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Guest Post: Your Pick, Ben, But One Goes Off The Cliff
Submitted by Charles Hugh Smith from Of Two Minds
Your Pick, Ben, But One Goes Off the Cliff
It's one or the other, Ben: you either push the real economy over the edge or you push stocks and the risk trade off the cliff.
Now that you've pushed the dollar down, Ben, it's your pick on what to push off the cliff: your beloved risk trade or the real economy. Here's a chart of the U.S. dollar and crude oil. Notice they're on a see-saw: when the dollar tanks, oil skyrockets. When the dollar recovers a bit, oil declines.
Ben Bernanke and the Fed are replaying their 2008 game plan: drive the dollar down to goose the risk trade in stocks. But a funny thing happened on the way to blowing another equity bubble: oil bubbled up, too, and that killed the real economy.
For the past three years, Ben has been trying to resuscitate the real economy via "the wealth effect": if your portfolio of stocks is rising, then you'll feel richer and your "animal spirits" of borrowing and spending will be aroused. The only proven way to goose stocks is to crush the dollar so overseas corporate earnings will be boosted by the currency depreciation (when transferred back into dollars, even flat profits look like they're rising), and U.S. exports will be cheaper to our trading partners.
Flooding the U.S. market with liquidity and keeping interest rates at zero had another consequence, one adamantly denied by the Ministry of Truth: it sparked a carry trade in which cheap dollars could be borrowed for next to nothing and exported around the world to seek higher returns.
Unsurprisingly, much of this free money flowed into commodities, which retained their value as the Fed pushed the dollar down. Also unsurprisingly, oil exporters raised the price of their oil in dollars as the dollar tanked.
Ben and his motley crew at the Fed reckoned that the financialized U.S. economy would respond positively to the lower dollar and the goosing of the risk trade in stocks. But the guys and gals seem to have forgotten that the real economy is dependent on oil. All the folks at the cocktail parties attended by Yellen et al. may be gushing over their hefty stock gains, but in the kitchen and carpark the workers are grousing about the rising prices of food and gasoline.
Now the cost of oil--the lifeblood of the real economy--is close to the point that it will push the real economy into recession. This sets up a difficult choice for Ben: if he pushes the dollar down to new lows, then oil leaps up and pushes the real economy off the cliff.
Alternatively, Ben renounces QE3 and "surprises" the markets with a rate increase, thus rescuing the dollar from freefall and pushing oil down. But that will send his precious risk trade and equity Bull off the cliff.
The politicos won't like either choice, but sacrificing the real economy will cost them their seat. All the fatcats who've raked in tens of billions from the risk trade Bull will be demanding that Ben "save" the financialized economy, but the politicos will see their political obituaries being written. Yes, the fatcats will shower them with millions in campaign contributions, but even those millions won't change the fact that Americans reliably vote their pocketbooks.
If rising oil pushes the real economy over the cliff, voters will not be re-electing incumbents in 2012.
Welcome to reality, Ben. Your "let's pretend the recovery is real" game is nearing an end. If you push the dollar down any more, then oil will go up and tip the real economy into a recession that QE3 will only make worse as you send the dollar into freefall. If the dollar rises, then your beloved "wealth effect" dies a horrible death on the rocks below.
Take your pick, but choose wisely.
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pesos are worth more than dollars americans last seen running across border to mexico!!!!
There was a point when wired money would flood into Mexico from Amerika from the migrant workers. I believe I read a piece where the money flow reversed somewhere around 2008-2009.
The econ conditions hurt the guys coming up from MX and Central America so fewer pesos flow South now. If there are Pesos coming up that would be narco/fatcat money.
Ben has an easy choice
save the upper 5%
save the lower 95%
??? do u need 3 guesses to which he will pick
If i may... the Bernak's choice is either save the banksters that OWN the private Federal Reserve central bank or screw the 95% poor sheeple. Ben works FOR the banks so his choice is easy.
In other words, "What has the lower 95% done for Ben lately?"
I think Ben's more concerned about all that rope in hardware stores right now, and not so much about his bosses. He must feel like Lee Harvey Osward when the cops entered the cinema.
L.H.Oswald was driking a cola and eating popcorn and didn't even have a hand gun on him, 15 min after he 'killed' J.F.K do you rly belive that ?
