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The Bernank Celebrates

Tyler Durden's picture




 

Submitted by James E. Miller of the Ludwig von Mises Institute of Canada

The Bernank Celebrates

 

BernankeSmilingWhen the last helicopter left the Vietnamese city of Saigon, Uncle Sam hung his head in defeat. The commies had won. The billions of dollars spent, lives lost, and damaged prestige were all lasting consequences. The war left a black mark on the U.S. government – though not one big enough to stop armchair generals from war-making in the Middle East decades later.

As one helicopter’s departure symbolized ignominy for a nation, another present-day lift off seemingly has fireworks going off in the background. Ben “helicopter” Bernanke just hosted his last meeting of the Federal Open Market Committee. He will soon bow out of his current position as Chairman of the Federal Reserve. His successor Janet Yellen is set to carry on his torch. The general consensus is she will embrace the very same policies of her predecessor.

For all his hard work, Bernanke is seeing praise from all corners of the media. In The Globe and Mail, business reporter Kevin Carmichael painted the outgoing central bank head a portrait of praise so colorful, Bernanke may as well have had a halo over his bald head. This isn’t the first time the central banker has gotten an abundance of praise. The Atlantic magazine famously declared Bernanke “The Hero” for saving the global economy. Likewise, Time gave him their Person of the Year award for 2009.

The media loves its heroes – especially when they work in the higher echelons of government. Compared to past laurels, Carmichael’s report is slightly less optimistic. Sure, he concedes, Bernanke is renowned for his relative grace under pressure. The question is: what’s the ultimate effect of his drastic actions in the wake of Wall Street’s near-meltdown? Will the economy keep rolling along as the unemployment rate drips lower? Or will the whole thing blow up in Yellen’s face?

Alan Greenspan left his spot at the Fed a veritable mensch. Just a couple years later, the housing bubble he engineered burst like water balloon. Now he spends his days irregularly commenting on the ongoing recovery, convinced that some people still care what he thinks.

Bernanke’s fate is still undecided, though some are ringing the song bell of victory. Richard Grossman, an economist at Wesleyan University, thinks that without Bernanke, “we’d be in a lot of trouble.” According to National Center of Middle Market director Anil Makhija, “[H]istory will always remember that he stood up at a very difficult time.” A majority of academic economists are in agreement: Bernanke used the printing press to keep the global economy afloat in the darkest days of 2008. When he first came to the Fed, the central bank’s balance sheet showed a total of almost $900 billion in assets – no paltry sum. When the Bernank leaves, he leaves behind a balance sheet of over $4 trillion.

For all his skepticism, Carmichael still seems to hold high views of the outgoing Fed chief. As he writes, “creation of money at that scale should have caused all kinds of problems by now: Runaway inflation, asset-price bubbles; name it. But it hasn’t.” The key here is: it hasn’t happened, yet.

The past few years haven’t just seen money creation the likes of which would make the planners in the Weimar Republic jealous. The Bernanke era also saw the mainstream economic profession chastise anyone who thought central bankers might just be clever by half. For Keynesians and statists, temperance is not allowed in the midst of a crisis. Government must act, and act it will.

Anyone who had the audacity to utter sacrilegious lines such as “maybe it isn’t a good idea to create trillions of dollars out of thin air “ was called a Cassandra or worse. Rampant hyperinflation failed to occur. The dollar did not go the way of Zimbabwe. The S&P 500 hit record highs following each bout of money injections. The amount of folks unemployed has dropped (though partially due to discouragement and a shrinking labor force).

With all this partial success and no slip ups, does Carmichael have a point in that Bernanke deserves an ample amount of praise?

Former MSNBC blowhard Keith Olbermann coined a term for this: premature jocularity. Bernanke is not breakdancing in the front lawn of the Federal Reserve building in Washington D.C., but he certainly isn’t displaying the humbleness of someone who’s unsure of their fate in the history books. New York Fed branch President Bill Dudley recently admitted his cohorts “don’t understand fully how large-scale asset purchase programs work to ease financial market conditions.” On the scale of admissions, that one is high-grade plus one. Dudley has operated the most important central bank branch in the country since 2009. The fact that they were, by all means, flying blind is not comforting.

To think that Bernanke’s extreme measures during the financial crisis will quietly slink away without consequence is an act of false comfort. The trillions added to the Fed’s balance sheet are not sitting quietly on the sideline. The dollars are working their way through the country’s largest corporations. Banks are pyramiding credit, creating money ex nihilo. The funds are likely finding their way to the stock market, often times reflective of investment in the capital goods sector. On numerous occasions, Bernanke has bragged about the robustness of Wall Street. Millions of folks might still be out of work but the banker class is living fat and happy. This is a central bank’s version of progress.

