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Jim Grant Says All The Things That Ben Bernanke Avoided During His Press Conference, And Much More

Tyler Durden's picture




 

Considering the only soundbite that was relevant from Ben Bernanke's 45 minute 2:15pm oratory was that "we don't have a precise read on why this slower pace of growth is persisting" America, and the entire civilized world, could have done just as well without it. Instead, we should have listened to Jim Grant, who once again correctly identifies all the things that the Fed chairman should have said (Bernanke certainly focused on the other side): "What we are not going to get is a concession that QE2 has achieved its unintended consequences, namely a lower dollar exchange rate, a higher gold price meaning weaker confidence in the dollar, slower economic growth and a higher measured rate of inflation. Those are some of the things that have come out of this experiment and let us call it by its name money printing...How do we know that this 30% gain in the Russell and 20% gain in Dow since the Chairman spoke in August, how are we to know these are real values. The prices are up, but are people who are buying these stocks on the back of the Fed, are they doing something wise from an investment point of view, and if the market is too high because the Fed has put it there, what does the Fed do when the market comes down, which opens the fate for QE3." And on a far more important topic which we will soon hear much more of, namely extensive US money market exposure in Europe, which will be completely locked up if, pardon, when there is a major liquidity run in Europe snagging American money market liquidity: "The money market mutual funds have nothing to do in this country cause rates are zero, go to Europe. So money market mutual funds investors are taking quite ponderable risks for about a 0% return, these funds are yielding a few basis points only. But to get those few basis point, these funds are crossing the Atlantic right smack dab in the middle of the European banking crisis. This is a prime example of the unintended consequences of this massive intervention by our central bank." Indeed, this is just one simple example of the massive clusterfuck, which certainly does not need Greece's $5 billion notional in CDS, to make the Lehman liquidity freeze seems like a little melting ice cube. And since everyone now agrees that Greece will default, and it is only a matter of time, all the trillions in dollars in the shadow and open banking systems that we have been exposing for years now, will suddenly be locked up in the forms of 1 and 0 in computers belonging to institutions that are no longer operational. And most unfortunately, the man in charge of it all, has a quivering lip problem.

Much more in the entire must watch interview with Bloomberg's Margaret Brennan:

As to what a lock up of money markets would mean, here is an oldie from 2009 in which Paul Kanjorski explains how close we came when money market funds broke the buck:

 

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Wed, 06/22/2011 - 19:24 | 1393435 goldencross10
goldencross10's picture

Clusterfuck good word choice, but yes, Bernanke needs to grow a pair and mention

the issues currently at hand, i do believe we are in for quite an armageddon of problems

once "money printing pt 2" is over.

Wed, 06/22/2011 - 20:24 | 1393481 Shell Game
Shell Game's picture

Sadly, BB 'growing a pair' will never happen, that will be left up to The People to do, most of whom's are still ascended..

Wed, 06/22/2011 - 20:25 | 1393557 THE DORK OF CORK
THE DORK OF CORK's picture

What does growing a pair got to do with this problem ?

This baby took 40 years to grow - Daddy Ben cannot beat the shit out of his son now.

His son is a monster.......and Granddaddy Alan will enjoy the spectacle from the comfort of his armchair.

You are dealing with a deeply dysfunctional family with no state services to call on when the going gets tough.

Malinvestment Mel grew up into a Cruel Bastard - they should never have fed him so much oil but it seemed easier at the time.

 

Wed, 06/22/2011 - 20:40 | 1393571 Shell Game
Shell Game's picture

What does growing a pair got to do with this problem ?

As I said, Ben won't and I agree, it's moot.  No, it's the ambivalent, oblivious public who will have to grow a pair with the mess that's coming..

Wed, 06/22/2011 - 21:13 | 1393613 THE DORK OF CORK
THE DORK OF CORK's picture

In my more charitable moments I like to think that Ben & Alan do not see the economy as a physical unit.

They walk down the street and see $$$ coming out of doors and going down sinks.

They will not entertain the quality of investment & consumption , just the quanity - perhaps because they cannot measure such forces so therefore in their eyes it does not exist.

They are broken glass Keynesian's in that regard - also they have a quantum view on inflation as if it were a Schrodinger cat like phenomena.

Real core wealth creation comes from technological change - since the American military industrial complex has degraded from a late 1950s / early 60s strategic nuclear doctrine to a more colonial operation the stimulus operations have feed consumption & policing to a larger & larger extent - this is a net energy negative operation that needs the blood of others to survive.

 

Wed, 06/22/2011 - 23:32 | 1393780 TruthInSunshine
TruthInSunshine's picture

Starve Wall Street.

Crush The very private 'Federal' Reserve 'Bank' -

 

How the Nation's Only State-Owned Bank Became the Envy of Wall Street

| Fri Mar. 27, 2009 6:33 PM PDT

The Bank of North Dakota is the only state-owned bank in America—what Republicans might call an idiosyncratic bastion of socialism. It also earned a record profit last year even as its private-sector corollaries lost billions. To be sure, it owes some of its unusual success to North Dakota’s well-insulated economy, which is heavy on agricultural staples and light on housing speculation. But that hasn’t stopped out-of-state politicos from beating a path to chilly Bismarck in search of advice. Could opening state-owned banks across America get us out of the financial crisis? It certainly might help, says Ellen Brown, author of the book, Web of Debt, who writes that the Bank of North Dakota, with its $4 billion under management, has avoided the credit freeze by “creating its own credit, leading the nation in establishing state economic sovereignty.” Mother Jones spoke with the Bank of North Dakota’s president, Eric Hardmeyer...

Thu, 06/23/2011 - 00:10 | 1393816 Rick64
Rick64's picture

 A dangerous precedent to the FED if this is example is followed in other states. It has several advantages over the present banking establishments, and instead of being backed by FDIC the state backs all deposits which seems to help them make better financial decisions.

Thu, 06/23/2011 - 00:14 | 1393840 markmotive
markmotive's picture

Jim Grant vs Brad Delong on QE3: http://www.planbeconomics.com/2011/06/22/jim-grant-vs-brad-delong-on-qe3/

This is good stuff.

 

Thu, 06/23/2011 - 12:11 | 1395191 Temporalist
Temporalist's picture

+100 Thanks for the link.

 

 

Thu, 06/23/2011 - 00:23 | 1393848 TruthInSunshine
TruthInSunshine's picture
by Rick64
on Thu, 06/23/2011 - 00:10
#1393816

 

 A dangerous precedent to the FED if this is example is followed in other states. It has several advantages over the present banking establishments, and instead of being backed by FDIC the state backs all deposits which seems to help them make better financial decisions.

Exactly, which is why Ben Bernanke or his handler junked me.

If more Americans realized the truth you speak, the Federal Reserve would already have been toast, maybe for good this time.

The Central Banksters of the London Central Bank mode DETEST this truth being announced publicly.

Thu, 06/23/2011 - 05:01 | 1394034 dolly madison
dolly madison's picture

"A dangerous precedent to the FED if this is example is followed in other states."

Last I heard, 9 more states are working on setting up state banks.

