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It’s the ‘Bernank’ that done it!
Bernanke has made himself (and thereby the entire Federal Reserve) the lightening rod for domestic and international inflation. What a dumb PR move that was. There are any number speeches by Ben and his cohorts where they stuck there neck out and said, “inflation is our goal”. Ben & Co. are going to eat those words. If you ask ten people if INFLATION is ‘good’ or ‘bad’ nine of them would say it's BAD. It is the way we grew up. Ben is doing something bad.
A very small percentage of the population actually understands what the
Fed is doing. Far more people have watched the YouTube cartoon
explanation of QE than have listened to/read Bernanke. But a great
number are aware that the Fed is engineering some inflation. So when
they get hit in the head with some big price increase the first thing
they are going to say is, “It’s the ‘Bernank’ that done it!”
Consider me as a case in point. I already pay a ridiculous $1,629 a
month for health insurance. But today I get this nice letter from United Health telling me that the good folks at the NY State Insurance Commission have approved a 12.5% increase for just the next six months. I am looking at a 25% YoY increase in healthcare cost.
That NY State is granting 25% rate increases is a crime in my opinion.
That Obama Care created a three-year window of maximum gouge
opportunities for the likes of UNH is also a crime. The problems with
health care and the cost of insurance can’t really be blamed on Ben and
the Fed. But I suspect that many folks are going to blame him anyway.
After all, he’s the one who wants inflation, so when we get it, the
fingers of blame are going to be pointed in his direction.
There are millions of Americans who are getting letters like this. You will see stories in the MSM in the next week or so. "Insurance Companies Gouge Customers"
is a good Thanksgiving story. It’s even possible that the crooks in
Albany will be called on the carpet for allowing such an egregious
increase in a basic cost of living. The boys at UNH will defend what
they have done and just blame the increase on INFLATION in the cost of
health care at every level.
I (begrudgingly) accept that Bernanke and the rest of the merry folks at
the Fed don’t really want inflation that just eats up consumers. They
want to see inflation from the demand side as evidence that the economy
is in fact growing. But it is not going to go down like that.
Over the next few months we will see a number of big jumps in basic
costs. Food, health care, insurance, transportation, gas and electric
are all going up in price. We may not see the evidence so clearly in the
headline numbers. My 25% increase in health care will not show up. That
does not matter. Tens of millions of people will feel this pinch. There
will be no blaming of OPEC, or China this time. The blame is going to
be placed squarely on the shoulders of Bernanke and his vocal enthusiasm
for ‘the’ inflation.
I will tell you that I was damn mad to see my annualized insurance bill
go up by 25%. A lot of others will soon feel the same when they get a
similar letter. Or when they look at their next electric bill, the cost
of vegetables or even the price of a pair of jeans. A good number will
say in anger, “It’s the ‘Bernank’ that done it”.
Bernanke has tied his success to a rise in inflation. America is going to absolutely hate that.
Even greater public distrust of the Fed will inevitably follow.
Politicians will jump on the bandwagon (they always do). The end result
will be that QE will be a disgraced policy and the Fed will be weakened
for a long time. Ben will get his inflation, he is also going to lose
his job.
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Well hopefully you have a few million saved. My bosses wife was in the hospital for a month and it cost his insurance half a million ($500,000), and if you currently do not have proof of insurance and are not going to the ER you will never even see a doctor. That is how the father of one of my friends died, the hospital did not take his insurance policy and actually refused cash, they got millions in the lawsuit but only because he died. In most cases you will just have to stumble along with whatever ails you.
That $500,000 would probably have been less than $10,000 (including airfares) if your boss had sought treatment, and paid cash, in the real world.
not if you are a protected minority, then you can just blame white people for it
Just, cancel your extortionist health insurance, "insurance" is a
fraud anyway (they don't pay out). Becoming a vegetarian, exercise
and a healthy life style is your best self insurance. Works for me.
Insurance is a pooling of risk. I never really understand how this could work for the majority of participants. The benefits must accrue to those who get hit with the risk and in order for the pool to work at break even, let alone be profitable a minority of people must get hit with the risk. Add in drugs like a $90,000 treatment that extends a person's life three months, joint replacements and other such things you are probably going to see participant's cost rise as innovation and capabilities continue to ramp up.
Some form of segmentation may help so that "basic" health care is affordable for all and those who wish to participate in fat tail health risk pools have an option to do so.
Since genetic composition is a preexisting condition the window for creating a low cost plan for low risk people is closing.
Bring back HEW? Health is out of control, tuition costs are running up nearly as fast, and welfare ... , well enough said.
In the spirit of financial jeopardy the answer is "What is inflation?".