In recent months, the Fed has indicated it plans to incrementally scale back its economy-boosting efforts. This will be the final hurrah of Bernanke’s legacy – a calm unwinding of his life’s work. Even now, the delicateness of this plan is starting to show. Stocks are jittery about a Fed pullback. Traders know the free ride must come to an end sometime. The amount of money creation occurring can’t go on forever. Doing so risks a truly inflationary event, with the effervescing dollars threatening to spill over into the larger economy.

In economics the chicken must always come home to roost. Man can only live beyond his means for so long. Bernanke’s reputation hinges upon the market not tanking as his successors close up the spout of gushing currency. The endpoint is coming. When it happens, the house of cards will tumble down. And with it will come the livelihoods and hopes of many. With every boom there is a bust. It’s an immutable fact of government intervention into the economy.

As Bill Bonner writes, articles full of lavishing praise for Bernanke will begin appearing in coming weeks. Writing puff pieces on state bureaucrats is often a high-paying gig. But they all reveal a particular trend: celebrating the wise achievements of someone empowered to govern society. When businessmen are praised in print, their accomplishments are chalked up as minor victories reserved for the few. When the selfless man of charity is given his due, the praise is mild. When a lord of government sees the pages of a major periodical, it’s the kind of brown-nosing that would make a teacher’s pet uncomfortable.

For now, Bernanke will bask in exaltation. But his just deserts are coming. You can bet $4 trillion on it.

 

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Fri, 01/31/2014 - 22:54 | 4390405 Charles Nelson ...
Charles Nelson Reilly's picture

Oh darn, I thought this was another post about a banker offing himself.

Fri, 01/31/2014 - 22:54 | 4390414 National Blessing
National Blessing's picture

Bernanke rocks.  His man-tits and bald head shall be sorely missed.  Word. 

Fri, 01/31/2014 - 23:11 | 4390446 Sterling Rod
Sterling Rod's picture

Speaking of man tits, I just don't see how Yellin will instill any confidence in the markets when it's panic/crunch time.  Can't wait to find out.  Is Monday too soon?

Fri, 01/31/2014 - 23:12 | 4390453 Yen Cross
Yen Cross's picture

  Nice Moniker!

Sat, 02/01/2014 - 06:18 | 4390913 Indian_Goldsmith
Indian_Goldsmith's picture

"The Coming Crash" has to be the most hoped for , anticipated, most forecasted crash of all time... lol

Sat, 02/01/2014 - 07:20 | 4390955 philipat
philipat's picture

Binyamin Shalom (BS) Bernanke. One of the chosen people who all take care of each other on Wall Street and in the "Regulators".

Sat, 02/01/2014 - 11:09 | 4391178 eclectic syncretist
eclectic syncretist's picture

According to my tally he accomplished running up bubbles in not only bonds but also equities, so he leaves with both bonds and equities overbid and being unusually risky investments.  He created a housing bubble that leaves millions of Americans more impoverished and disallusioned than ever.  He not only allowed banks that went broke due to unlawful mortgage lending practices to survive when they were bankrupt, he also actively supported their continuation as zombies through a ZIRP that had previously been shown to be worthless for stimulating economic activity in Japan,  I could go on but the thought of him makes me want to take a dump so I'll cut this short.  Asta la vista baybeeee!

Sat, 02/01/2014 - 12:35 | 4391315 linniepar
linniepar's picture

It's desserts. Unless they meant an arid wasteland...

Sat, 02/01/2014 - 07:19 | 4390957 GetZeeGold
GetZeeGold's picture

 

 

Alan Greenspan owes me some money.......Ben Shalom freakin did it!

Sat, 02/01/2014 - 07:21 | 4390959 philipat
philipat's picture

Greenshpan. Another chosen one. Same issue.

Sat, 02/01/2014 - 07:26 | 4390960 GetZeeGold
GetZeeGold's picture

 

 

The destruction of America will be blamed on the first black President and the first female Fed chairman.

 

The white guys get away with murder........again.

Fri, 01/31/2014 - 23:27 | 4390479 Zero Debt
Zero Debt's picture

Things get easier when you are The Chosen.

Sat, 02/01/2014 - 10:23 | 4391099 DaveyJones
DaveyJones's picture

With every boom there is a bust

 

with every goon there is disgust

Fri, 01/31/2014 - 23:45 | 4390513 KickIce
KickIce's picture

I think they're setting her up to be the hero with a couple of down weeks.  Come Monday she'll get on the tube and anounce QE of 100 billion and it's off again to the races.

Sat, 02/01/2014 - 00:06 | 4390549 Greenskeeper_Carl
Greenskeeper_Carl's picture

Nah, too soon. Probably have a couple meetings where they stick to 65 a month for a little while.