Oswald was seen by Dallas police officer Marion Baker in the second floor lunch room drinking a Coke, less than 2 minutes after he supposedly shot Kennedy from the sixth floor window on the opposite end of the building. His fingerprints were not on the murder weapon and a parrafin test revealed he had not shot a rifle that day, also according to Dallas police.
According to the 1994 confession of James Files, a former CIA agent and mafia hit man at the time, Oswald was duped into thinking they were in Dallas to protect the president. That is how they got him into position to take the fall.
SPLAT! KABOOM! -- "He chose poorly." - Old Knight in "Indiana Jones and the Last Crusade"
"Investors need to diversify, they need to own some real estate, they need to own some farmland, they need to own some equities, some cash, and some precious metals..." Marc Faber —Investment analyst
Got real estate and farmland outside your home country yet?
http://www.thorssoncapital.weebly.com
The Fed will be "restructured" before the 2012 election, imho.
Only if things reach some kind of plateau here. The last few months things really seem to have started to accelerate.
Ben has to find a way to stall, there are no good options for him in June.
i think we are experiencing what chris martenson has explained to the tee......exponential debt growth....
+1
Exactly. The need to issue debt-money is accelerating at a fantastic pace in order to keep up the charade.
The problem is there's no growth to support it.
+1
Exactly. The need to issue debt-money is accelerating at a fantastic pace in order to keep up the charade.
The problem is there's no growth to support it.
Restructuring would require congressional action and congress is as bought and paid for as the Fed is. This should be a good test of who really owns the Fed. No one but a few insiders really know what's going on and the rest of us try to devine the truth from the tea leaves we're shown. My bet is the Fed is mainly controlled by globalist powers so the US economy is of secondary concern. The dollar will continue it's dive, and commodities will continue their rise. But don't forget the third option common to governing by committee, a 'compromise' solution trying to satisfy both, but failing in all.
Honestly I don't think Obama can even talk (or read the teleprompter) intelligently about the issue. With all this shit going down, I've yet to hear him discuss any technical economic issues at all. Just absurd "war on speculators garbage." Even dumbass George Bush would discuss some stats once in awhile. Obama doesn't have the slightest clue.
I have to agree with you. I suspect Obama was a poor math student; they won't release his grades, which makes me all the more suspect. In any case, it seems economic issues are too complex for him, and he relies on the likes of tax cheats, liars, and greedy sociopaths for his guidance, and then serves up some perception management soundbites to the public.
+100 lies and counting. I likewise suspect the Great Agitator has ADD when it comes to numbers. I am familiar with the symptoms. Mrs. Rainman has suffered with it for decades.
I don't agree. I think he is following the script, and he is not supposed to talk about the numbers. He's not stupid - he's working for the same people George Bush worked for. No difference here at all.
+1 He went to Harvard and in Celente's parlance is one of the "White Shoe Boyz" ...he doesn't even care what the numbers are as long as he's in charge. The people who really undertand the numbers are blinded by Keynesian dogma and they keep feeding him the same dogma. Not stupid, just unable to think thoughts not already thought out by others. In other words, a lawyer.
Quite right and with no offense to those more mathematically inclined than others;
Why is it that most of the people who work in government in Washington hold either a law or economics degree? Couple this with an academic background and good governance stops working quickly.
It's possible that rising commodieties is Exactly what they want, after they bought out all the comoditie companies pennies on the dollar in the past decade, it's time to take the 'other' side of the trade
But don't forget the third option common to governing by committee, a 'compromise' solution trying to satisfy both, but failing in all.
This is more likely, the idea that they will attempt to mollify both perspectives. It will buy time as oil will decline somewhat and the market will "adjust", but it will not fix anything.
We can expect no real change until early 2013 when the next political structure takes over. The change we experience then is anyone's guess.
sschu
Right on the mark.Isn`t that what Tyler`s assertion was yesterday which was obfuscate and be vague on Tueday as to not disrupt the market place.If they want the Commander-in-Ept to get four more,then they have to placate the masses and lower food and oil until the votes are counted.
"This should be a good test of who really owns the Fed."