Thu, 06/23/2011 - 09:34 | 1394355 Baptiste Say
Baptiste Say's picture

It's hard not for a ND bank to make a profit, when it's borrowing at 0% to loan out at 2, 3, 4% to farmers who have no problem paying due to record food prices.

 

 

Thu, 06/23/2011 - 12:38 | 1395326 Rick64
Rick64's picture
 Its not hard for any bank to make a profit if they don't overleverage or invest in risky investments (derivitives) in hopes of making record profits. BND has a different set of objectives, they actually want to grow their economy by helping their communities.
Thu, 06/23/2011 - 00:06 | 1393808 Shell Game
Shell Game's picture

Indeed, Keynesians like to think of us as their resource, no more and no less, to be managed and kept in dynamic equilibrium with their system. 

Back to the cojones.  I rarely hear folks mention that for the same number of decades we consented to those who governed us and their methods.  We paid our taxes and gave our consent. We voted them in and gave our consent.  We enjoyed the bull ride up toward an artificial prosperity, believing we all were entitled to the glam.  Even when rips in the matrix first appears in the late '90s, still we voted them in and paid them our taxes.  We still had our fun enjoying the unbelievable prosperity we saw rising around us.  I really do believe we have the government we deserve, unless and until we grow balls and demand otherwise.

Thu, 06/23/2011 - 00:19 | 1393845 Spirit Of Truth
Spirit Of Truth's picture

When there's nightly angry protests with pitchforks and torches outside Fed buildings around the country, then the PhD regime will flee their ivory towers and a true solution can be had.  As it stands, people who think money is the source of value in the economy are running the system into the ground while enriching their Wizard of Oz benefactors in the background:

http://thespiritoftruth.blogspot.com/2010/11/and-god-will-wipe-away-every-tear-from.html

JMHO.

Wed, 06/22/2011 - 20:07 | 1393523 Greeny
Greeny's picture

It's never going to be over. Pyramid must

stay afloat. "Crossing the Atlantic on the middle of

European crisis" Dude is on drugs.. Every Large player on

Earth have crisis in that matter.. Like US doesn't have one?

Or maybe Japan? Greece is just small POS. California

has 6 times bigger GDP than Greece.

Wed, 06/22/2011 - 21:36 | 1393637 lieutenantjohnchard
lieutenantjohnchard's picture

terrible faux post. remember, as greeny, you'v told the zh community that english isn't your first language. writing things like "dude is on drugs" is a dead giveaway you're a poseur, and a bad one too.

Wed, 06/22/2011 - 22:42 | 1393711 Prometheus418
Prometheus418's picture

*edit* 

Comment removed due to misreading the first time through.  Yep, you're caught out, Greeny.

Wed, 06/22/2011 - 23:45 | 1393787 DoChenRollingBearing
DoChenRollingBearing's picture

Lt. J. C.,

I always liked that word "poseur".

Wed, 06/22/2011 - 23:17 | 1393760 Two Towers AU AG
Two Towers AU AG's picture

The Armageddon of problems will really start the day.. China or Russia say the following when buying the US debt.

You trust in God, We trust in Collaterals... Show us the Gold to see the money.. 

Wed, 06/22/2011 - 19:27 | 1393438 RobotTrader
RobotTrader's picture

Meanwhile, clamoring for AAA-rated, Gilt-edged, Uncle Gorilla Notes continues based on the fear trade.

Looks like the 90-day T-Bill will be zero percent by tomorrow morning.  Short rates are now the same as 2008 levels.

Who would have thought that the "unintended consequences" of a hockey-sticked Fed balance sheet and deficits growing exponentially would have resulted in a mad panic into U.S. Dollars and Treasuries??

Looks like the Fed is not printing fast enough.

Wed, 06/22/2011 - 19:48 | 1393485 Re-Discovery
Re-Discovery's picture

Print or don't print.  It doesn't matter.  Enough printing has already happened.

This won't end until . . .

Gold = Dow. 

 

Wed, 06/22/2011 - 19:54 | 1393489 equity_momo
equity_momo's picture

yup

Wed, 06/22/2011 - 20:17 | 1393534 PY-129-20
PY-129-20's picture

You mean like: "To print or not to print: That is the question!"

Well, I am sorry, but BB isn't like Hamlet...

It always ends like this:

http://www.youtube.com/watch?v=WWaLxFIVX1s

Thu, 06/23/2011 - 02:26 | 1393969 Printfaster
Printfaster's picture

"To print or not to print: That is the question!"

Not even close.

The answer alwys is:  Print Faster.

 

Wed, 06/22/2011 - 19:28 | 1393441 carbonmutant
carbonmutant's picture

"...extensive US money market exposure in Europe, which will be completely locked up if, pardon, when there is a major liquidity run in Europe snagging American money market liquidity"

"... since everyone now agrees that Greece will default"

What's the best way to Threaten a Greek Politician?

Wed, 06/22/2011 - 19:42 | 1393473 Rynak
Rynak's picture

Let's see:

The ruling party is already finished if it goes forwards. Reminder: 80% of the population are against what it is doing. If they go through with it, the damage to the party will make the suicide of the SPD in germany look like peanuts.... they will be literarily obliterated.

So, appealing to party voter share, is no option.

They could smear all the politicians..... that may work. But doing it in an even wider scale, than is now the case, runs high risk of detection.... and with the current mood in society, it will demand heads to roll.

That leaves us with threats of economic sanctions, sabotage and so on. This probably has the highest chance to work... not because the threats are dangerous (many of them would paradoxically actually HELP greece), but because in their illusionary world of economics, they will seem catastrophic. So, you know - the usual stuff: THE WORLD WILL END IF YOU DO NOT DO WHAT WE SAY!

Wed, 06/22/2011 - 23:35 | 1393778 carbonmutant
carbonmutant's picture

At the end of the day everybody who votes with G-Pap is going to get a piece.

And once they get get their FY money there is no downside risk.

The people in Syntagma Square need to find some downside risk for the members of Parliament who sell their country into slavery.

Wed, 06/22/2011 - 19:31 | 1393447 bugs_
bugs_'s picture

oh i wish i was the chairman of the feeeeh ed

that is what i'd truely like to beee eeee  eeee

'cause if i were the chairman of the feeeeeh eed

everyone would be in love with meeeeeeee

 

Wed, 06/22/2011 - 20:02 | 1393511 Translational Lift
Translational Lift's picture

And most unfortunately, the man in charge of it all, has a quivering lip problem.

That's because he knows just how fkdup he is/we are!!!

Wed, 06/22/2011 - 21:27 | 1393626 Things that go bump
Things that go bump's picture

"...and then I heard them mentioning my name - and leaving me the blame."  Pilate's dream - Jesus Christ Superstar.

Wed, 06/22/2011 - 22:29 | 1393697 A_MacLaren
Thu, 06/23/2011 - 00:39 | 1393866 snakeboat
snakeboat's picture

and that poll matters about .00000000001%

Wed, 06/22/2011 - 19:39 | 1393448 euclidean
euclidean's picture

Hooray for Jim! Someone telling it like it is -

a. cart before the horse, how about jobs prosperity creates sound market - now that's a novel idea Jim. Something like P/E ratios back in the single digits??

b. either the Fed owns the stock market, or the stockmarket owns the Fed - The Fed is Walls Street's bitch. Period.