Sat, 02/01/2014 - 12:45 | 4391333 Simplifiedfrisbee
Simplifiedfrisbee's picture

She is not waiting for crunch time sterling. She is going to hold 8 conference meetings a year to guide the herd of panicked investors.

P.S. It has been said before here on ZH- "All the smart people have left."

Sat, 02/01/2014 - 00:00 | 4390535 Mad Mohel
Mad Mohel's picture

One for old times sake, FUCK YOU BERNANK!

Sat, 02/01/2014 - 09:03 | 4391015 mvsjcl
mvsjcl's picture

If some other-worldly alien stumbled on to this planet and read Zerohedge upon landing, it would be convinced that this Bernanke fellow's first name was "Fuck."

Sat, 02/01/2014 - 11:50 | 4391089 Gohn Galt
Gohn Galt's picture

 

 

 

Sat, 02/01/2014 - 09:20 | 4391027 Jannn
Jannn's picture

Chinese Gold Rush Heating Up. SGE withdrawals 216 tons YTD

 

http://www.ingoldwetrust.ch/chinese-gold-rush-heating-up

Fri, 01/31/2014 - 23:14 | 4390440 tom a taxpayer
tom a taxpayer's picture

Ben's weekends: 2006-2013.

Bernanke: Was that good for you?

Wall Street dominatrix: [looks away, pouts]

Bernanke: Didn't you feel my Twist, honey? Didn't I stimulate you?

Wall Street dominatrix: [puts pillow over head]

Bernanke: How can I please you if you don't tell me what I'm doing wrong? Give me a clue.

Wall Street dominatrix: [rolls off bed onto floor]

Bernanke: Was it too little, too late? Did I let you down?

Wall Street dominatrix: [lights cigarette, inhales deeply]

Bernanke: Will you share a puff with me?

Wall Street dominatrix:[stands up, leans over Ben, blows smoke in his face, then pukes on him]

Bernanke: Thank you…now you are communicating…letting your feelings out. I promise to do better next time.

Wall Street dominatrix:[reaches for whip]

 

Fri, 01/31/2014 - 23:12 | 4390450 Yen Cross
Yen Cross's picture

   Spiral/Staircases.

    I got nothing

Fri, 01/31/2014 - 23:19 | 4390463 Dingleberry
Dingleberry's picture

Greenspan got knighted.

What will Ben get?

Fri, 01/31/2014 - 23:42 | 4390509 ILLILLILLI
ILLILLILLI's picture

History will probably fist him...

Sat, 02/01/2014 - 00:49 | 4390608 HardlyZero
HardlyZero's picture

Top-flight bug-out pad.

They will probably hire him to keep him around, so when the time comes to crank up the new laviathan for the next big fiat.  He probably wrote himself into the script.

Fri, 01/31/2014 - 23:23 | 4390471 rational
rational's picture

Zero hedge Cassandra's are always careful to not put a timeframe on their predictions

Fri, 01/31/2014 - 23:43 | 4390511 Atomizer
Atomizer's picture

Yeah, we predicted this ages ago.

The Adventures of Photoguy - Episode 19

http://www.yourepeat.com/watch/?v=Q1KhY-9wwxo

 

Fri, 01/31/2014 - 23:35 | 4390491 Cabreado
Cabreado's picture

"articles full of lavishing praise for Bernanke will begin appearing in coming weeks."

No, I don't think so.

 

"For now, Bernanke will bask in exaltation."

No, I don't think so.

 

I think the author is a few years late on those sentiments.

The authors and punditry need to stay in touch with what's going on.

Fri, 01/31/2014 - 23:37 | 4390493 sangell
sangell's picture

Where a medical doctor to engage in unproven and untested experimental treatments based on nothing but his desire to 'do something' and a couple of years later the patient was found to be suffering from severe side effects from the 'doctor's' experiments you can bet the doctor would find his license to practice and his personal financial situation in great peril. This same legal and professional danger should apply to Central Bankers on an even greater scale. The reckless practice of economics should carry a life without parole term in a Federal Supermax if it goes wrong.

Sat, 02/01/2014 - 00:09 | 4390555 disabledvet
disabledvet's picture

meh. "a lot of things should have gone wrong that didn't." the biggest thing that has gone wrong is pretty much zippo for a recovery.

has the dollar collapsed?
nope.
have treasury yields soared?
nope.
has equities tanked again?
nope.
have real estate prices collapsed only to stay down?
nope.
has inflation run wild?
nope.
has a massive deflation taken hold?
nope.
do we have trillion dollar deficits for as far as the eye can see?
nope.