There is no mystery about who owns the Fed. The shareholders of the Fed are a select group of banks owned by a select group of families: the Morgans, Lehmans, Rockefellers, Bakers, Schiffs, Warburgs, etc. It's public information, it's just not public knowledge. So, the Federal Reserve Bank is a private bank owned by a select group of elite, wealthy (beyond our comprehension kind of wealth) families. Bernanke works for those guys. Is there any mystery why he's creating trillions of dollars to save the large financial institutions? And 95% of Americans have no idea. Finally, Glenn Beck is talking about this, so maybe it will become more mainstream knowledge. Not that I agree with a lot of things Beck says, his partisanship dilutes his message, I think, but he does have a decent-sized following, so maybe more and more people will be talking about it.
This is why Henry Ford said, "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."
Here's the org chart. It was published in 1976, but I kind of doubt anyone has sold their shares out of the family since then.
http://www.save-a-patriot.org/files/view/whofed.html
Word to ya mama and them.
We should "restructure" Benocide Bernokio and his asshole buddy Lord Bankfiend into a pair of matching nooses, and let them swing from lampposts.
keen thoughts...restructured, if not hopefully vanquished completely. Is there a way to impeach Bernutty through public vote?
www.forecastfortomorrow.com
Ben is between the proverbial megalith and a gigantic diamond.
I hope he chooses the one that turns him into a mummy and then the whole spontaeous combustion thing, all within like 2 minutes. That would be cool if someone filmed it.
I for one don't care anymore which way he goes, I just wish he would get it overwith. Either bring on the depression, or bring on the hyperinflation, and let's face the music already. This jedi master mindgame BS is a waste of my time. Delaying the pain will just make things worse in the end.
The Bernanke, please choose your weapon and let's get r dun.
It is all about delay for them tawdzilla. The longer they delay, 1. the longer banks continue to rebuild their balance sheets (s..l..o..w..l..y) with guaranteed profits from 0% Fed financing and 2. The U.S. Gov continues its "stealth" default to its creditors. Now my question is, when does the market force their hands? I believe their biggest weakness lies in their belief that the dollar and U.S. assets will continue to be "revered" around the world.
Chinese water torture, anyone?
drip... drip... drip...
These immoral goons don't have as much time as they think they have. Greece went from A grade to junk in less than 2 years.
The banks may be benefitting from these delay of game tactics, but my kids are not. The banks maybe have a 1% chance of successfully cleaning up their balance sheets, while my kids have a 100% chance of debt bondage.
Let's not forget that it's also about running out the statute of limitations on massive fraud. If those banksters and Timma and the Bernank extend and pretend long enough to avoid prosecution, we should be advised to go long lampposts and rope, preferably hemp rope.
You are in the middle of it right now. It takes a long time to destroy a great nation and see it fall. Like chopping down a giant redwood tree. The last chip is down and the tree is falling but has not hit the ground yet.
If you care to, you'll have to wait until after the election. Until then it will be talk oil down, talk about deficit reduction, and keep the real economy going as much as possible. After TOTUS (teleprompter of the US) gets his "4 more" anything can happen. But they will pull all stops to keep up the status quo until then.
Agreed. Also the US government operations have to be financed as long as possible to the tune of $1.5 trillion annual borrowings.
Must be said again (and 50 times a day.)
Bernanke's an idiot.
God, I wish I could play him in poker. Although I kind of am with the PM trade.
Say it 51 times then -- YOU are the idiot. He is doing and saying exactly what the bankers pay him to do and say. Get a clue.
But why? Why are the banksters wanting him to look like an idiot to the masses?
What's the plan, then?
Sheesh.
He doesn't look like an idiot to the masses...just to the informed.
No seriously uncle bens gonna start a campfire with dollars to take some out of circulation thus strengthining the dollar and crashing commodity prices along the way
If he burned 1 dollar per second, it would take 31,709 years to burn a cool Trillion.
How's he gonna do that? Seen the returns on the Maiden Lane test balloons he's tossed out there?
Ben only does what he is best at.
what's that, sucking D, taking our money, and passing gas?
www.forecastfortomorrow.com
just as Bernanke likes to brag that he studied the great depression, someone in the future will brag that they are an expert in studying The Bernanke and what NOT to do
Ben still has an "THAT WAS EASY" button shoved up his ass to pluck out in case of emergency
Well thats what he claims, he has some 15 minute magical 'reset' button, now I'd like to see what it is exactly.
