move around the market.  The Dollar will hold value for so long as the FSofA Military can put enough pressure on Oil Producing nations to keep oil flowing toward FSofA refineries.  Once that fails, then you get your dollar hyperinflation but not before a few other currencies go under the bus here.

End result is likely some sort of Food for Oil Barter, with some currency defined for that trade.  Metals may be in the basket, but with decreasing energy available to make anything useful from those metals, they are likely to lose value as well.  Gold will not move again until something is sorted out int he general currency regime, because nobody will trade gold in any quantity for suspect paper currency, and moving it directly to buy Oil is quite pointless, it will all end up in the basement safe of Oil Producers that way.


Tue, 12/07/2010 - 00:30 | 784649 essence
essence's picture

I don't think you all give Ben enough credit.

Really, harmful to the masses as his actions have been, this has been a
masterful performance, an amazing choreography of QE,
Plunge Protection Team antics and so forth.  Quite artistic.

But it does seem to be drawing to a close.
Perhaps Ben is wearing out his credibility, in which case, making a
wild guess here, the next Fed chairman (if it even exists in the future)
... will be (oh..and I'm really going out on a limb here) ...of
-- jewish extraction. Ya think?

Scarcasm off ... but when you see all the jewish types in pinnacle roles
of finance, doesn't that speak volumes about who it is behind the scenes
that selects the candidate that get to be nominated & ratifed  by their puppets
in Congress & the white house.

And this has nothing to do with religious persecution, racism and all that.
It merely stems from basic observation. But come on folks, Greenspan,
Bernanke, Geithner ...does anyone detect a pattern here?

Come now, anyone wish to bet a 100 dollars about somepart of the
background of who the owners of the fed are? Certainly this narrows our
search for who these folks are. They give themselves away.
It's just that the main stream media will never metion mention it.
And it someone in it does, in a moment of career frustation, their ass is
quickly canned by the upper echelons and they are blacklisted.

Again, make no mistake as to what I'm inferring here ...people don't rise
to upper positions in government based solely on ability alone, much of it has
to do with being from the 'right cut of cloth' and who you know.

The choices of the financial elite in the U.S. absolutely shouts out as
to their composition.

The movers and shakers (with beaucoup $$$)  seem to prefer their like
in positions that handle money. Kinda like the mafia having a predisposition
to choosing Italian.

Don't know what came over me tonight.

Perhaps I am just tired of all the hypocrisy and bullshit and lying that
goes on in the US.  All the media BS. All the prez press secretaries
getting up and lying for the team (until they burn out and quit).
All the rigged stats, estimates and other bullshit by the entrenched
government departments intent on keeping their funding.

Ben Bernanke is so obviously lying thru his teeth now.
The Powers-that-Be seem desperate enough to resort to
invoking the techniques of Joseph Goebbels. They apparently don't even
care anymore if the audience sees the strings between them and their puppets.

It must be late in the game.



Tue, 12/07/2010 - 10:31 | 785282 Vaccaro
Vaccaro's picture


I'll agree.

Consider the parallels between dynamics in

Palestine - economy destroyed, society fragmented,

food shortages, homes and property seized, etc,

etc - and what is happening in the US - economy colapsing,

society fragmenting, food shortages looming, homes and

property being seized, etc, etc.  Looks like the Gaza-ization

of the US.

It used to be a joke that the solution to the ME problem was

to move all the jews to Florida.  Doesn't seem so farfetched now. 

Maybe the US is the takeover target.



Tue, 12/07/2010 - 00:44 | 784669 Caviar Emptor
Caviar Emptor's picture

Oooops....I'm considering a career in the cash-burning business

Tue, 12/07/2010 - 00:48 | 784679 Cursive
Cursive's picture

More lulz:

The flawed bills, which cost around $120 million to print, will have to be burned.

The new bills are the first to include Treasury Secretary Tim Geithner's signature. 

Tue, 12/07/2010 - 03:45 | 784824 akak
akak's picture

The flawed bills, which cost around $120 million to print, will have to be burned.

The new bills are the first to include Treasury Secretary Tim Geithner's signature. 

I wonder if Timmay signed them in crayon?  Is that the reason why they are no good?

