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Guest Post: Mr. Bernanke's Manipulation Nation

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Wed, 06/15/2011 - 09:55 | 1370727 Oh regional Indian
Oh regional Indian's picture

If you look at the seemingly hesitant performances of the FED's in front of most congressional or senate commitees, saying things like I can't remember where that 58 billion went, or nope, cannot confirm or deny gold in knox, or any other such blatant irregularities...


you realize that these guys are playing exactly to plan and book of some higher power or script. One big picture look and you can see the patterms unfold, long and short, TA style.

Like a tall ship, this game is rather exquisitely rigged.



Wed, 06/15/2011 - 10:22 | 1370841 risk-reward
risk-reward's picture

Like a tall ship, this game is rather exquisitely rigged.

Good stuff, ORI !!

Wed, 06/15/2011 - 12:05 | 1371288 Oh regional Indian
Oh regional Indian's picture

:-) Thanks RR.


Wed, 06/15/2011 - 09:55 | 1370728 trav7777
trav7777's picture

Gold, bitchez

Wed, 06/15/2011 - 10:46 | 1370942 Rusty Shorts
Wed, 06/15/2011 - 14:20 | 1371990 GoinFawr
GoinFawr's picture

Well, for Trav that depends entirely on the pigmentation of the demographic living near the nuclear plant.

Trav might say something like,
"If it's brown, flush it down. If it's yellow, please stay mellow."

Wed, 06/15/2011 - 11:51 | 1371220 DocinPA
DocinPA's picture

Might want to consider stockpiles of guns 'n' ammo, too.  As well as food.  And tools.  Well, you get the idea.

Wed, 06/15/2011 - 09:57 | 1370735 LawsofPhysics
LawsofPhysics's picture

Preaching to the choir on ZH. 


Tyler, where is your analysis of the Pandora IPO?  You just know we are all waiting.

Wed, 06/15/2011 - 14:10 | 1371916 Bananamerican
Bananamerican's picture

Harun just rocked my world....

good stuff

Wed, 06/15/2011 - 10:05 | 1370747 LaLiLuLeLo
LaLiLuLeLo's picture

Anyone see Cramer praising uncle ben yesterday? It was ammusing to say the least

Wed, 06/15/2011 - 10:19 | 1370774 hedgeless_horseman
hedgeless_horseman's picture

Cramer is in full co-operation mode. 



TheStreet.com "is cooperating fully with the investigation," CEO Daryl Otte told The Post.


Cramer, the host of "Mad Money" and a former hedge-fund manager, co-founded TheStreet.com in 1996. He remains a commentator on the site as well as chairman of the company's board.



Wed, 06/15/2011 - 10:29 | 1370859 LaLiLuLeLo
LaLiLuLeLo's picture

in full GS-goon mode. * I'm here. no, now I'm here... over here!!!*

notice how all the investigations started happening after chris cox left the building. he should be held accountable. even hbo's "TBTF" made him look stupid

Wed, 06/15/2011 - 10:05 | 1370750 Abitdodgie
Abitdodgie's picture

If the rat gets tired I will take over , you take one for the team and all that

Wed, 06/15/2011 - 10:08 | 1370762 hugovanderbubble
hugovanderbubble's picture

Pandora´s Thunder box¿?:)

Wed, 06/15/2011 - 10:11 | 1370766 HelluvaEngineer
HelluvaEngineer's picture

Wow.  If we fill the gap this morning wonder how fast we'll roll over.

Oh, and this is a relief:

Wed, 06/15/2011 - 10:10 | 1370768 YesWeKahn
YesWeKahn's picture

How many people have the IQ to understand all this? They only understand simple concepts such as interest rate, gas price, unemployment. This is exactly what Bernanke is expert at: he uses these simple concepts to manipulate the mind of the regular joes.

Wed, 06/15/2011 - 10:21 | 1370809 Nothing To See Here
Nothing To See Here's picture

It's not as much a question of IQ as it is a question of having corrupt systems of information and education.