May your insights remove others heads from others arses, or at least their own. But I doubt it. The cranium rectum is epidemic.

Borrowing to the hilt at 0.25% for capex means your interest payments double on the first 0.25% rise, then triple on the next. Only a minor flaw.

edit: BTW, the higher gold price was not an unintended consequence. That is what is underwriting all this. The stockmarket is just the open market Ponzi wheel.

Wed, 06/22/2011 - 20:02 | 1393513 sheep92
sheep92's picture

do you mean like aapl which will is estimated to earn 28$ per share next year on a share price adjusted net cash of about 250. or a 1 year fwd p/e of 9 for arguably the best technology company on the planet.

The stock market is already discounting another recession.  If it does not come to pass we are going to get an up crash.

 

Wed, 06/22/2011 - 19:33 | 1393451 viator
viator's picture

“there is a 3.5b euro hole in the Greek 28.6bn medium-term austerity plan according to troika officials.”

http://twitter.com/#!/MatinaStevis/statuses/83662663313391616

Wed, 06/22/2011 - 19:39 | 1393453 KickIce
KickIce's picture

Consumer based economies do not work when there are so few consumers.

he speaks well for an embalmed person.

Wed, 06/22/2011 - 19:39 | 1393466 cossack55
cossack55's picture

Oh, the US has plenty of consumers.  Problem is they don't have any money or credit left.  Fuck the Fed.  Raze all their buildings to the ground and salt the earth. Banish the scum from memory (except a statute proclaiming anyone whoever mentions the words Federal Reserve shall be immediately executed).

Wed, 06/22/2011 - 20:22 | 1393555 KickIce
KickIce's picture

Amazing that any government would allow themselves to be controlled by any private entity.  Our politicians are nothing but puppets.

Wed, 06/22/2011 - 20:56 | 1393597 aheady
aheady's picture

Amazing? Seems pretty trite to me. Apparently everyone has a price.

Wed, 06/22/2011 - 21:16 | 1393621 Rusty Shorts
Rusty Shorts's picture

"You are NOT the contents of your wallet"

http://www.youtube.com/watch?v=O1qBhAG3TfM

Wed, 06/22/2011 - 23:13 | 1393755 DaveyJones
DaveyJones's picture

yup, Ben avoided many things today, including his humanity

Wed, 06/22/2011 - 23:03 | 1393745 HungrySeagull
HungrySeagull's picture

Colt, Winchester and Remington Customers that is along with ATK, Olin and Wolff.

Mr. Weak Lips is about to either wear out his tolerance for XANAX or lose it by the next meeting.

To me, August is not going to happen.

 

What this man needs is to get laid and stop being a weepy. MWAH! /sarcasm.

Wed, 06/22/2011 - 19:36 | 1393459 A_MacLaren
A_MacLaren's picture

Must have been the camera angle.  I couldn't see Margaret's Pom-Poms as she cheered for the ChairSatan.

Wed, 06/22/2011 - 22:19 | 1393685 rufusbird
rufusbird's picture

This thread should have been titled "Bloomberg's Margaret Brennan" debates Jim Grant...Problem is then I never would have bothered to watch the video. Who in the focking world wants to watch some bimbo news bitch attacking their guest. I don't get it at all. Somebody needs to tell these A**holes that to ask a question and then shut their mouth and let the guest answer the question...He gets extra points for keeping his cool and giving such great answers. I have even more respect for Jim Grant than before...

Wed, 06/22/2011 - 22:33 | 1393706 A_MacLaren
A_MacLaren's picture

Somebody needs to tell these A**holes that to ask a question and then shut their mouth and let the guest answer the question...

Here's where you go to leave feedback...

http://www.bloomberg.com/apps/feedback?site=ae

Feedback

We welcome your comments and questions on our products and services. Get in touch with us and we'll answer your questions 24 hours a day.

Wed, 06/22/2011 - 22:42 | 1393713 rufusbird
rufusbird's picture

I quit patronizing the Bloombert site many months ago. Fock um...they are part of the problem. Their fucking news people always attack their guests. Fock em again.

Wed, 06/22/2011 - 19:41 | 1393462 Dagny Taggart
Dagny Taggart's picture

Grant shredded the Fed. What you own, owns you Bernanke!

Thu, 06/23/2011 - 00:04 | 1393803 CompassionateFascist
CompassionateFascist's picture

Metaphysics. Actually, the RedShield owns the Fed. And, therefore, we owe the RedShield a lot of money. They create the $$$ in cyberspace, loan it to us, and we had better pay it back. + interest. Or Else.

Wed, 06/22/2011 - 19:40 | 1393468 Caveman93
Caveman93's picture

I'd rather pay higher prices....doh wait no I wouldn't...I'd rather pay higher prices...oh no I wouldn't. Geez.

Wed, 06/22/2011 - 19:43 | 1393472 buzzsaw99
buzzsaw99's picture

excuse me, but the bernank has already demonstrated a willingness to bail out all big euro banks too. The risk of a bank crisis in europe is laughable. one. big. happy. family.

Wed, 06/22/2011 - 19:43 | 1393474 Lord Welligton
Lord Welligton's picture

That man is not stupid.

Wed, 06/22/2011 - 20:47 | 1393549 sschu
sschu's picture

That man is not stupid.

True, neither Grant nor Bennie are stupid.  :-)

Some choose to believe Bennie is a puppet, just a front man for the cartel.  Maybe so.  This then implies that the Bamster is also a puppet, otherwise how could Bennie keep his job given what is going on and Bennie's complete inability to provide rational explanations or further solutions to the economic problems. 

This may all be so.  It is difficult to see why the Bamster has not come out and vilified Bennie assuming the Bamster wants to win re-election.  Bennie is a great scapegoat, who likes bankers anyway?  I can imagine the discussions between the White House and the Federal Reserve, either Bennie prints to get the economy cooking or he is fired.  Clearly Congress will be not be in the mood for "fiscal stimulus" so what are the options?

This "Operation Twist" is not going to cut it, they need to fire up Bennie's helicopter to turn this stagnant economy around - along with some serious capital and price controls.  Expect massive amounts (trillions) of FRN to be disbursed by the end of the year.  Is there legal precedence for this?  Since when has that mattered ...

This economy is distorted now by central planning ... we haven't seen anything yet.

sschu

Wed, 06/22/2011 - 21:10 | 1393612 Calmyourself
Calmyourself's picture

That is correct and underestimating him or any of his cabal is a fatal mistake.  I am staying loose let robo make bets..  This will take longer and be more painful than most of us fear.

Wed, 06/22/2011 - 19:43 | 1393475 gaugamela
gaugamela's picture

zzzzzzzzzzzzzzzzzzzzzzzzz

 

DeLong put Grant in his place in the WSJ debate. All Grant harps about is that savers only make 1bps while we have 9% unemployment.

 

Oh yes, and that inflation is just a killer isn't it.

Wed, 06/22/2011 - 20:13 | 1393529 BlackSea
BlackSea's picture

The water is getting warmer little froggy... But don't worry, happy dreams now.