Should we be doing better?
Yep.
Is Lehman Brothers and Repo 109's Ben Bernanke's fault?
Nope.

I can think of a lot of other things worth blaming here. "There never is just one crime being committed" as they say...nor just one criminal.
I agree "unless and until we get 8 percent economic growth with 2 percent unemployment and de minimus inflation we're just not gonna be happy here."

That's not Ben Bernanke's fault either.
Has Wal Mart said "we're gonna offer a job to everyone on foodstamps"?
Nope.
Will they ever?
We can hope they do.
That certainly would improve their earnings outlook.
Same goes for every other retailer out there I might add.
Ben Bernanke doesn't set the minimum wage...or demand Banks start lending into the biggest energy boom in US history.

It wasn't the Fed that failed in 2008.
It wasn't Wall Street bailing out the Government.
I'm sure the guy grading his Phd only gave him an A-.

If you have a gold standard and all the gold is in the Bank then ultimately the Banker knows where the risk lies.
What does the Government care when it can just print another trillion??
There is nothing Ben Bernanke could have done to change that reality.
He knew his job.
He executed on it.
I do think he got really, really, really, really lucky.

Sat, 02/01/2014 - 00:56 | 4390634 Frank -THE COIN -
Frank -THE COIN -'s picture

........to be continued .

Has not happened, is the first Eye of the Eye Wall Landing.

Lets wait for the Other Side of The Eye Wall to Land. Lets Converse then.

I liked the Information and Logic you Provided.

Sat, 02/01/2014 - 07:30 | 4390963 GetZeeGold
GetZeeGold's picture

 

 

Yet is the key word here.......not YET.

 

It's bubbling a little bit but it hasn't exploded......yet.

Sat, 02/01/2014 - 06:27 | 4390922 North Sea Cowboy
North Sea Cowboy's picture

I was under the impression that inflation calculated the old way was 10% YoY, just because they change the way they calculate the important figures (lie) doesn't make it true. The Bernank has done a good job of bleeding the middle class and fattening the already super rich. And that WAS the Fed.

Sat, 02/01/2014 - 06:28 | 4390923 North Sea Cowboy
North Sea Cowboy's picture

Double post sorry

Sat, 02/01/2014 - 08:04 | 4390981 new game
new game's picture

4 trillion spread around the globe is really not a problem.  when this 4 trillion starts to move to the same destinations, as seen this week in the fx markets, then we start to see misallocations and flights of insecure money in play. if it ends up back here, at its origin, then this mistro will have orchestrated wienar two...

Sat, 02/01/2014 - 00:01 | 4390539 Yes_Questions
Yes_Questions's picture
Good bye.  thanks for the memories. you shit fuck, you. you'll be spared the lamppost, but not the view.
Sat, 02/01/2014 - 00:06 | 4390548 bigrooster
bigrooster's picture

One final time...FUCK you BERNANKE!

Sat, 02/01/2014 - 00:31 | 4390587 Caviar Emptor
Caviar Emptor's picture

Reagan proved that deficits don't matter
Obama proved that debt doesn't either
Bernank proved that currency matters less and less and less from printing more and more and more

Sat, 02/01/2014 - 00:32 | 4390590 Critical Path
Critical Path's picture

Financial War Criminal... people generations from now will judge him for that, and the population as submissive and ignorant for letting it happen.

Sat, 02/01/2014 - 00:34 | 4390597 QE49er
QE49er's picture

Return the favor, Ctrl-P Bernankes pic, place on bottom of Bird Cage.

Sat, 02/01/2014 - 00:50 | 4390603 Yen Cross
Yen Cross's picture

   I'm eternally grateful for the comments on this thread. Keep being honest!

Sat, 02/01/2014 - 00:52 | 4390617 Yes_Questions
Yes_Questions's picture

 

 

you're not alone

Sat, 02/01/2014 - 01:31 | 4390687 TheCosmicTaco
TheCosmicTaco's picture

So whose dick are the banksters gonna suck now that Yellen is holding the fort? Or are they going to have to learn some new skills?

Sat, 02/01/2014 - 02:04 | 4390716 Yen Cross
Yen Cross's picture

 Once upon a time I watched "tide charts". so that I could pass over an certain out-crop.

     You people are whimps/  Mountain People have zero concept of coastal living. bLASpHEMY DOES EXIST<

Sat, 02/01/2014 - 02:06 | 4390743 hungrydweller
hungrydweller's picture

Olberman is a self-indulgent asshole.

Sat, 02/01/2014 - 02:31 | 4390769 prains
prains's picture

Ben, meet 50' ditch, pull over, get out !! NOW

Sat, 02/01/2014 - 03:42 | 4390837 q99x2
q99x2's picture

Fuck Bernanke, Fuck the Fed and Fuck you too Yellen.