Nothing better than the Orphan Drug policy. It's gun to your head pricing model ransom your health. USG gives exclusive license with no regulation to cure a disease with unfortanely too few victims to try to make a business keeping their symptoms arrested with strange, synthetic chemicals. The result is charging 75,000 per treatment to extend life a month. Find the wealthy, extract as fast as possible. A disease machine cannot be accredited to heal but itself.
Like every other distortion in the market, health care prices spiraling up can be attributed to Govt interference. Insurance of any kind should only cover accidents and catastrophes, and NOT known and common occurences, such as visits to the Doctor. Auto insurance does not cover oil changes or car washes, why does everyone expect health insurance to cover Doctor visits? The moochers got the Govt to help them game the system, and now, everyone is paying for their free ride!
Bruce, really?
Drop your insurance. You need care, go to the ER if need be. WTF are you thinking? There is very little incentive to buy health insurance.
Exactly! Begs a re-post:
Paying out 20K a year for health insurance??? Holy Fuck! Why not just put that money in a savings account? Then if you get sick you can buy really good treatment without worrying about your claim being rejected. Also you cut out the overhead of the insurance company. No matter what happens Bruce at that exorbitant rate you will be able to pay for extremely good care somewhere in the world with all of the money you will have put away for your care. This is just a Canadians point of view however.
12 years ago I got hit with 50 million to one shot, Anthrax. Few see the other side. I did. 4 weeks ICU at cornell medical, NYC. One of the top in the world. Saved my life, no question about it. Cost from the hospital all in? $270,000.I would not have got in the door without A+ insurance. Go figure.....
not to trivialize your unfortunate circumstance, but wouldn't that qualify as emergency care which the hospital must treat regardless of ability to pay?
I got sick. Real sick, real fast. Went to a local hospital. Was there 24 hrs. The ER folks did their best but told my wife I was dead in 24 hours. She pulled strings and got me to Cornell, infectious desease. It was nip and tuck. I was so close to lights out they could not put me in an ambulance, I would not have made the trip. I was put in a helicopter.
The chopper was paid by ins. If it had not been I would not be writing you this note. Cornell would never have taken me without ins.
This is a very fucked up system where if you have ins. you live, if you don't, you don't...
its crazy they say just go to emergency room, if you have any assets, the hospital will collect from you just like any business you stiffed, emergency room is only not paid by you if you have no money to pay...so assuming you have a house with some equity, some savings, you are supposed to chance that being wiped out by not having insurance...please....besides the points you make.
you are correct. But then again , in Europe you would have been dead. I can't imagine socialized health care (and I've lived in 5 euro countries) would have gone over and beyond the way you described. PS, WCMC is an excellent facility.
Canada/UK I was dead as a door nail. Not a chance.
PS. I was in Peekskill, not wcmc.
It's a beautiful thing this depopulation by benefit strategy. The system has been reconfigured along with 10x cost for same old Education now 10x easier to deliver on DVD. Housing 10x has been done with no there there.You are a billing-unit and get used to it. What they give you is more to their benefit to benefit you to death when your Social Security outgo comes to Papa.
Keep your distance from livestock (especially the two-legged type!) :>D
and a vaild one in the USA.
I don't know, boys...I'm beginning to think Prechter might be right after all. Hoard paper dollars.
(intentional provocation)
In deference to Robert Prechter and Charles Nenner, cycle timing is extremely difficult when the ground-rules are being changed during the game. Prechter and Nenner have both said that the cycles are still there and in-the-waiting but their manifestation has been distorted by the operations of the FOMC.
If you are being fascetious, you would be wrong. If you are being serious, I don't get it.
?:
He stated in his post that the post was an "intentional provocation". Their is nothing to get. He did it to spin you up. You accused me of not reading in a earlier post but now I can accuse you of the same but mine is backed by evidence :-)
the velocity of money is still falling off the charts. it doesn't matter how much they print, if none of it enters circulation, or people use it pay off debt, which doesn't generate economic activity. A few days ago there was a post about cash shortages for ATM machines. Rumors mostly, but think about it, the velocity of money stops, then what? There is no money. Why did anyone (other than Bernanke) think it would come to this, - he is printing dollars in order to buy back bonds, thus forcing the bond holders to redirect that cash into some kind of economic activity. Eventually (as Prechter says) the Fed may put time strips in money to force you to spend it, or penalize savings account holders who leave their money on deposit for too long a period. Hoarding cash will be a crime, like hoarding gold, which in GD1 was a crime.
The Fed is pretty nervous, but repatrioting bonds, should China dump Treasuries, Bernanke will pop the champagne.That money will enter circulation, and it is definitely inflaionary, which may be why he is beating their chops, trying to stir something up. (he also feels we can call those T bonds and issue new bonds at zero interest, even if we have to buy them ourselves.
the notion of a global savings glut will probably enter the discussion pretty soon, and the solution to that is to further destroy the value of cash. spend it or lose it is their motto. and of course the most prudent course of action is to do the opposite of what the fed encourages you to do.