Wed, 06/22/2011 - 20:13 | 1393530 BlackSea
BlackSea's picture

The water is getting warmer little froggy... But don't worry, happy dreams now.

Wed, 06/22/2011 - 20:59 | 1393604 Catullus
Catullus's picture

By own him in the WSJ debate, you mean be a pathetic apologist for Greenspan for nearly a decade.

Wed, 06/22/2011 - 23:24 | 1393774 Stinkeye
Stinkeye's picture

Great. Another f*ing genius. DeLong is a Keynesian. http://delong.typepad.com/sdj/2009/04/silvio-gesell-and-stamped-money-an...

Wed, 06/22/2011 - 19:47 | 1393476 jomama
jomama's picture

sort of old news, but hearing about the Fed being to blame and the root of all evil is becoming about as passé as the lame Right vs. Left false dichotomy.

http://www.marketskeptics.com/2011/06/the-esf-and-its-history.html

Wed, 06/22/2011 - 19:47 | 1393477 wherewasi
wherewasi's picture

 

Here at the office we're forced toi endure CNBS all-day every-day!!!!!

 

I have never seen a midday interview on CNBS where they gave the guest so much room to maneuver and freedom to voice.  Outstanding by Bloomberg.  Is this the way they run that station?  I gotta have more of this...

Wed, 06/22/2011 - 23:08 | 1393748 HungrySeagull
HungrySeagull's picture

How about turning CNBS off for a day or two.

 

Workers will be happy and more productive.

Wed, 06/22/2011 - 19:47 | 1393479 robertocarlos
robertocarlos's picture

Margaret is beautiful.

Wed, 06/22/2011 - 21:29 | 1393629 knowless
knowless's picture

I couldn't help but think that she was sort of a bitch for countering him with inane talking points, so as to not allow him to actually seem coherent. but i guess besides the hollow soul her body is okay.

Wed, 06/22/2011 - 21:55 | 1393661 Rick64
Rick64's picture

 I got the feeling she didn't grasp the whole meaning of what he was saying, so she couldn't really ask any relevant questions or rebuttal.

Wed, 06/22/2011 - 23:21 | 1393763 francis_sawyer
francis_sawyer's picture

What we basically have here is a redheaded version of 'Betty' (Revenge of the Nerds) talking to Bill Nye the Science Guy...

It might work...

 

Wed, 06/22/2011 - 19:45 | 1393480 sbenard
sbenard's picture

I love this guy! Let's make HIM Fed Chairman!

Thu, 06/23/2011 - 00:12 | 1393824 CompassionateFascist
CompassionateFascist's picture

Ah, no...the RedShield is happy with its current employee. I met a RedShield once. Jr. branch of the family. In LA. Brief eye-contact....like looking into the pits of hell.

Thu, 06/23/2011 - 00:16 | 1393844 TruthInSunshine
TruthInSunshine's picture

If you ever want to shake a pesky Rothschild, go to the coldest room in the place you are in. Stand under an air conditioning vent. Go into a walk in cooler. Go outside if it's chilly out.

They have difficulty tolerating anything less than 68 degrees F, being cold blooded.

Wed, 06/22/2011 - 19:46 | 1393482 gigeze787
gigeze787's picture

RE: "...the entire must watch interview with Bloomberg's Margaret Brennan"

Let's get the terminology right: That would be Bloomberg's HOT, MEGA-BABE Margaret Brennan...

 

Wed, 06/22/2011 - 21:57 | 1393663 JLee2027
JLee2027's picture

At 11:33 Jim says "Quanitative Eating", so he agrees.

Wed, 06/22/2011 - 23:09 | 1393749 HungrySeagull
HungrySeagull's picture

Anything is better than a certain someone in FDIC who went boing, boing, boing with the bobbing head.

Wed, 06/22/2011 - 19:51 | 1393490 narnia
narnia's picture
massive hyperinflation in Econ PhDs
Wed, 06/22/2011 - 19:52 | 1393492 cocoablini
cocoablini's picture

The fear is so thick you can shovel it.

The FED is trying to get organic, fear-driven investors into bonds to save the bind market. The bond market is 80x larger than the stock market. You can consider the stock market totally manipulated and easy to control compared to the HUGE bond market. If rate go up, derivative instruments explode, mortgages go tits up, costs blow up.

Bernanke had his shot to save the world and now he basically has nowhere to go for the moment except to let the stock market dump out and drive people to the safe toxic asset called US Bonds. Maybe even tangentially even saving corp and junk bonds.

What a massive can kicking and losing strategy to keep you ponzi mechanism rolling

Wed, 06/22/2011 - 19:57 | 1393501 buzzsaw99
buzzsaw99's picture

i think you may want to check your facts, or add a decimal point somewhere or something.

Wed, 06/22/2011 - 20:07 | 1393514 topcallingtroll
topcallingtroll's picture

It is still larger than the stock market.  I think he makes a good point.

The people who think the bankers want hyperinflation are probably wrong.

Mild deflation is perfectly acceptable to creditors.  It is the sweet spot actually.

Wed, 06/22/2011 - 20:23 | 1393550 buzzsaw99
buzzsaw99's picture

not nit picking, if s/he had written "10x bigger" I would have let it go. 80x is hyperbole.

Wed, 06/22/2011 - 20:28 | 1393556 topcallingtroll
topcallingtroll's picture

gotcha, roger that

Wed, 06/22/2011 - 20:33 | 1393560 buzzsaw99
buzzsaw99's picture

i also disagree with this:

The FED is trying to get organic, fear-driven investors into bonds to save the bond[sic] market...

The fed has done no such thing. The Bernank has been actively trying to drive people out of t-bonds and into stocks and other risk. He has also been lending at 0% with the same purpose in mind.

Wed, 06/22/2011 - 20:54 | 1393593 topcallingtroll
topcallingtroll's picture

good point.

Wed, 06/22/2011 - 20:46 | 1393578 Ropingdown
Ropingdown's picture

Mild deflation would be the sweet spot for creditors if only the majority of US credit was not in mortgages.  If the US needs less labor (ergo stably high unemployment) and housing prices just mildly deflate, the major US creditors (or else the taxpayer...) face a debacle.  While it is off point, I'd add that guaranteeing ALL US money-market funds (as we did in 2008-9) when 50% of their assets are loaned out in Europe... is not going to fly.  Not with me, at least. laugh.

Wed, 06/22/2011 - 23:06 | 1393750 HungrySeagull
HungrySeagull's picture

Actually Student Loans.

Then there is credit card debt.

 

That interest rate will be the butterfly that brings the sky down on our world.

Wed, 06/22/2011 - 20:54 | 1393591 mr_sandman
mr_sandman's picture

Mild deflation is perfectly acceptable to creditors.  It is the sweet spot actually.

For unleveraged creditors, yes.  However, the big ibanks are both borrowers and creditors, and their capital base for leverage is the spread between borrowing very short and lending at long term treasurys.  Deflation drops the spread between short and long because (at least so far) the Fed hasn't figured out a way to make short term nominal rates negative.  When you have reduced capital and you have to unwind positions that are levered 20x on that base, you get screwed.  This applies in some form in leveraged situations or fractional reserves in traditional banks.