Whats he gonna do, raise rates? Thats a laffer. Stop QE? OK enjoy another stock market and bond free fall. Go further with QE? Fine, watch the dollar collapse and oil silver and gold shoot to the moon along with food prices.
Start World War III
Yep exactly.
world war III has already started- it's just taking it's time to pick up speed. Libya was the beginning, Iran will be the tipping point. get under your desks, boys and girls, the bombs are about to go off...
I wonder what new leases Harvey Silverstein has taken out lately?
larry silverstein?
Increase the capital reserve requirement.
Interest rates remain low, banks can lend less, Ben can keep printing.
Right, bankrupt unemployed food stamp america will just have to put up more capital. Im sure that will work great.
....gas still goes to the moon, recession still ensues, house prices collapse further.....
Lol it's all going to work out just fine, isn't it? Bernutty is singlehandedly ruining the consumer economy for years.
www.forecastfortomorrow.com
Lol it's all going to work out just fine, isn't it? Bernutty is singlehandedly ruining the consumer economy for years.
www.forecastfortomorrow.com
Lol it's all going to work out just fine, isn't it? Bernutty is singlehandedly ruining the consumer economy for years.
www.forecastfortomorrow.com
His magical reset button is raise rates. He has gone public stating he has a reset button (but didnt say what it was and the consequences). Additionially, he is on record stating the government has a spending problem. Combine that with the budget road shows going on, I have to hand it to the Bernak, he has put the spot light on congress. When his string masters are fully out of treasuries and sitting on weak dollars (PIMCO already, just waiting on a few others), he will raise rates. Strengthen the dollar and let PIMCO buy back in. The public will blame congress. Congress does not have savvy to point it back at Bernank. Bernank will be in a defendable position by pointing at congress and stating he warned them. Now, if this is sufficiently defendable, I dont know.
He will help the dollar in the short run but come back and "save" the stock market before the election.
Really and hows he gonna do that?
Start World War III
Yep, exactly.
LOL
The best laid plans of mice and men...
I dont think men had alot ot do with it...
Your pick Ben, leave you in the room with a bullet in a gun and a noose thrown over a rafter.
If the choice is between sacrificing the peons' "economic recovery" or sacrificing Wall Street's wealth effect, its not even really a choice for Ben. The politicos have nothing to do with it. A corporation will replace its entire public relations arm and dictate directly if it means the survival of the corporation and the paycheck of the execs.
I concur. There is absolutely no evidence that anything will be done to serve "the small people." The 2012 election will just be another game of which is the lesser evil. Already Obama is pulling out "the evil speculators" card of deception as a way to explain away the rise in oil prices.
It's what he is best at....Blame it on someone else........
This dumbfuck has done nothing as POTUS except force bamma-care on us through a corrupt process of backroom payolla via pelosi/reed, bankrupt the country spending TRILLIONS we don't have and tear down whatever standing this country had remaining. Now after 2 1/2 years in it's fuck the country....I'm running again....Unbelievable!!
Yeahp and look what the shitbirds in Nevada and Sanfran did; they voted Reid and Pelosi right back into office. Americans deserve every inch of that big fat black dick that is coming their way. I am just going to point at them all and laugh when TSHTF and they all scurry around trying to figure out what just happened after lapping up the propaganda from Obama for the past 2.5 years. From a safe distance of course.
I dont know that i deserve the ass phucking even if i am an american. I always voted against socialism, well.....at least the few times i bothered to vote.
Exactly! Obama will blame Bush. The challengers will Blame O. Either one will already be vetted by the elite. Policy will stay the same. Only the scape goat changes.
But really...lets be serious. Ben and Geithner and all the rest arent misguided but well meaning PHD theoreticians, they knew exactly what they were doing. Drive the dollar into oblivion so they can have their 1 world govt, 1 world currency new world order.
I know a lot of people around here dont like that kind of talk but Im sorry, its a fact.
The problem is they have to devalue against something, but what? They want to devalue against the Yuan but China is having none of it. That means there are only commodities left. So, there goes your one World Order down the fiat shitter.
Oh Im not saying their new world order plan will work, its the dumbest idea ever and will fail spectacularly for them.