Tue, 12/07/2010 - 00:45 | 784670 Caviar Emptor
Caviar Emptor's picture


Tue, 12/07/2010 - 00:42 | 784664 Caviar Emptor
Caviar Emptor's picture

If the credibility of The Bernank fades, gold will hit $10,000. 

Tue, 12/07/2010 - 00:44 | 784672 RoRoTrader
RoRoTrader's picture

It is the art of practiced manipulation........until the sheeple turn off the CBS Scott Pelly's who are just cosmetic Mary Kay fronts with nice shoes, pretty posture, a $350 haircut reading a telepromter/script, pull the plug on TV/unsubscribe to the medium is the message, and get re-established with a sense of community nothin ain't really goin to change.

Different day, same bullshit from a political party with a different name than the last.

Get fucking real.

Hey, is it true there may be a revolt brewing in Ireland?



Tue, 12/07/2010 - 00:52 | 784686 sbenard
sbenard's picture

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

My vote is for the other one. He's working for the elite few! He's certainly not working for the rest of us!

But there is still another possibility: BOTH! Now that's a REALLy frightening prospect!

Tue, 12/07/2010 - 01:03 | 784702 Rick Masters
Rick Masters's picture

Most of the justifcations from that chart from casey research, whoever the fuck that is, other than some poster here, are for rises in prices in agricultule commodities most of which were subject to enviromental disater like in Russia with wheat, but even so 74 percent isnt massive, end of the world stuff. This is article is junk. People here like to talk of sheep yet you are parrot the same points over and over. Yes I get it. You don't like him. But to say you're smarter then him and he;s some 64 IQ level jerk is just, well, a turn off. I t makes it political and distorts reality. But most of the post from anything casey research related is straight up junk. But, whatever.

Tue, 12/07/2010 - 01:24 | 784720 ViewfromUnderth...
ViewfromUndertheBridge's picture

Rick, if you don't know Casey Research, and you are not prepared to Google them, you are on thin ice criticising them.

Touching that you come to Ben's defence. No one here would mind him one bit except that as Chairman of The Federal Reserve he has been wrong so far with his every major utterance..."sub-prime contained" ring a bell. I think "100%" is that sort of doozy.

Now for him to say, if he had his time over, he wished that he could have seen the housing bubble coming...ummm, the comedian Jon Stewart saw it coming and did a segment on it in ...2005 I think...but not the Chairman of The Federal Reserve.

As for distorting reality, I really don't think it is the posters here.

Tue, 12/07/2010 - 01:27 | 784726 Cursive
Cursive's picture

I think Rick needs to drive over to FTW and give Timmay a hand doing his job.

Tue, 12/07/2010 - 01:24 | 784724 Cursive
Cursive's picture

Submitted by Davos Sherman Okst

But what the fuck do you care?  WTI crude in the high 80's and an economy so bad that the Republicrats/Demicans agreed to extension of EUC program for another 13 months AND 2-year extension of the Bush tax cuts AND cutting 2% of of the FICA taxes.  We are so lucky to have our banker overloads presiding over this glorious wonder of a centrally planned economy.   It's never been better to be an American, right?

Tue, 12/07/2010 - 01:10 | 784708 ViewfromUnderth...
ViewfromUndertheBridge's picture
"It ain't what you don't know that gets you into trouble. It's what you know (100%) for sure that just ain't so."
Mark Twain With a little help from The Ben Bernank. Just like all his other utterances, this one will haunt him.

Tue, 12/07/2010 - 01:11 | 784713 Madhouse
Madhouse's picture

What has happened over the past week has sealed the casket. A group of our best citizens led a panel to underscore the issues of unsustainability of the current red wall of debt. What happened ?  Kick it under the rug, give the insanely rich more money and go on a waning national show (that 20 years ago would have ripped him a new anus) and sound like a fuckin wimp. Good week for America ?  Great week. Fuck you Washington.

Tue, 12/07/2010 - 01:35 | 784733 jal
jal's picture


What Bernakie is doing with his QE2 is replacing the printing of credit with the printing of money. This thereby allows the Lenders/savers/investors to “cash out” from their positions in the excess credit market. That would be solving the liquidity problems for the 2%.


The other result is that the gov. is left holding the excess credit and hoping that in time the economy will grow so that there will not be a loss to the gov.