 

Also, this doesn't really pass the empirical smell test.  Why are spreads at all time highs right now and ibank profits are as well?  In 2008, when we had a mere flat credit market and were approaching 0% deflation, the banks crashed.  The same thing happened in the dot com crash.

We had mild deflation most of the 19th century, but the bankers still wanted the creation of the Fed.  If deflation was the "sweet spot," why would they stand behind an institution that has devalued the dollar by 95% in the 20th century when in the 19th the dollar was actually stronger at the end of the century?

Wed, 06/22/2011 - 20:56 | 1393599 topcallingtroll
topcallingtroll's picture

I see your point.  A leveraged banker and an unleveraged creditor, such as a person with a savings account, look at the world differently.

Wed, 06/22/2011 - 21:07 | 1393610 mr_sandman
mr_sandman's picture

Yeah it's tricky.  I think they like it that way :-)

 

Another analogy I'd give is if money is backed by debt, and debt expansion (with corresponding credit increase) leads somehow to price inflation and vice-versa, which would a banker prefer: debt expansion or debt deflation (default)?  The modern neoliberal, monetarist scheme states that debt increases are wonderful because it increases money and prosperity.  It's a connect-the-dots from there.

Wed, 06/22/2011 - 19:53 | 1393495 Landrew
Landrew's picture

Love James! Plain spoken reality, the truth few want to hear. 

Thanks Tyler for bringing this interview to my attention. I hadn't seen the

interview and would have been lesser for it. James has a way of getting to 

the bottom line quickly without the B/S.

Wed, 06/22/2011 - 20:02 | 1393507 Antarctico
Antarctico's picture

Woo -- Jim Grant is like Batman in a bow tie! Really great hearing him rip into the fed, but OMG, the talking head chippy conducting the interview was sooo stupid -- really, damn near too dumb to fuck.

Wed, 06/22/2011 - 20:09 | 1393521 cocoablini
cocoablini's picture

Kandorski was scammed twice. Fool me once...

I'm guessing he knows now that foreign banks weregetting the money to cover their margin debts and imploding derivative values.

So, he says we saved the world from collapse because of a 3 trillion dollar run on the banks. He means he saved and Bernanke and Paulson saved the global kleptocracy from collapse.

Now that we "saved it" lets throw someone in jail, please???

Wed, 06/22/2011 - 20:09 | 1393522 zorba THE GREEK
zorba THE GREEK's picture

 Paul/Grant 2012

Wed, 06/22/2011 - 20:13 | 1393532 miker
miker's picture

Look, major shit happpened to the US economy over the past couple of decades that our government thought they could "control".  It's what happened to England when the US took over the manufacturing wealth in the early 20th century except it happened at the speed of light and we were off the gold standard so things could be manipulated alot more. 

So we all realize the Fed is fallible and in fact quite powerless in many situations.  So is Congress.  The best we can hope for is that neither fucks things up too much in their quest to "control" the situation.  Unfortunately, they probably will.

 

Wed, 06/22/2011 - 21:08 | 1393608 aheady
aheady's picture

"So we all realize the Fed is fallible and in fact quite powerless in many situations. So is Congress. The best we can hope for is that neither fucks things up too much in their quest to 'control' the situation."

Uh, what?

Wed, 06/22/2011 - 22:03 | 1393672 Rick64
Rick64's picture

lol

Wed, 06/22/2011 - 21:19 | 1393624 Crab Cake
Crab Cake's picture

Fallible is not the word I would choose...

Thu, 06/23/2011 - 00:12 | 1393821 TruthInSunshine
TruthInSunshine's picture

Me neither.

If the Fed is "fallible," my farts smell like rose petals and lavender.

Wed, 06/22/2011 - 20:17 | 1393533 XPolemic
XPolemic's picture

"It would have been the end of our economic system and out political system as we know it".

Sounds perfectly delightful. I wonder which parts of those systems they wanted to save, other than their own six.

Wed, 06/22/2011 - 21:15 | 1393617 baltar
baltar's picture

pretty telling, they just wanted to keep their jobs/power and the bankrupt economy was used to justify a further power grab by the federal government.

 

Wed, 06/22/2011 - 20:18 | 1393536 Sokhmate
Sokhmate's picture

Off topic. Need advice: how reliable is placing orders with tulving.com? are they trustworthy?

Wed, 06/22/2011 - 20:23 | 1393551 topcallingtroll
topcallingtroll's picture

.

Wed, 06/22/2011 - 20:18 | 1393542 topcallingtroll
topcallingtroll's picture

So what is total Greek sovereign debt? 250 billion Euros?  It was estimated to be 216 billion in January 2010.

Let's say they apply a 50 percent haircut to it all.  that is a 125 billion loss.  Five billion notional CDS is not a lot either.  The ECB could backstop the CDS and buy up all those greek bonds through a quantitative easing program and there would be barely a hiccup in inflation.

 

Everyone is hysterical over that?  I guess that shows how conservative bankers and politicians really are, or perhaps they don't want people to really know how easy it is just to print the shit up?  Hell half the people I ask "where does money come from" thinks our dollar is still backed by gold and no one has ever answered the question correctly.  I suppose that must be the real reason.  The governments really don't want people to be aware of what central banks do, the nature of fiat, and how easy it is to increase the money supply.  Bailing out Greece so easily with money appearing just by magic might really shake people up.  Make them question the entire premise of central banking with a debt based fiat.  I can't think of any other reason why politicians and the ECB are so freaked out over Greece.

Wed, 06/22/2011 - 22:59 | 1393736 cranky-old-geezer
cranky-old-geezer's picture

ECB is freaked out over Greece for the same reason congress is freaked out over the debt ceiling.  Both are tyring to avoid a currency collapse.

Wed, 06/22/2011 - 23:11 | 1393752 HungrySeagull
HungrySeagull's picture

Greece Greece Greece.

Makes me sick, almost as if the 300 should have just let the enemy through to save us all from this tragety.

Wed, 06/22/2011 - 23:40 | 1393784 hardcleareye
hardcleareye's picture

You may want to consider the total external debt for the country, in the case of Greece that number is over $500 Billion US dollars.  The other consideration is Spain, with a grand total of $2.1 Trillion US dollars of external debt..... Try adding the extenal debt of all the PIIGS and divide by 2 (50% haircut). 

That dog don't hunt.  They are not going to rub a little bit on newly printed money on this and make it go away.

(I disagree with you but did not junk you.)

Thu, 06/23/2011 - 03:32 | 1394002 Urban Redneck
Urban Redneck's picture

The sovereign paper is the first domino

It triggers the CDS domino, and the domestic creditor domino.  In the process it wipes out every domestic bank in Greece using Greek debt for regulatory capital, along with the national pension and a whole bunch of private pension schemes, insurance companies, etc.  (hence the external debt relevance).

Without a money printer or FDIC to step in bailout the Greeks again, nobody gets their paychecks, paychecks, or welfare - an the riots get real.