I blame you all for FaceBook and Internet speed 1/45th that of Singapore's.

Sat, 02/01/2014 - 03:46 | 4390839 Yen Cross
Yen Cross's picture

 fUCK cHAIRSATAN AND HIS HORDE ! eND OFsTORY.

Sat, 02/01/2014 - 04:05 | 4390850 valkir
valkir's picture

I will miss FYB in ZH posts.Noone here try to fuck Yellen i guess...

Sat, 02/01/2014 - 04:35 | 4390857 Postkey
Postkey's picture

Bernanke helped to avoid a 'Great Depression'?

 

In the USA, in the 'Great Depression' aggregate demand fell and, in the 1930's, GDP declined by 28%. 
In the USA, in the 'Great Recession', aggregate demand fell by a greater amount than it had in the 'Great Depression' but GDP declined by 'only' 5%.
Without governments increasing their expenditures and 'loose' monetary policy, then GDP could have fallen by an amount greater than 28%?
http://www.scribd.com/doc/116293469/Keen-2012-Fiscal-Cliff-Lessons-From-1930-s

 

Sat, 02/01/2014 - 08:42 | 4391007 GetZeeGold
GetZeeGold's picture

 

 

Bread lines have been replaced with EBT cards......we call it progress.

Sat, 02/01/2014 - 10:28 | 4391107 kenezen
kenezen's picture

Actually this is a great depression. It's just that the federal government is misdirecting and spending trillions to sustain more than the last depression!

It's not just the $ 17 trillion of debt, it's the Trillions yet discovered. remember Ron Paul's mandate of a Fed Audit that found  $Trillions had been shipped overseas to stabilize Europe.

How about Mr Bernanke's own internal hedge-fund called the Fed Portfolio containing god know what kind of mortgage portfolios and the losses passed on or, still embedded. This is all historic. How about the fact Banks with government permission put trillions of Derivative product into FDIC which was for Consumer deposit protection?  NOW, the derivatives that caused this crash are legally protected by the good faith of our government. 

"The Top10%" in our economy invested in the International S&P did good. If they were leveraged as most funds are they did better. But what about the rest? The Republican and Democrat Parties share in this disaster to its citizens

The Government has more recently turned completely socialistic to print money and doles out sustenance to a record growing population of takers, while lying like a confidence man that the unemployment is going down! It Is Not!    Between "You can Keep Your old Insurance" and The Unemployment is Below 6%; the latter is by far the most egregious lie! That number does not report the fast growing millions that give up! There are still in large inner cities of 50% unemployment of minority youth! Nationwide Minority youth is by questionable government numbers at 28%. White youth is currently 18%. Plus, This President has shamelessly allowed Social Security to allow sadness and mental state to become ways to draw from SS Disability. Is that to make numbers look better?

WE are the most tracked and watched society on Earth!! Both parties have allowed this! We have no privacy in direct violation of our Constitution! General Warrants are specifically Unconstitutional as is a FISA court. I did not say that, President Madison did! Our Supreme Court as well said it in 1967.

Republicans are stupid!  We have a current sitting President that set up his own 501(c)4 "OFA" took in donations from unknown sources all over the world rumored to be in the Billions of dollars in closed books while allowing IRS to stop small Republican minded groups with IRS harassment. His OFA approval reportedly took less than thirty days.  Why didn't the Republican Party start their own 501(c)4 immediately in contest? ??? Stupid!

If we are not becoming Socialistic "I will do everything I can without Congress"! what are we becoming? Where's our heavy industry that older generations depended upon and grew our fast disappearing middle class gone now because of Federal Government stupidity since the late 70's. hedgemastermb.blogspot.com (Look at "America's Economic Future")

Instead we have growing government approval for surveillance drones over our homes! Beria, the Soviet war criminal and Secret Service torturer, was once questioned about his tactics of citizen surveillance. He is said to have replied If we know where they go and who they associate with, we control them. Beria relied on neighbor telling about others for favors of food or money. We are much more efficient under both republican and now democrat leadership in our historic and illegal tracking of citizens! 

 

Sat, 02/01/2014 - 10:41 | 4391127 kenezen
kenezen's picture

Good post!

It's possible, but the fact that "American Comapnies are far more diverse in locations internationally. And, our primary export Agriculture and Energy were not really as tranportable (Food) and far smaller amounts of (various fuels ) may have played a part on GDP    

Sat, 02/01/2014 - 05:45 | 4390894 TheCosmicTaco
TheCosmicTaco's picture

Alan Greenspan, the Grand Bubblemeister El Supremo, was always going to be a hard act to follow, but I think his disciple Ben "Bubbles" Bernanke, has actually gone and pulled it off.