Problem is, failure is their game plan. All they have to do is to destroy any and all competition, until people have no choice but to beg them for sustenance.
I expect to see the FEMA camps fill up voluntarily, being labeled refugee shelters.
Creepy thought.
In survivalist lingo those camps are fedghettos and it is prophecied that most people will go voluntarily.
Well....from my perspective the entire scheme was a fuckup that was never gonna work. Regardless of motive or intent. These people are total, complete and undiluted fkn idiots.
Arrogant 'Masters of the Universe' mostly end up in not so lofty positions on the end of a rope.
We can only hope.
It was, is, and will continue working for Them, exactly as planned. It wasn't meant to work for anyone other than the Elites. They'll continue draining the economy until they see the pitchforks, and then it's off on the private jets to places that will never extradite them. Most will "settle" on free land in a small country in the Middle East. Just like they left what was left of Germany in the Weimar collapse, and moved the operation.
The conspiracy theorist saw it coming again and nobody else could have possibly seen it coming. Government still lying about 9/11 and JFK too.
They aren't far-sighted enough to be implementing any grand one-world scheme here. I don't buy it. They are reactionary and they will drive the dollar down to a point, then another currency will become the whipping boy and the dollar will reverse its course. This is the logical approach if you believe "they know what they are doing."
Ben and co. are front men. They follow orders, not make them.
"Take your pick, but choose wisely"
...for once.
I have absolutely no faith in any of these folks ability to 'choose wisely'. My observations of their behaviour suggest they will choose the stupidest, dumbfuck course of action and pursue it to the bottom of the Atlantic.
Are they dumb or do you just not understand the game?
Well.....I been thinkin and drinkin.....maybe more drinkin than thinkin......but I think you’re right. Hell yeah. I’m the problem here. I got everything ass up. These guys are geniuses. Stickin figures made from nothin onto bank balance sheets so they can keep lyin cheatin thievin and payin themselves & their cronies grotesquely massive salaries & bonuses for producin....errr....fkn nuthin. How to pay for it all? Everyone else can pick up the tab whenever they fill their gas tank, eat or breathe. Now that’s genius. You on their team? Got room for another snout in the trough?
If a lower dollar/higher oil /gass at the pump ultimately gets the liar in-chief out of office-- then Bernanke is to be commended
The equities are what Ben knows best. The financialized economy is all Ben knows. He is a one trick pony. His pals screamed bloody murder when the stock market tanked in the 2008 crisis. His task? To juice the markets. These guys don't even know the meaning of the words "real economy". They live in a financialized dream world and that is fine with them. Their real problem, as the above article points out, is that the lower orders still have a vote. Though candidates are hand selected for them by TPTB, some candidates are going to be hard to control when voters begin to reject the two parties hand selected wall-street gang.
His task was a controlled implosion of the dollar, while keeping the 401K zombie general public placated. Thats all.
Yes, but what about the neandersheep?
Thats them.
I don't disagree with your overall reasoning, but I see no evidence of this ocurring.
The vaunted Tea Party freshmen stepped right into line when they were presented with the facts.
I thought/saw this too. scary.
I am convinced that the financial elite believe that there are no financial problems they cannot fix. Consider ; - Since the creation of the FED, the world has gone through two world wars, 1 depression, the complete discrediting of 2 governing ideologies - Nazism and communism.
If you were one of the masters of the universe you would feal infallable as well. Any one of these events could have been their end, but they prevailed. I am afraid that their plan will continue and most of us will be in a lot of pain.
...Must read/view...
Happy Earth Day 2011 American Experience Documentary "Earth Days" .....
http://goodthoughtsgoodwordsgooddeeds.blogspot.com/2011/04/happy-earth-d...
Fuck earth day, May day, communist bullshit.
+1
+1. When this shit is over with, I want to put all those hippies to work, digging the landfills back up and sifting through the contents. But they won't be called landfills then, they'll be called "natural resources".
We'll see how they like getting on board my fucking recycling bus.
I've been telling people for years that today's dumps are tomorrow's treasure troves. Eventually it might become profitable to mine them for silver and other recoverable commodities.
My ex always complained about me not recycling. I said one day people will be
digging up the landfills, going dammint no Crt's or Al cans. What a shitty landfill.
The world was worried about Global Cooling and controlling the climate before we all froze to death when the first earth day was celebrated.