I don't know about expiration dates on cash and all that and I cannot stand behind everything Prechter (or Nenner...) says in that regard. I can only agree with their points about having a distorted wave cycle secondary to the Fed's monetary policy.
If the Chinese sell their T-Bills, the price would plummet and yields on new issues would have to rise. I cannot imagine the Treasury issuing new bonds at zero, just to have the Fed buy them. Talk about a distortion. That would truly leave us in the Twilight Zone.
Vaid points, however I seriously doubt that should China dump Treasuries, Bernanke will pop the champagne. The Fed wants inflation but only so far as they are in control of it. I maybe missing something but I think The Fed does not want inflation for inflation sake he wants it to help the banksters, could you elaborate.
Fed buying time trying to devise a slower way to boil the frogs. The old way has too many temperature spikes and unnecessary jumping.
They think they are always in control of inflation. While deflation is another problem. Repatriating Chinas T bond holdings, is (according to Prechter) inflationary, but would come about slowly. A few years ago the UST printed several T in cash because they thought China wold call their bluff, and they were (obviously) not worried one bit about it. They would prefer it actually.
Money creation through debt creation is almost instantaneous. Exchange the bonds for cash, and let them buy American stuff. (oh I think I see some demand, and ergo inflation)
Bernanke is calling their bluff, he holds all the aces. Worse comes to worse we pay them in gold. (Good deal for us). In the end this may be off the wall, but America becomes the richest nation in the world, and the poor Socialist peasants eat dirt for another millenium.
"Bernanke is calling their bluff, he holds all the aces. Worse comes to worse we pay them in gold. (Good deal for us)."
This is getting exciting! You guys are getting so close!
It is all about China.
Before it was all about Russia, remember? CCCP, the dreaded Soviet Union. Along comes LTCM, the Asian Contagion and boom! President *(hiCk!*) Yeltsin, oligarchs, free Ukraine and on and on. It was nothing short of economic warfare and the United States won. Russia now is a little more than half the land area than at its greatest empire.
Twenty years later, there has been a reeeeeaaaaallll ticking time-bomb put under the door of the Chinese. To all those people who think Bernanke an idiot (MIT grad, Princeton professor...), I would suggest that this has been the intent all along. The man is a genius. Greenspan, the same (and remember that Greenspan was all about gold in his Ayn Rand days. Think he forgot all about that?). Paulson, of Goldman-Sachs, along with Robert Rubin; guys in position who could make this happen. Bill Clinton got the legislation passed with a (wink, wink, nudge, nudge...) Congress.
Think about it.
If the scenario unfolds as grateful supposes, as he sees the Fed/Treas plan unfolding, it would indeed make America the richest country on earth by a mile. Basically, we took over the world, not with our military but with our money.
Fascinating, isn't it?
Bruce:
I understand policies are community rated in NY, so a 25 year old pays the same premium as a 60 year old.
I assume, if correct, you do not have to prove your health?
If so, what about other insurers? Many insurers impose "durational rating." That means the longer you have the policy, the more you are charged.
Long-term loyalty is not encouraged.
How can any business thrive on that way of doing business?
By the way, thanks to ZH, I bought "The Creature from Jekyll Island." I thought it was a fiction book!
Don Levit
From the NYT just off the presses:
Consumer Risks Feared as Health Law Spurs Mergers
I've been smelling a foul stew a bubbling.
Mephistopheles speculating in food commodities.
http://johannhari.com/2010/07/02/how-goldman-sachs-gambling-on-starving-...
Beelzebub burning the wheat crop in Russia, rice crop devastation in India, and a USDA choice recognition of one of the most spectacular crop failures in the U.S ever.
http://www.fas.usda.gov/psdonline/circulars/grain.pdf
My mama is making din din for all you tonight!
http://boredtown.com/index.php?_i=1&id=9156
This is a result of the "Enron Loophole", allowing nitro swaps in commodities, previously outlawed until our friend, Gramm-Leech-Blily Act again.
Affects oil, food, energy. Remember the Costco rice buying near riots before crash. The hot money will drive these up, as before. Oil went up from 40 to 140 then back to 50, up to 85. NOT NORMAL. FIX IT.
Thank you for choosing Oxford.
We need change that obese, overpaid, dumb citizens can believe in!
Quayle/Quayle 2012!
Sarah Palin for Sec of State!
That would be Dumb and Dumber.
Mother Theresa for Health & Human Services
Judge Roy Bean for Supreme Court
Perry Como for Energy Department
Tony Soprano for Dept. of Justice
Flo for Consumer Protection.
Mr. Clean for CDC
Rush Limbaugh for UN Ambassador
Inspector Clueaseu for Director FBI
Mr. Bean for CIA
Mr T. Defense Department
Tim Geithner, Treasure Department
Oh hell, this is getting preposterous....