I have better dreams than that. :-)


Tue, 12/07/2010 - 01:36 | 784734 Oh regional Indian
Oh regional Indian's picture

To add to the mix, from Big BenBucks Bukkake, the horse himself... very interesting.

Note especially his little warning... can raise interest rates in 15 minutes if necessary....

The one way roller coaster ride is now officially underway...

That said, Mr. Bernanke vehemently defended his team’s recent policies by alluding to the dire scenario that would have resulted, had no stimulus measures been undertaken. He also threw a bucket of cold water in the direction of the Sarah Palin-flavored allegations that money is being “created out of thin air” and that the consequences of all of this accommodation imply inevitable hyperinflation.

“We’ve been very, very clear that we will not allow inflation to rise above 2 percent. We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. That time is not now.”

Mr. Bernanke also tried to convey to the “helicopter Ben” crowd that the Fed’s purchases of Treasury securities shouldn’t be equated with “naked” printing of endless supplies of dollars. “The amount of currency in circulation is not changing,” he said. “The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying Treasury securities.”

Enjoy the ride...


Tue, 12/07/2010 - 03:13 | 784798 GoinFawr
GoinFawr's picture

“…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”
- Ben Bernanke, November 21, 2002

Raise the overnight rate to 15%?! Dorothy, this is toto here; I'm flat out telling you we ain't in 1980 anymore, so if you'd please just hurry up and step into those silver pumps and get clickin' yesterday, we can get this all over with...


Tue, 12/07/2010 - 03:15 | 784802 Oh regional Indian
Oh regional Indian's picture

GF, not sure if you're being serious or sarcy, but improbable is not the same thing as impossible.


Tue, 12/07/2010 - 03:42 | 784815 GoinFawr
GoinFawr's picture


Sure ORI, but  however far from impossible it may be I'm still not leaving the porch light on all night on the off-chance that Scarlett Johannson will be popping in for a nightcap (though I admit I have hedged myself with a shower and shoulder shave, just in case).

Best Regards

Tue, 12/07/2010 - 03:48 | 784826 Oh regional Indian
Oh regional Indian's picture

By the way, you might have misread the original post. He said (and I said), raise it in 15 minutes, not to 15%.

Liking the odds a little better now? For the rate hike, not Scarlett.



Tue, 12/07/2010 - 04:27 | 784852 GoinFawr
GoinFawr's picture

Heh, I wrote 15% for the dramatic effect, though even +1.5% would absolutely crush, no? I emphatically repeat: 1980 this is not.

Well, Canada will play; for now

Any thoughts on who Mark Carney (still) work(s)ed for, for over 13 years?


Tue, 12/07/2010 - 05:43 | 784895 Oh regional Indian
Oh regional Indian's picture

“Anyone looking to fuel more demand and consumer confidence would hope that the Bank of Canada keeps interest rates low in sync with the stimulus extension timetables that were just announced” by Harper, Pratt said.

Sick. And I'll guess FRBNY or the Bronfman (sp!) family. ORI

Tue, 12/07/2010 - 15:20 | 784858 GoinFawr
GoinFawr's picture

Even the expurgated version will tell you pretty much all you know about Canada's MC:


Tue, 12/07/2010 - 04:28 | 784859 GoinFawr
GoinFawr's picture

trip. third time pays for all?

Tue, 12/07/2010 - 01:53 | 784742 GottaBKiddn
GottaBKiddn's picture

If choosing the "imbecillic" choice makes you feel better, so be it. However the man is simply lying in precisely the manner for which he was hired.

Tue, 12/07/2010 - 02:09 | 784750 Saxxon
Saxxon's picture

Fuck that, "He's just a guy, doing the best he can" bullshit.

One of the nice side effects to his work on the USD is inflating food prices for marginal nations.  Bernanke has blood on his hands.  Not to mention robbing Americans of their savings.

WTF do you think these people are.  I am within a hair's breadth of stating they are reptiles.  The inner circle of this circus are certainly sociopathic liars who instinctively and earnestly licked the hand of power from a very early age. 

From a perspective of real values, Bernank, Paulson, Geithner actually represent a very low element of Americana.

Tue, 12/07/2010 - 02:09 | 784754 Ham Wallet
Ham Wallet's picture

The answer is both. 