Then the rest of Europe goes 2008 (again) and starts wondering exactly how many of which Greek cards are held by various counter parties, and credit freezes.

Of course Bernanke would never allow one of the big banks outside of Greece to fail, as that could trigger a derivatives nightmare, but bow long can he pull it off while simultaneously underwriting US debt issuance, and without interest rates rising and triggering the other derivatives nightmare? 

Thu, 06/23/2011 - 06:12 | 1394067 topcallingtroll
topcallingtroll's picture

So most everyone below believes in the domino theory. The ECB AND CU Believe in ring fencing.

Wed, 06/22/2011 - 20:22 | 1393546 bankonzhongguo
bankonzhongguo's picture

But there is a larger stealth element operating here in that the current system (US, Europe) want to throw-out the "failed" system for a "superior," yet even more unaccountable international monetary system - a SuperFed and the introduction of the XDR to buy your Happy Meal.

The Chinese have that saying; 'beware what you wish for.'

Instead of '33 Liberty,' decisions - like 'regional interest rates' will be made on a converted nuclear aircraft carrier somewhere off the coast of Madagascar.

The Fed exists for its shareholders - the Banks.

Fed practices the needs of its shareholders.

The Banks want to simultaneously rape the country through Fed practices and then seek sanctuary in a new regime unencumbered by Law or consequences.

Until the next election, the Fed and company will simply dog paddle from one manufactured crisis to another.

After all these YEARS, the Bernak shrugs his shoulders for 45 minutes?

 

 

 

 

Wed, 06/22/2011 - 20:21 | 1393553 onarga74
onarga74's picture

6.7 Japan-Tsunami warning

Wed, 06/22/2011 - 20:30 | 1393559 monopoly
monopoly's picture

Jim always a pleasure to learn from. Thanks Tyler.

Wed, 06/22/2011 - 20:33 | 1393564 PaperBear
PaperBear's picture

Money printing without the paper and ink.

Wed, 06/22/2011 - 20:48 | 1393582 chump666
chump666's picture

CDS spreads are widening (Asia) it's all Greece again...

fat stops on the EUR under 1.43 for all you FX traders.SHTF again

 

Wed, 06/22/2011 - 20:52 | 1393583 aheady
aheady's picture

Wed, 06/22/2011 - 20:53 | 1393584 jointhewave
jointhewave's picture

Watch the YouTube video...

Fallen Man: The Road to War & End of America

http://www.youtube.com/watch?v=bCjYx5kZ7EU

 

BRILLIANT!!!


 

Wed, 06/22/2011 - 21:00 | 1393588 JR
JR's picture

duplicate post

Wed, 06/22/2011 - 20:59 | 1393592 JR
JR's picture

a primer...

0% Interest Rates – Who Benefits? |Capital Research Institute | 06.21.11 (excerpt)

...The other day I was discussing money with someone, and I mentioned that as long as interest rates are at 0% the fundamentals remain the same: expect rising asset, food, and commodity prices, a continually devaluing currency, high unemployment, and basically, speculation will continue to be rewarded over savings and investment.

I said that gold as an investment doesn’t make sense.  It just sits there.  It is not income-producing.  It is not a growing business, it is a shiny metal.  But it IS a store of value.  Its value relative to a hypothetical basket of goods will remain constant.  You can still buy a goat in Central Asia for one dinar, 1/8 of an ounce of gold, the same price (I have heard) as 200 years ago.  The tough part for people to grasp is why the dollar price of gold is steadily increasing.  Doesn’t that make it a bubble?  No, it doesn’t make it a bubble, it means the currency in which gold is priced is being devalued.

If you have to fund a worldwide empire and the annual budget deficit approaches $1 trillion, and you then fund that deficit by printing money, well, (all other borrowing in the economy remaining unchanged) each year the total amount of currency outstanding will increase by $1 trillion.   A child grasps as much when playing a few rounds of Monopoly.  Ever play with a banker who lends money to all the players at 0%?  Me neither, but the inevitable outcome is obvious.  As the game goes on, the same amount of money will buy less goods, or in this case, less gold.  The game of Monopoly ends when the other players are not willing to sell you their properties for any amount of Monopoly money.  And that is where the crucial ‘real world’ difference lies.  Real properties, real assets, and yet, we use intrinsically worthless money!

Before you get excited, no, the Capital Research Institute did not just give investment advice, and no, we did not give the all clear to invest in real estate.  From 1990-2007, individual debt levels increased dramatically, with credit cards, 2nd mortgages, student loans, and house flippers all doing their part in setting ‘the more leveraged the better’ trendTo understand what assets will see their price rise the most, you have to understand that while national debts are growing, on the individual level people are deleveraging.  That means paying off their mortgage, selling the house and renting, or ‘downsizing’ their mortgage by selling their current house and buying a smaller house.  The next generation, with their severely dampened earnings outlook and weak purchasing power vs their parents at the same age, are still unable to afford real estate even at current US prices, so don’t expect them to put a bottom on the market, let alone raise it to new highs.

But again, the government is ‘making up the slack’ by borrowing record amounts, so don’t worry about the cost of essential goods like education, health care, food and energy decreasing.  You see, individuals use leverage primarily to purchase a home, and a small percentage also use leverage for speculating (they will tell you they are investing, though)!  But the government, well, it is borrowing money to fund its day to day expenses (the path to bankruptcy as we have explained many times).

Its day to day expenses include oil for the military industrial complex (so the price of oil will remain high or go higher), food (through the issuance of food stamps), health care, and education (the government is in the student loan business, meaning, they borrow money, which they then lend to students, who would otherwise be unable to afford skyrocketing tuition costs, so in effect the government is putting a floor on tuition prices).  Gold is going up because of increased demand by individuals around the world, Latin America, India, China, Southeast Asia, and not quite as quickly as those other regions, North America and Europe.   But the supply of US dollars is also increasing, and it is losing world reserve currency status.  That means all those people around the world who held US dollars as savings or reserves are going to want to finally spend that money, and many will convert into their own national currency, but just as many will want to buy tangible goods.

Imagine you are the central bank of… say, Brazil.  You sell your sizable ($300 billion is sizable, right?) holdings, but can you buy Brazilian Reals?  No you can’t.  The Central Bank’s reserves are quite literally the only thing backing the nation’s currency, so to back your fiat currency (Reals)… with your own fiat currency (Reals)… does not make any sense.  So more likely the Central Bank would buy a basket of goods (commodities) or, as they have done historically, they would buy gold.  Now imagine about 20 or 30 countries central banks making the same decision over a month or two.  And imagine what that would do to the USD price of gold.  Even if central banks hold off on pulling the trigger, individual investors around the world are coming to the same conclusion, so the process is underway.  If the Central Banks refuse to act then eventually they will become obsolete, their fiat holdings worthless.