"If all the sources of current information are effectively under one single control, it is no longer a question of merely persuading the people of this or that. The skilled propagandist then has power to mold their minds in any direction he chooses, and even the most intelligent and independent people cannot entirely escape that influence if they are long isolated from all other sources of information.”

- F.A. Hayek, The Road to Serfdom (Chapter XI - The End of Truth)

Wed, 06/15/2011 - 10:41 | 1370872 alien-IQ
alien-IQ's picture

the truth is that it's really not that difficult to understand. It's all common sense.

I've managed to explain such matters to people whom I was surprised to find understood it in the end. It's just a question of how you word something...what examples or metaphors you use. It's called "knowing your audience". When Charles writes these articles, he knows his audience therefore has no need to dumb it down. When we take this information and try to convey it to friends and family who may not be the sharpest knives in the drawer...we need to chose our words and metaphors more carefully. We need to know our audience. Even if it means we cannot show off all the financial lingo we have acquired over time.

Often, the failure is not that "they" did not understand it...it is that we failed to clearly communicate it. Don't blame them for not getting it...blame yourself for not getting it across and try harder. The sign of true intelligence is the ability to take a complex idea and simplify it so that a child can understand it.

Wed, 06/15/2011 - 11:10 | 1371054 MrPike
MrPike's picture

Well said.

Wed, 06/15/2011 - 11:32 | 1371158 i-dog
i-dog's picture


Wed, 06/15/2011 - 14:14 | 1371929 Bananamerican
Bananamerican's picture

"The sign of true intelligence is the ability to take a complex idea and simplify it so that a child can understand it."


and it's why effective teachers are so prized...'tis a rare gift

Wed, 06/15/2011 - 10:08 | 1370771 John Law Lives
John Law Lives's picture

<<<  Manipulation is the beating heart of Federal Reserve and Central State policies. The centrally planned economy has failed to respond as expected, and so the response is to put more cocaine-laced pellets in the feedbox and encourage the poor starved rat inside the cage to press the bar labeled "debt" to get another pellet of addiction and highly profitable enslavement. Welcome to Manipulation Nation, a.k.a. the unlimited debt experiment. Think rat cage, one bar to press, and unlimited cocaine-laced pellets.  >>>

One of the greatest article intros ever on this site (imo).  Classic!

Wed, 06/15/2011 - 10:13 | 1370776 Silverhog
Silverhog's picture

We just hit a soft patch of shit about 1500 miles wide.

Wed, 06/15/2011 - 10:40 | 1370913 Caviar Emptor
Caviar Emptor's picture

Soft patch of quicksand

Wed, 06/15/2011 - 10:13 | 1370777 Rusty Shorts
Rusty Shorts's picture

Oh Shit

Hey Tyler, O/T but looks like we may have our very own Fukushima.


Wed, 06/15/2011 - 10:26 | 1370844 hedgeless_horseman
hedgeless_horseman's picture

Pray that levy holds. 

At least parts of the Ogallala Aquifer are getting refilled. 

Wed, 06/15/2011 - 11:48 | 1371210 Silver Dreamer
Silver Dreamer's picture

Nuclear power is completely safe.  You must be a conspiracy theorist!  ;-)

Wed, 06/15/2011 - 10:13 | 1370787 Stares straight...
Stares straight ahead's picture

At what point is a nation defined as insolvent?  I have heard that if every asset in the US was sold, it would be worth about 55 trillion dollars.  Since our current liabilities are in excess of 63 trillion, aren't we officially insolvent?

Wed, 06/15/2011 - 10:22 | 1370816 Shell Game
Shell Game's picture

People will continue to be distracted and manipulated away from any healthy path forward as long as they keep seeking top-down solutions to this mess.


Wed, 06/15/2011 - 10:19 | 1370822 jackinrichmond
jackinrichmond's picture

great article !  

it's ironic that the fed's manipulation of the markets is not bringing buyers into the game - just the opposite, it is driving people away in disgust..  no one wants to play in a rigged market (unless you're an insider).  the bernank and his ilk think they are saving us, but in actuality by not letting the markets clear, they are making it much, much worse.