Asia ex-Japan and most emerging markets have been booming like mad lately, and their coming bust, especially of Ponzi-finance poster-boy China, is gonna be truly epic. Grab the popcorn...

Sat, 02/01/2014 - 05:57 | 4390900 Disenchanted
Disenchanted's picture

Did the door hit him in the ass?

Sat, 02/01/2014 - 06:52 | 4390935 Cattender
Cattender's picture

Bye Ben.. thanks for all the printing!

Sat, 02/01/2014 - 07:11 | 4390950 Manipuflation
Manipuflation's picture

Genuflecting to ZeroHedge, I recall a statement made about Bernanke's titanium zero key some years back.  A titanium zero key?  Now that was funny.

Sat, 02/01/2014 - 08:09 | 4390985 The.Harmless.Who
The.Harmless.Who's picture

 

Yes, I'm with my brothers and sisters... fuck bernanke and yellen and fischer and the rest etc....

 

But, can we have a little debate as to what we expect to happen and within timeframes (if possible)? 

 

I'm into hard rather than paper assets, and have seen my gold holdings get smashed.  I'm eating veggies now, and holding back any form of spending until gold starts to rise again - i don't call it living - i feel like a modern day fagan sometimes... 

 

Now, I have a couple of questions on the the QE situation.... 

 

The FED's balance sheet will expand to around $5Tn by the end of 2014 right? (it is feasible)

 

So..... 

 

What will the Fed then do with this?  as I understand it, the actual money printing hasn't taken place in full.  Rather, inflation has been exported via the carry-trade.  

 

Monitization of the debt - that's the big issue right?  

 

What happens if the FED cancels some of its balance sheet? 

 

Can some of the clever folks on here give us some answers?  

 

Cheers!

 

Sat, 02/01/2014 - 08:41 | 4391003 new game
new game's picture

only a manipulors mind can answer that question. but simply put, think like a lawyer, who has full control of law, enforcement and the jail to get your answer...

cue and clues: myra, bail in history, and supreme court desicions recentlyl, executive order(s) and judge appointees.

Sat, 02/01/2014 - 08:49 | 4391010 GetZeeGold
GetZeeGold's picture

 

 

It's a game of confidence.....no one can predict it.

 

We are seeing the clues for sure.....when/if it happens is anyones guess. Most people don't realize how close we can to it in 2008.

Sat, 02/01/2014 - 10:30 | 4391112 The.Harmless.Who
The.Harmless.Who's picture

 

 

OK, so the answers to my post....

 

"only manipulators can answer" 

 

"it's a game of confidence ... no one can predict it"

 

 

............

 

This is a far cry from the ZH line of "destroy the FED", "fuck Bernanke", "the end is coming", "all is evil" and terrible. 

 

I'm just looking to understand what the hell is going on here - but most of the posts are "fuck you bernanke" and "buy gold" - what's happening to the readership of ZH???????

 

Disclosure - Here's my situation, I'm in the UK, which is the ultimate whore to central bankers and other banksters:

 

*  I've noticed inflation - but the mainstream media, including that MI6 invention known as the BBC telling me that there's no inflation... whatever, foods and household items have become smaller (my 1Lt Olive Oil is now 750ml Olive Oil is one in a 1000 example). 

 

* Taxes have gone up (including council taxes - but my rubbish collection is now fortnightly when it was weekly - the result? fly-tipping and more rubbish). 

 

* Cost of living through motoring is also on the up - all round.

 

* Savings mean nothing, so I invested in Gold (using my savings), but that fell to pieces (perhaps to get people to understand that savings is a no-no, so spend spend spend).

 

* Interest rates falling has helped me transfer Credit Card balances at zero percent - which helped me pay them off without interest - that's a plus for me. I hate debt (but like many people, realised the evils of credit late in the day). 

 

* My home which I purchased around 10 years ago, has gone up in value (if that makes sense), but also, the mortgage rate is VERY low, so I'm paying less interest, and more debt / capital. 

 

I feel the time-bomb coming, but I felt the same way at the start of 2011 and lost money shorting the market, so I think we are damned either way. 

 

If there's a revolution, corruption must be purged, otherwise it would be a wasted oppertunity.  But I don't think there's a revolution coming - too many people like reality tv etc.... 

 

p.s. When CNBC's Rick Santelli gives ZH a plug and vice versa I'm not sure I should be thrilled either - sure, he talks sense sometimes, but there's too much neo-con / neo-liberal market talk.  No empathy for the poor.  And for those that love de-regulation: A word of caution, our UK's food standards agency started to deregulate, and lots of horse meat, pink-slime et al (maybe human remains?) were found in our beef stocks. 