Now, if we see that we are on this road to currency destruction, then why is nothing done about it?  The solution is to raise interest rates, not to 1 or 2%, but to at least 6%, the CRI’s rough estimate for inflation over the last 3 years.  Although the rationale cannot be fully covered right here, right now, it is a human one.   The richest, most powerful people on the planet are also among the most highly leveraged.  Raising interest rates would significantly weaken the dollar value of their assets, as well as increase the ‘operating costs’ (interest on their debt) of their speculative activity.   To take it a step further, our analysis indicates that the crucial consideration may in fact be not the wealth of those at the very top of the pyramid, but the wealth of those immediately beneath them, the bureaucracy of the oligarchy, as it were.  The hands and feet of the ruling class, the ones who administer, supervise, and direct day-to-day operations at the world’s largest financial firms, energy companies, media firms, think tanks, military industrial complex, intelligence agencies and so on.  Their overlords promised them vast riches, and basically guaranteed them investment success by lending them money and telling them how to spend it (in a more honest time this was referred to as insider trading and was even considered a crime).  The overlords promised more than they could deliver  (that is, after all, what they are good at, and what keeps them in power) and now find themselves between a rock and a hard place.

The decision to sacrifice the US dollar was made, rather than financially ruining the ruling class’ bureaucracy.  Sorry America, and sorry savers!

http://capitalresearchinstitute.org/

Wed, 06/22/2011 - 20:56 | 1393600 Hedgetard55
Hedgetard55's picture

That woman is an airhead.

Wed, 06/22/2011 - 21:22 | 1393619 Bay of Pigs
Bay of Pigs's picture

She asks Grant if he has "a worldview like Jamie Dimon"?

WTF? Just brutal...

Wed, 06/22/2011 - 22:05 | 1393677 Rick64
Rick64's picture

Yes that was rich.

Thu, 06/23/2011 - 01:12 | 1393911 Freddie
Freddie's picture

Amazing that some idiot junked you.  Grant as usual is right on the mark.  She had no clue what he was talking about.

Wed, 06/22/2011 - 21:06 | 1393609 treasurefish
treasurefish's picture

"A little bit of time to see what’s going to happen would be useful in making policy decisions." 

~ Ben Bernanke, 22 June 2011

Some people make things happen, some people watch things happen, and some people wonder what the FUCK just happened!

In other words, banksters make money, The Bernanke watches them make money, and we all wonder why we are losing our jobs.

 

END THE FED!

Wed, 06/22/2011 - 21:13 | 1393616 EternalVigilance
EternalVigilance's picture

"Wow" - Margaret.  Where has this guy been?  I have never heard

a better argument to eliminate the Fed.  Ron Paul needs to call this guy.

Comparing Fed ability to make decisions to black and white tv is priceless and genius.

This guy really gets it and knows it.

Thu, 06/23/2011 - 00:10 | 1393817 Bay of Pigs
Bay of Pigs's picture

So forget all the other great points he made? 

Wed, 06/22/2011 - 21:15 | 1393618 qpqsb
qpqsb's picture

New to the site so please excuse my intrusion on this blog. Does anyone have any insight as to the effects of the earthquake in Japan today? Thx.

Wed, 06/22/2011 - 21:19 | 1393620 RobotTrader
RobotTrader's picture

I don't know what The Bernank is waiting for.  Check out the interest rates:

http://noir.bloomberg.com/markets/rates/index.html

Why not just have the Fed announce that they are going to start buying stocks outright?

They could nationalize the entire NYSE and investors would still buy more Treasuries.

Wed, 06/22/2011 - 22:46 | 1393720 agrotera
agrotera's picture

If they did that the cat would be out of the bag...this way, the general public can continue to get gamed, with the sanctioned President's Working Group's blessing.  The owners of the privately owned Federal Reserve Corp already own at least half of the shares of every index...pretty sure J. Grant knows this because he said somewhere in his interview the Federal Reserve owns the market....forgot  exactly how he said it.   J. Grant is a big hero to do what he is doing--he is like Socrates, asking questions to get people to the truth.

Wed, 06/22/2011 - 21:21 | 1393622 Itsalie
Itsalie's picture

The moral hazard from the Fed's perpetual bailouts have reduced the MMF's memory span to goldfish-like 3 seconds. Lehman is stone age events, lost civilization territory for them. The ECB will end up printing money just like the Fed in a year's time. Low interests opoportunities will be over for the MMF in Europe. Then the same MMFs will be running off to seek newer higher yields of Asia, maybe India and China, just when the last straw is breaking the asian back. Asia is watching - their banks in great anticipation to earn fat commisions, while their governments watch in fear - fear of a repeat of 1998.

Wed, 06/22/2011 - 21:21 | 1393623 holdbuysell
holdbuysell's picture

Recommended strategy for a 401k account?

Wed, 06/22/2011 - 21:54 | 1393659 delacroix
delacroix's picture

change it to self directed. buy some silver miners, some agriculture stocks. cash out a portion, or borrow against it, and buy some silver, maybe a little gold.

Wed, 06/22/2011 - 21:59 | 1393667 TheGoodDoctor
TheGoodDoctor's picture

This works too if you can get it to be self directed.

Thu, 06/23/2011 - 00:49 | 1393878 snakeboat
snakeboat's picture

once you've switched to self-directed, give someone like Sterling Trust a ring as they'll manage a precious metals account (physical storage).  Of course, that's just my naive self not wanting to take the tax hit and hoping that some semblance of law allows me to maintain contact with the goods once the SHTF...   The spare household cash is in coins in the basement, covered with a 12 gauge.

Wed, 06/22/2011 - 21:56 | 1393662 TheGoodDoctor
TheGoodDoctor's picture

Stop contributing. Take a loan the max you can. Buy PM on dips. Or if you got let go just cash out and take the tax hit. And buy PMs and other forms of protecting your money like food and lead throwing objects. But don't listen to me. Everything will be fine. /sarcasm off

Wed, 06/22/2011 - 23:14 | 1393753 HungrySeagull
HungrySeagull's picture

Get it out of your Employer's control before they get idea to cap it with a low payout and automatically covert everything above to a annuity like ours did one night.

Move it into your control, even if it is just a pile of Silver in the vault somewhere on your property.

 

The 30% cash out penalty is meaningless to us this year because income levels are so low as to be essentailly tax free. They can still impose it and we wipe it with a swipe of a credit card. at 5%

Wed, 06/22/2011 - 21:59 | 1393664 TheGoodDoctor
TheGoodDoctor's picture

Doh. Twice.

Wed, 06/22/2011 - 22:56 | 1393730 RebelYell
RebelYell's picture

diversify and cash in a 401k is an important part   

Wed, 06/22/2011 - 22:58 | 1393737 theinebriatedsot
theinebriatedsot's picture

you really need to be told? cash it out - now.....and buy all the PMs you can afford. if they make you pay a cash-out penalty, so be it; at least you'll have something left. if you don't, and leave it alone, being denominated in dollars, you'll certainly lose all of it: what they don't debase away they'll force to buy their bonds with...essentially a confiscation........

Thu, 06/23/2011 - 00:02 | 1393799 holdbuysell
holdbuysell's picture

Very helpful and inline with what I thought would need to be done. Thanks much to all on this thread.

I hope others were helped as well.

Thu, 06/23/2011 - 02:03 | 1393954 Things that go bump
Things that go bump's picture

You are coming at this very late.  

Thu, 06/23/2011 - 02:03 | 1393955 Things that go bump
Things that go bump's picture

You are coming at this very late.  