It's climate change now. All climate fluctuations are bad and caused by men who do anything the cult of gaia disagree with.
Didn't you get the memo? The new term is "climate disruption".
I hear they're working on a new memo. They haven't come up with the new term yet, but the word "weather" is to be outlawed.
Confirmation bias is a bitch.
Buggy Ben Finds A Way to End QE..... taking a cue from a bank in India:
Termites eat millions of Indian rupees in bank
LUCKNOW, India – It was an all you can eat buffet at the bank.
An army of termites munched through 10 million rupees ($222,000) in currency notes stored in a steel chest at a bank, police in northern India said Friday.
The bank manager discovered the damage when he opened the reinforced room in an old bank building on Wednesday, police officer Navneet Rana told The Associated Press.
"It's a matter of investigation how termites attacked bundles of currency notes stacked in a steel chest," he said. The money was put in the chest in January.
The police have registered a case of negligence against bank officials in Barabanki, a town 20 miles (30 kilometers) southwest of Lucknow, the Uttar Pradesh state capital. In India, police register a case before opening an investigation.
The FED has been buying Termite Futures...
Boweavils eat cotton.
Survivors eat hippies. Long pork, bitches.
Long pig.
And "slow elk".
LOL
Bernokio already decided.
Dollar takes the dive. Economy RIP.
Yes Im basically 100% sure youre right. They cant reverse course even if they wanted to, which they dont. The whole point from the start was to quietly CRASH the dollar, while keeping the NEANDERSHEEPLE placated by the 'looks pretty good to me' DOW which the general public has been conditioned to view as 'the economy'.
While it may be a genius plan, it is doomed to utter failure, it will never work it will not be accepted even by sheeple.
Ben doesnt care. His text books are telling him CPI is low. Infact he believes the rising price is due to speculators. How do you think Obamma got the idea to investigate speculators?
POTUS: Timmah, whats..uh..whats going with those gas prices!?.....
Timmah: Uh, dunno. Ben said CPI is flat. That guys knows his books! Must be somthin else. I know GWB talked about speculators once...
POTUS: You know for all I said about GWB, turns out he was good at sniffing out a boogey man.. Update the teleprompters, Im goin' on air!
You know the shits about to hit the fan when the speculators say theyre going after the speculators.
All the real action is in meta-speculation.
Now how do i game that?
This is exactly what i do not understand. How can people who claim to understand the feds mechanism or "means" not see the point or the "ends?"
Is it because that whole NWO thing is a conspiracy and they don't want to sound crazy? There was another "conspiracy" not to long ago...
A certain nations people were being economically oppressed by another nation... There was a successful revolution because good men were not affraid to appear crazy, even when standing up to the greatest power the world had ever seen.
I dont see much difference taking on the Crown 234 years ago, and the money changers today.
keep up the good work Tyler. Some of us on here (like sheepdog) get it.
+1
Wow thanks! Id say you get it too, these are not well meaning but misguided PHD's at all.
Quick preamble - I know we have all debated for years many points here on ZH - the sanity of current monetary policy, the depth or veracity of the recovery, the potential Machiavellian schemes of alleged masterminds behind the curtain... I've seen some optimists here branded as trolls, but they are just staking out their own views. I've been one of the pessimists, as I believe the world has lived beyonds its means - or too few have lived within it. I think Bernanke and the Fed thought they were 'fixing' things, but were operating on too short a time horizon.
Right now, Bernanke is operating in uncharted territory from what he studied during the Depression. Different from the Depression, we have different mechanisms to move liquidity around, and - I believe - much more quickly than in the 1930s. Instruments like ETFs and the advent of electronic trading make the water slosh in the bucket much more quickly than it did 80 years ago. This has created the potential for tremendous instability, but also more rapid realization of 'reality' (e.g. Greek bond yields). There is obviously money (fiat or otherwise) out there chasing yield in the form of commodities and speculative bets. What we don't have is meaningful innovation and value creation. Time horizons have become incredibly short - one need only look at election cycles, quarterly reporting, and reality television - to realize this.
Bernanke and the Fed need to focus on a sustainable monetary policy with a strong currency, or we'll be solving this with a new currency after the next great war or revolution. SD1 above suggests that's the plan, but I'm just not sure that was their original intention. I think they thought they could take a structural problem and fix it with smoke and mirrors in three years instead of 20 years, and they thought wrong.