 

Government isn't bad by default - it depends on the Government you have.  

 

Some branches that protect people from falling victim to scams are good.  Some branches that advocate foreign wars, and spying on citizens are bad.  

 

That doesn't mean that ALL Governments should be ended surely? Just the bad parts. That's what I'd fight for. 

 

Anyway, I wish you all the best of luck. 

 

 

 

Sat, 02/01/2014 - 08:11 | 4390988 Kilgore Trout
Kilgore Trout's picture

Bernanke's as smug as can be,

He knows that he's made history

With all of his pimping,

And incessant printing,

He's left a corrupt legacy.

Sat, 02/01/2014 - 08:22 | 4390993 Budd aka Sidewinder
Budd aka Sidewinder's picture

Bernanke is gone!

Do you think he left the Fed now because his turn was up?  He knows exactly what is about to happen.

When the hangings start and the mob rushes his house, they will find that he exists merely in cardboard cutout form a la 'Home Alone'

He is in a mansion in Tel Aviv sipping Manischewitz and being feted at every occasion for so capably enriching the others in his homeowner's association for doing absolutely nothing.

Shalom, Ben! Shalom

Sat, 02/01/2014 - 09:14 | 4391018 AdvancingTime
AdvancingTime's picture

Bernanke has taken the wise exit strategy that will help preserve his legacy in history as well as help insulate him from criticism. All the recent speculation over the President's second term and how he will be remembered has called attention to the importance of "legacy" to many in high office and people filled with feelings of self-importance. So what becomes the logical way forward? As Bernanke neared the end of his term many of us thought this would be a "crazy good time" to leave. I suggested he continued for the last several months with more of the same, supporting the market that has supported him, right or wrong.

If the goal is to continue until the unemployment problem abates, the Fed will never stop or dial back on QE, the economy is totally dependent on the props and cheap easy money from the Fed. Thus the only way out of the trap he has built is to hand off the office and program to someone else then to run or distance himself from the blow-back and negative implications of his disastrous policies letting the blame fall on those that follow. The Fed is in a corner, with higher interest, mortgage rates will rise. Super low interest rates have discouraged savings and encouraged people to take on more risk. This does not lead to a healthy economy, but rather a story that will end in tears and regrets. More on the wisdom of exiting now in the post below,

http://brucewilds.blogspot.com/2013/05/bernankes-best-qe-exit-strategy.html

Sat, 02/01/2014 - 10:02 | 4391076 J J Pettigrew
J J Pettigrew's picture

Ben's exit does not "insulate" him one bit....

he is now buried in the cement of history....he can not alter what he has done

or spin it.  He is just another Goldman bitch like Greenspan.

Sat, 02/01/2014 - 10:01 | 4391074 J J Pettigrew
J J Pettigrew's picture

I'll miss Ben's quivering voice.....quivering as if he knew how precarious

and misguided his actions were...

exit strategy?  bye Ben....go sit with Hank Paulson in some unknown 5 star hotel bar and

reminisce

Sat, 02/01/2014 - 10:18 | 4391094 NoWayJose
NoWayJose's picture

I give Ben praise for his initial handling of the market collapse of 2008/2009. That was a scary time. I condemn him for everything after that, as his actions actually hurt any recovery, crushed savers, and set up a collapse far greater in the future.

Sat, 02/01/2014 - 10:32 | 4391114 MarcusAurelius
MarcusAurelius's picture

I still have no idea why we lament this guy so much when in essence most of the problems that are now plaguing the western world financial system have been 40 years in the making. He simply was left with having to clean up after the party. Not what anyone would want to do in my opinion with the puke, left over food and filthy toilets littering the place. (Ever look at a pub after a big piss hop where there has been a lot of drunken fools partying till the wee hours of the morning)? Not a pretty sight. 

   When you hook a society on cheap or free booze (like any other drug) it is not so easy to say, "last call for alcohol". Anyone who knows about addictions can attest to this. That's when you get your unpredictable behavior and problems. Kind of like we have now wouldn't you say? 

     The guy ventured down the only path he really had. I am not a big fan of any real form of economics as they all have their inherant flaws. The years of waste and over partying while the rest of the world watched in amazement at the consumption going on always comes back to bite you in the ass. I notice with most people that they want change until it effects their way of life. Then well.....perhaps the change wasn't a good thing after all. The chips don't usually fall where people think and the consequences of doing nothing at all might of been a whole lot worse than people can even possibly understand. Oh....right....the Iceland example. Give me a break!

      The society that we have now is a whole hell of a lot different than the one that survived the "great depression". I bid Ben farewell but not in mock judgement, rather in praise for playing the only hand that he was left to play. As far as I am concerned he played it the very best way he could. As good as anyone esle could play it given the same circumstances and cards.