In that he is working for a small elite but he's too much of an imbecile to economically sheer the sheep, instead he slaughters it.

I'm long Gillette Mach 3 guilliotine blades.  

Tue, 12/07/2010 - 03:57 | 784838 I think I need ...
I think I need to buy a gun's picture

He knows exactly whats going the end municipal bonds will go bust , long term bond will lose all their value, and gold will go to 12-15000 an ounce. Something is going on with housing. John Paulson is on to something with his housing boom second half of 2011. Whether they bankrupt fannie freddie i don't know. Jim "I will be off tv soon" cramer mentioned we will have a housing shortage in 2012 tonight. How in the hell would that be possible if something big doesn't happen. Cramer has been calling a housing bottom for 4 years and has been wrong every step of the way but the comment was interesting. Free houses?

Bernankes interview was warm and fuzzy but he hasn't told the truth once in the last 5 years so you can't believe anything coming from these guys. I'm going with history and I'm not going to fight the fed. Buy gold and silver.

Tue, 12/07/2010 - 04:35 | 784866 akak
akak's picture

Cramer has been calling a housing bottom for 4 years and has been wrong every step of the way but the comment was interesting.

The only commonality between the various nouns in that sentence is the fact that the ADD-afflicted, meth-addicted syphilitic monkey known as Jim Cramer has had the Ben Bernank's inflated member willingly housed in his bottom for the last four years --- and it shows.

"Squeal like a pig, boy!  Squeal I say!"

Tue, 12/07/2010 - 04:11 | 784847 SparkySC
SparkySC's picture

Bernank the Fluffer. 


Tue, 12/07/2010 - 05:16 | 784880 Byte Me
Byte Me's picture

The guy is  working for an elite few – and – he’s an economic imbecile.

(Fixed that bit.)

Tue, 12/07/2010 - 05:19 | 784882 John Bull
John Bull's picture

(Ta) Bernak!

Tue, 12/07/2010 - 06:20 | 784904 NewThor
NewThor's picture

When real life is a comic book, Consult our Main man, Nostradamus!

WTF do you have to say for us today?


"""The copies of gold and silver inflated,

which after the theft were thrown into the lake,

at the discovery that all is exhausted and dissipated by the debt.

All scrips and bonds will be wiped out."""

 century: 8, quatrain: 28


Ooooh! That mofo is always right on time.

Magic & Physical Silver and Gold Bitchez!

Tue, 12/07/2010 - 08:29 | 784960 Übermensch
Übermensch's picture

America hyperinflates; USD  dodo bird; China, Russia pissed off; WWIII; Good times for all.

Tue, 12/07/2010 - 08:30 | 784961 tmftdoyle
tmftdoyle's picture

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


I have thought the same for a long time. The last few months have led me to conclude that both statements are true.

Tue, 12/07/2010 - 10:08 | 785193 RunningMan
RunningMan's picture

This is one dimensional thinking based on 'wealth effect'. people spend if they feel wealthy because of retirement savings in the equity markets. But Bernanke is killing fixed income retirees (on CD income and MM income) due to low rates. It is propping home sales and asset prices as a result, but look at the sale numbers - down and worsening. people are still all in cash, and increasingly commodities, which is why the latter are up 30-60% YoY. That IS inflation!!! Bernanke said he was 100% sure he could control the outcome. That was the statement that convinced me the ship is going down. He's an academic, and never left the ivory tower. But behavioral economics and psychology of the real world is so dramatically different than simply propping markets through Treasury and stock purchases. Bernanke and the Fed have created a lingering MALAISE over our economy and country's future that can only be described as a depression. Who feels like their prospects for the future are brighter? That there is more economic upside than downside? I don't, and I do well. Certainly not the 40MM on food stamps. Or the untold millions who got 99 weeks of unemployment that will be extended... (even though I am appalled at the creation of a massive entitled class among the un and under employed).


This country needs a vision, based on resources, self sustaining energy and technology. We need to withdraw from the rest of the world's troubles (and get away from oil dependency for crying out loud) and act like a responsible mature, nation, facing our troubles. Bernanke is like a bad parent, telling the unruly children they did nothing wrong and rewarding the bad behavior because they just want the crying to stop. We all know what that does - creates little monsters. The Bernanke interview made me more fearful than September 2008.  God help us all.

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