Wed, 06/15/2011 - 11:50 | 1371179 i-dog
i-dog's picture

"the bernank and his ilk think they are saving us"

No, they don't! Their agenda is not our agenda. You (and many others here) need to put your iCrap down and pay attention!

Wed, 06/15/2011 - 10:20 | 1370826 km4
km4's picture

The Ben Bernank is Rat Fink http://en.wikipedia.org/wiki/Rat_Fink

Wed, 06/15/2011 - 10:24 | 1370835 centerline
centerline's picture

But I thought deficits dont matter....  LOLOLOLOL.

Nice work again CHS, and same to Harun.  It is impossible to talk about the macroscopic/macroeconomic picture without talking about human nature, politics, governments, etc.  

Wed, 06/15/2011 - 10:39 | 1370908 Caviar Emptor
Caviar Emptor's picture

Right! Reagan proved it! (Dick Cheney, 2002)

Wed, 06/15/2011 - 10:27 | 1370868 apberusdisvet
apberusdisvet's picture

Interesting interview with the DOE head marxist, Dr. Chu on CNBC this am on the efforts of universities (publicly funded of course) to arrive at solutions for more technical breakthroughs on electric cars or something similar.  I wanted to yell at the screen.  "Hey asshole who is going to have the 40g's to pay for this new technology in any appreciable volume".  Certainly not the rapidly disappearing American middle class.

Wed, 06/15/2011 - 10:35 | 1370903 Caviar Emptor
Caviar Emptor's picture

Just to set it straight: Bernanke is not a straight up "Keynesian". He's a devout follower of Milton Friedman. He believes that monetary policy will prevail over all problems in the economy. The long line of Friedmanites going back to Greenspan and Volcker also backed Supply-Side economic politics, which in large part contributed to our current situation: they created a 3-decade long slide in real incomes, they encouraged outsourcing and offshoring, they instigated regressive tax policy (cuts for upper incomes, raises for middle) because they believed that wage inflation was the root cause of stagflation in the 1970s. We know what happens when you offshore America's industrial and manufacturing base. Notice that yesterday China's data showed manufacturing was expanding, whereas our Empire manufacturing survey showed contraction. We also know what happens when wages and incomes swoon for 30 years. They also began a massive increase in public and private debt levels. I know I'm going against the grain of Tyler's orthodoxy here, but there it is, someone had to speak out

Wed, 06/15/2011 - 10:47 | 1370960 centerline
centerline's picture

Interesting stuff to consider.  Thanks.  And...

Along the way, countries like Mexico and China were more than happy to pit the equivalent of slave labor and complete lack of enviromental controls against everyone else in order to pull that industrial capacity to thier side.  China's frantic pace of internal construction and development ahead of a population who can really afford it should be tell-tale of the bigger global plan they have had.  The big question is whether it will work out for them - or have they tragically miscalculated/underestimated.

Wed, 06/15/2011 - 11:48 | 1371221 baby_BLYTHE
baby_BLYTHE's picture

Milton Friedman and his Chicago school buddies were monetarists (perhaps more properly Neo-Monetarists).

Friedman is Bernanke's idol. Ben is a Monetarist with a Keynesian twist (in regards to his wanting the government to increase the debt ceiling and not make any significant cuts)

Wed, 06/15/2011 - 13:55 | 1371857 mayhem_korner
mayhem_korner's picture

Bernanke is nothing of a monetarist.  Monetarists, in the pure form, would never print money; they believe in regulating money supply via interest rates.  Bernanke's purpose with his helicopter is to monetize the fiscal policies - so what he's doing is more Keynesian than monetarist.

"Good" monetarism would maintain interest rates at some real level to keep money supply in check.  Greenspan and the Bernanke have done none of that - simply made it too easy to borrow.

Friedman abhorred the thought of money printing - he called it criminal.  He believed in indirect intervention via interest rates.

Monetarism has not been deployed in its pure form.