Think of the time horizon of a gold coin.
Now, take a look at the time horizon of a 95% backed by interest bearing debt money. The moment you add interest, time becomes money.
Well, we're wound up what? I think 50:1 in europe is common.
I agree . While some readers here at ZH maintain that Bernanke is corrupt and working for the interests of a priveleged few I personally don't believe that . I think the man is out of his depth or , if not that , then simply incompetent .
Those options are not mutually exclusive. All of those things can be true at once, and likely are (as per my post below).
Why did Bernie Madoff use a Ponzi Scheme instead of actually manage an investment portfioio? Doesn't the answer include a little of all of the above?
He did that because the whole "investment" game is a sold to you type proposition. The whole concept is ludicruos. He knew that.
Actually he did what he did because his father was fucked over by the SEC and he was just getting even with the system. He could give a shit about anything else.
If TPTB really just make a series of mistakes then why is it that they are allowing the military-industrial complex run rampant with murder? Why don't they ever tell us the truth? It just so happens to be deceit, after deceit, after deceit...
I don't see any good intentions.
When we have a truth-telling President that doesn't need a billion dollars to stay in office we might have some hope.
Because the wars serve a purpose--they distract the population, they reduce the population, they reduce unemployment, they make money for corporations, they produce medals and promotions (careers) for military folks.
I was with you up until this,
I think you need a little more pessimism, because personally, I can't imagine why sophist criminals would have the least bit of concern for any of that. Their job is to carry water for their masters who loot and steal "legally."
The job of a sophist is to manage sheeple's expectations and beliefs. To think that they have anything to do with actual monetary policy decisions (let alone understand them) is not a reasonable assumption.
They approach the job with a flawed belief system because it serves their masters' purposes, while protecting them from rational scrutiny. If anyone tries to challenge them, they slip into a Keynesian trance, explaining how they have to manage the economy, because, "Somebody has to!"
It's just another chapter in Plato's Allegory of the Cave. Sophists are merely projecting false shadows to create the appearance of form. In reality, there is no form, only facades.
I'm pretty pessimistic! Agree that there is a flawed belief system at work, but suspect short-termism and lack of critical thinking more than a grand conspiracy. I will keep the tin foil at hand just in case though...
Yeah, but they see the world from a completely Aristotelian viewpoint while they're doing it.
Plus one for plato cave allegory.
The first recorded explanation of the concept of epiphenomena.
Studying shadows on the cave wall rather than face the light.
"what we don't have is meaningful innovation and value creation"
That is the crux of the matter, no doubt about it!
The only thing about your post in favor of bennie is that these more rapid transmission mechanisms and greater information also give him better steering as he tries to stay on the road and avoid a deflation or a crack up.
Well ... all this is not quite true ...
The Fed is more or less irrelevant, since hundreds of millions of the world's motorists set the 'price' of oil, that is: the relationship between oil value and other social/economic values.
Bernanke is like a witch doctor, putting on the scary mask of a university professor and waving his arms. Finance sets its own rules and creates its own credit (and has been doing so all along). It does not need a Fed, in fact it did quite well for itself without one!
The laws all are following are those of physics: mostly thermodynamics which is a relentless and unforgiving bit of business. The other rules that are being followed come straight from Mom who said, "never use capital for operating expenses!"
Of course, the American Way is built around doing just that, now what?
The really interesting science experiment which is going to take place very soon if not underway already is the one where there is a liquidity shortage even though the central banks are pumping out as much liquidity as possible. The experiment will indicate where there are upper limits to liquidity provision: I say of course as there are limits to everything.
Bernanke: (waving arms and dancing) "Hooga- booga, hooga- hooga- boogah!
All the liquidity went straight to the banks and under the sheeples 401K's to keep them placated a bit until Ben takes all the 401K's under the Treasury, for 'safe keeping' of course.
No, banks (fractional reserve) are fundamentally unstable organisations. They need a lender of last resort facility to remain viable. Now we get the occasional large systemic failures which are socialised, instead of many small private ones.
That is when the Market freezes, the Markets get shut down for a few months, and all winning bets against the bankers get voided.