No, they won't. The average idiot will blame the store they're standing in, or the mgmt of the store, or the CEO of the store chain....whatever. Maybe they'll just blame "the rich". I assure you, the very last person to get blamed is Ben - by design.
Those who can think beyond their own noses will blame The Bernank.
And those persons will have sway over others. Ben will be the culprit.
He screwed up big time.
Not for nothing the Fed Tank owners put a benignly bearded academic with no real world business experience into the Greenspan machine. He is there 'till he invents a new bubble like QE2 stock-wealth enhancement strategy and beyond to thrive off the Treasury curve while US savers's interest are mandated 90% confiscation. Fed head's on the deck with a triple hook deep in his belly and in a net harpooned, thrashing about being King of the Sea to the EuroBankers and China who own his contracts to deliver with no job creating environment foremost in thick public debate.
I can't argue with you or the mammoth. One thing I do believe is that ole Ben is not committing hari-kari. He ain't falling on no sword. Now, he might be slitting his own throat out of ignorance or hubris, but it's not voluntary.
I'm thinking more like scapegoat for those that will be in need of cover. He's one of the few that can't point his finger elsewhere but lots of fingers will be pointing at him. So far the only thing he's come up with is, it's China's fault. After what appears to have been China successfully demonstrating the ability to use what they received from the investment they made during Bill Clinton's term I'm not sure how far TPTB will push them.
Do they let any fool post articles here? Inflation is not the increase in prices; it’s the increase in available money and credit. It would be a better article if the author stated that due to supply dynamics the oncoming increase in pricing will be confused with the symptoms of inflation. All I can say is that the YouTube cartoon explanation of QE must have struck a chord as this is the third time today I have read an article attacking it. Gathering from these attack articles unlike the author I think an increasing number of people are starting to understand what the Fed is doing, and its scaring the establishment. How people like this author expect us to trust the same people who did not see the crisis coming, denied its existence, and then told us it was contained to now provide the solution is just asinine
I think you missed the point. I said twice that the Fed could not really be blamed for some of the cost increases that are happening. That is irrelevant. Ben will be blamed. That is the way things work. Someone has to get blamed when things go wrong. I'm merely suggesting that Ben is going to take the blame.
How you got my words to read that I was somehow trying to convince you that the Fed was going to provide a "solution" is beyond me. I would never suggest that. Go to my blog and look at the last two months. I have a dozen articles all trying to shout that what Ben is doing will destroy us, not save us. Have a read, and calm down.
bk
bkrasting@blogspot.com
Maybe he means price inflation. Probably he is assuming people reading zerohedge can infer the difference based on the context.
I don't think he actually is defending Bernanke. Just pointing out that people will blame him when prices go up. But if Bernanke had not publically stated that he was trying to create inflation, people might not blame him. Thus Bernanke made a strategic error.
Anyway, that's what I took away from the article. I admit that I didn't watch the video.
How could it be interpreted any other way? One would have to read other than the black part to come to another conclusion.
Valid points I had not thought of it in that light. The video though put it in context for me it was a direct attack on The Fed but specifically on QEII. Had he not mentioned the video as a fallacy or had he attacked its assumption then I would agree with you, however he did not do that so I assumed he was defending Bernanke, but as you did not derive this then it might not be the case.
hey Pal, you must be some kind of wanker working in the BLS, because your complaint is ridiculous
who gives a rats a__ about some textbook definition of inflation, when government mandated health insurance goes up by 25%
is that not a concept you can wrap your declining grey matter around?
didn't think so!
I always got A's in my economics philosophy classes (the big 'K"), so its not like I've never heard of these concepts.
Words might as well be bricks walling the space between the verbalizers. Beyond words inflation or price-too-hot-to-touch is simply a Feeling that there is less available of what you want and you get less of what you want with the type of money you are using. Whatever rationale or dancing definitions and rules you wish to project the concept is a game perhaps you need to be playing. I'd rather retreat to beyond word descriptions for feelings and get to the dancing.
Now we get the heart of the matter. I agree and as I mentioned above (you may have missed my post) who cares about definitions. One of the points this article seems to imply is that my healthcare went up 28% and even though it’s not the Fed’s fault they will get the blame for it. One of the issues I have is not who will get the blame but how in the hell did we get jacked up in the first place. This article clouds the issue which is one of the reasons I’m so upset. How can our government allow this to happen? I do not care if the Fed gets the blame, if it’s caused by inflation, or Obamacare. The fact is that no matter who is to blame the government is not looking out for the people as all roads seem to lead to their incompetence
http://en.wikipedia.org/wiki/Fourteenth_Amendment_to_the_United_States_C...
the government is not looking out for the people's health care interests-- because the health care industry bought off the govt. it's all as simple as that.