Wed, 06/15/2011 - 10:42 | 1370922 TexDenim
TexDenim's picture

The insane assumption Bernanke makes is that the only meaningful metric people use when deciding to take on debt is the interest rate. This is the classic "false precision" offered by apparently "precise" data: if other causal factors can't be quantified with sufficient precision, or quantified at all, then they're ignored by the model.

This is so true. The most devastating assumption economists make about the great herd-mass of humanity is that they are as socially crippled as economists, and that they substitute Mr.-Spock-like logic and analysis for the crippled emotions that fail them socially.

Wed, 06/15/2011 - 10:53 | 1370990 centerline
centerline's picture

Rational behaviour is contextual (and postional).  Debt saturation is clearly the prime example.  Reinforced now by the concept that added debt no longer adds to real GDP, but in fact may decrease real GDP.  THe realization that at some point the economic equation become worthless has to scare the pee out of people whose thinking is predominantly linear.  I am sure that Bernanke is smarter than this - but to think he can control the situation is beyond comical.

Wed, 06/15/2011 - 12:01 | 1371259 rlouis
rlouis's picture

Makes one wish Bernanke would jump out of his ivory tower and end his misery, might reduce ours as well.

Wed, 06/15/2011 - 10:43 | 1370926 I am Jobe
I am Jobe's picture

Infamous Quote from Mayer Amschel Rothschild

"Give me control of a nation's money
and I care not who makes the laws."

Wed, 06/15/2011 - 10:49 | 1370950 Madcow
Madcow's picture

rats + cocaine pellets ... 

yes, but only if the money supply (credit) can double again. if it can't then the system will collapse due to a plain and simple lack of new new money to feed all the previously issued bonds and rents and whatnot.  

you either have to give the debtors 2x the credit to continue to service their debts - or you allow deflation to take hold and recognize that the future is parabolic increases in default, foreclosure, bankruptcy, etc. etc. 

can't have it both ways :(


Wed, 06/15/2011 - 11:24 | 1371103 Sancho Ponzi
Sancho Ponzi's picture

Turbo Timmy could send everyone who filed a 2010 tax return with an AGI less than 100k a check for $20k. He could clear the checks without borrowing any money and without increasing debt by simply clearing the checks (or direct deposits). 

At first glance some may be inclined to believe the result would be rampant inflation as the money supply explodes by about $2 trillion. But I'd wager virtually all the money would go toward paying down debt with most of the rest going toward purchases of durable goods such as badly need vehicles, refrigerators, etc.

Paying down debt leaves the citizens with more purchasing power, more options to move to where the jobs are, etc. Paying down debt provides badly needed reserves to banks and financial institutions. Company and personal balance sheets would improve. When inflation does start to heat up Ben can begin raising interest rates. 


Wed, 06/15/2011 - 11:11 | 1371048 Hondo
Hondo's picture

The real question is should one have to out guess the FED to run a business, or lead a normal life.  Should we the citizens accept being jerked around like puppets on a string in order to accomodate the elite and banking sectors.  Shouldn't common sense rule decisions and shouldn't one be able to use their own (and suffer the consequences thereof) brains to make decisions instead of having to out guess people who are truly less eductated than they want you to believe??????

Wed, 06/15/2011 - 11:41 | 1371150 GoinFawr
GoinFawr's picture

USD up against its fiaty peers, Au up too; again.

"Divesting while the divestment is still good"™
"Divestment while the divesting is still good"©

What ever happened to the "USD down/Au up, Au down/USD up" crowd?

TELL is on like Don King's Bong.

Wed, 06/15/2011 - 11:49 | 1371213 baby_BLYTHE
baby_BLYTHE's picture

The FED was heavily critized after unleashing QE2.

Come QE3, I suggest the Printer consider a different form of transport


Wed, 06/15/2011 - 15:57 | 1372383 GoinFawr
GoinFawr's picture

I've got these slightly used teleport pods from the mid 80's he's welcome to. They still work just fine, honest.

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