Wed, 06/22/2011 - 21:25 | 1393630 agrotera
agrotera's picture

Margaret says, 'at 12:15 we should be getting more insight.' and Jim Grant interrupts her and says, "NO we'll be getting more words." 

Jim Grant is quite a soothsayer!!! May peace and blessings be his!!!

Wed, 06/22/2011 - 21:32 | 1393631 gwar5
gwar5's picture

Thanks TD. You and Jim Grant were most excellent. You both concisely summed up the clusterfuck and gave it a proper name.  

I've already warned mi amigos last week to beware what is going on in Eurotopia so they don't freak when ATM cards go dark.

 

Wed, 06/22/2011 - 21:26 | 1393632 Doc Scurlock
Doc Scurlock's picture

Once again, Clark Kent lays out the situation with clarity.  Maybe theres still hope for truth, justice, and the American way,.....maybe.

Wed, 06/22/2011 - 21:30 | 1393634 Sathington Willougby
Sathington Willougby's picture

 

Pushing on string.  Nothing new here.

Wed, 06/22/2011 - 21:55 | 1393643 FranSix
FranSix's picture

One thing Grant makes obvious mistakes on is that rates are not necessarily set by the Fed.

Inflation is going into bond prices and the corporate bond market, not Euro denominated assets.

Grant should be ecstatic that the unintended consequence of Dodd-Frank may be backwardation in gold futures.

http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/

 

To which I might add:

You're soaking in it

http://youtu.be/_bEkq7JCbik

Wed, 06/22/2011 - 21:46 | 1393652 blindman
blindman's picture


inflation is a/the cause of unemployment in a global
market so how can
the fed truly have those two as mandates? the result
will be the fed will always have a mandate that demands
intervention and manipulation of the markets creating
insider information opportunities.
it would only be possible for the fed to fulfill both
mandates if it was the monetary authority in a closed
system, which it is not but perhaps is ambitious to be?
as inflation will result in labor arbitrage in the global
market. etc...
the fed's only real mandate is to facilitate debt enslavement
on the compliant by the owners of the fed. commodification
theology hocus pocus covering up glaring inconsistencies and
contradictions. political aggression fills the void created
by the ongoing heist.

Wed, 06/22/2011 - 21:51 | 1393653 eddiebe
eddiebe's picture

Ben is not stupid, nor does it matter what he thinks. He is bought and paid for by a consortium of bankers and powerbrokers that are intent on sucking all wealth and power into their maw. He is reading from their script. To think otherwise is naive at best and will make it very likely that you wind up in the poor house.

Wed, 06/22/2011 - 22:56 | 1393729 honestann
honestann's picture

Exactly.  The world today is dominated by:

predators DBA government
predators DBA corporations
predators DBA central banks

Everything those predators say is a lie - pure propaganda.

Wed, 06/22/2011 - 21:47 | 1393656 honestann
honestann's picture

Gads, how wonderful to listen to someone who has a brain... and values honesty!  The experience is so different from listening to 99.9999% of people talk.  Like having a perpetual scorpion stinger pulled out of our brains.

Wed, 06/22/2011 - 21:59 | 1393666 delacroix
delacroix's picture

.

Wed, 06/22/2011 - 22:13 | 1393669 cranky-old-geezer
cranky-old-geezer's picture

Why do so many people (including many here on ZH) dance around the fact that Bernokio's #1 job is keep money flowing to Wall Street and his #2 job is keep money flowing to the federal government?

When the economy is good investors keep money flowing to Wall Street and taxes keep money flowing to the federal government.

When the economy collapses, taxes and investing drop off.  Bernokio must crank up the presses and print money to keep Wall Street and the federal government going. 

Of course this debases the dollar causing prices to rise, something Bernokio refuses to mention or acknowledge.

Bernokio knows exactly why the economy isn't growing, but he doesn't care, it's not part of his job. 

Full employment and stable prices?  That's the Fed's purpose by law? 

Bullshit.  The Fed has never done that. 

Here is what the Fed will do going forward:

(1) Keep printing money and giving it to Wall Street, in some way shape or form.

(2) Keep printing money and giving it to the federal government, in some way shape or form.

Wall Street and the federal government have destroyed the economy ...deliberately... and it's not coming back.

Therefore monetary inflation, currency debasement, and rising prices are America's future. There's no way around it. 

Wed, 06/22/2011 - 22:14 | 1393683 PulauHantu29
PulauHantu29's picture

Slower growth, less confidence in the dollar, higher gold prices, lots of money printing, unsound stock price rises….yep, that’s about right.

Savers are screwed. The Fed has created a new American---- “ The Frugal Fool.”

We will have a QE3. They need more Bank Bonuses.

…and Bankers set a new record for Sky-High Bonuses…with the $700 Billion Sec of the Treasurer Hank Paulson  forced thru Congress.

 It’s all BOOYAAH!, ain’t it?

Listen to Paul Kandowski's Double Talk and excuses--- it's laughable!

Wed, 06/22/2011 - 22:20 | 1393687 blindman
blindman's picture


http://www.zerohedge.com/article/which-way-wednesday-waiting-fed
Yard Sale for the Rich
Submitted by ilene on 06/22/2011
.
Which Way Wednesday - Yard Sale for the Rich
By Phil of Phil's Stock World

.."Yes, it's a Republican wet dream and it will be a fun experiment to see if we can truly strip a government down to the singular function of taxing the citizens to give money to banks - consider it a practice run for their vision of the US as soon as they can get a couple of more seats in the Senate and Michelle Bachmann is President. On the condition that the Greek Parliament agrees to sell their people down the river, the EU and the IMF agree to give them MORE MONEY. Well, not GIVE them, of course, they will lend it to them at 5.2% - which is a very nice profit for the lenders and more money than a US 30-year mortgage (but Greece is only given 7.5 years to pay it all back - an impossible task with their debt to GDP ratio). " ..
.
comment: the democrats wet dream is no different.

Wed, 06/22/2011 - 22:21 | 1393688 JW n FL
JW n FL's picture

God Love James Grant!

http://www.grantspub.com/

 

***** "Grant's Interest Rate Observer is an independent, value-oriented and contrary-minded journal of the financial markets. We publish 24 times a year. Our mission is to identify investment opportunities in a range of markets at both extremes of valuation, high and low alike. A typical 12-page issue is likely to contain a long idea, a short idea, a macroeconomic comment and a monetary or credit analysis (and, of course, one of our famous cartoons). Without bragging, we like to think that we are the financial-information medium that least resembles CNBC." *****

 

James Grant and James Turk discuss gold, the Fed and the fiscal situation of the USA

http://www.youtube.com/watch?v=1VcN_Z6L0jM

 

James Grant Wealth Track

http://www.youtube.com/watch?v=dexHf5LdFgA&feature=fvsr

 

Value Investing Conference 2010 (James Grant)

http://www.youtube.com/watch?v=W-uMM0j2LOc

 

Ron Paul's Committee Hearing 3-17-11 Part 1/8 (James Grant 1 of 3 Witnesses)

http://www.youtube.com/watch?v=79yT1zy9pSA

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