Think about it.  

Sat, 02/01/2014 - 11:08 | 4391179 shovelhead
shovelhead's picture

I agree.

It was much better to taxpayer fund and insulate banks from their criminal fraud while putting Main St. in a coma while reducing it's life support to bare minimum.

Duct tape and bailing wire is always preferable over a well engineered repair job that replaces the broken parts.

Bernnke...Duct tape King of the Fed.

The Fed IS the broken part so one can hardly blame Bernanke for not eliminating himself.

Ain't natural.

Sat, 02/01/2014 - 12:46 | 4391337 TrustWho
TrustWho's picture

First, the system is still very sick. He has successfully kicked the can down the road as he has successfully created a facade over the deeply buried Phoenix. The Phoenix’s impact has likely been changed, but the impact from its eventual emergence will be felt.

Second, no high level corporate or political figure has gone to jail for the obvious crimes of greedy fraud that played an important role in the financial collapse. This injustice corrupts the American judicial system and destroys peoples' faith in the blind lady justice myth. America may never recover.

Third, how many laws did the Fed break? Bernanke had many options in 2008/09 crisis. At the time and still today, I believe the Fed should have nationalized the major banks and any institution that was a likely domino through the FDIC. The Fed would have had the paper work to throw the fraudsters in jail. He could have made the innocent creditors whole, netted out the hedges and wiped out the guilty. Most importantly, the banks could have been sold back to the public market with a healthy balance sheet and NEW management team. If you listen to the arrogant Ray Dalio speak, is this not the point of QE? Or to magically replace the dollars that were smoked to heaven with newly printed dollars to the innocently harmed.

Fourth, Bernanke actions created worst trickle down process ever invented by an individual and Obama used this to get re-elected. Obama may be a good person, but he has no clue how to be an effective President that can lead the USA. The people most harmed were fooled and voted for Obama to continue their beatings.

I could continue, but who cares? Yes, a small percentage of wealthier individuals benefitted from the Bernanke Put. Of course, only a few of these wealthier individuals will maintain their wealth by being the first to the exits. For these few well connected people, what is the cost to society from Bernanke's Put? The foundation of American society has been shattered, because the rebar principles have completely been oxidized by rust.  The 75 year oxidizing process could have been remedied by allowing the Phoenix to rise. Ben Bernanke has unleashed an evil that will have a lasting impact in his effort to protect the wealthy. How can you call his tenure as Fed Chairman anything other than a complete failure? As always, time will tell. 

 

Sat, 02/01/2014 - 10:54 | 4391157 cassotto
cassotto's picture

to all his critics: each one of you would have done a much worse job.

many of you hate him cause you lost money fighting the FED.

the FED made it clear in every statement: do not short US equities until QE ends.

by tapering in steps they even made it possible to time your shorts.

of course the FED deliberately drove equity prices up, but without the FED those will be manipulated too.

as a trader you should be able to adjust to any market condition, else your just a one trick pony.

Sat, 02/01/2014 - 11:40 | 4391208 shovelhead
shovelhead's picture

How refreshing.

A paean to enlightened self interest bereft of that tiresome moralizing that we get so used to here at ZH.

It takes a certain kind of man who is comfortable strolling through the graveyard while the corpses are still lying about unshriven and unburied.

No whistling past the graveyard Johnny are you, Sir.

Sat, 02/01/2014 - 12:40 | 4391321 alangreedspank
alangreedspank's picture

I chastise him for turning a severe correction into what will be a multi generation stagnation of moribund growth that the next generations will have to suffer through by the obsessive massaging of the yield curve.

Not because I lost or not money trading. It's obvious the only game in town is daytrading and the basics of it are independant of who's heading the Fed.

Sat, 02/01/2014 - 11:44 | 4391220 Híppos Purrós
Híppos Purrós's picture

HeadsUp, Tylers... WilliamBanzai7, et al...

As it happens it wasn't much of celebration at all...

 

[WAPO] -Bernanke: I saved the economy and all I got was this custom baseball card

..."It started with a dinner Tuesday night with the central bank's top officials from across the country, who were gathered in Washington for their regular policy-setting meeting. Bernanke's wife, Anna, and former Fed vice chairman Don Kohn also attended. The event was held in the Fed dining room – the same one used for press conferences – and featured a menu of crab cakes, lentil soup, salad and a gluten-free dessert. One of the highlights of the evening were the remarks by incoming Fed Chair Janet Yellen, who jokingly recounted a falling asleep while watching Star Wars and dreaming of Bernanke as Obi-Wan Kenobi and herself as Luke Skywalker.

A larger baseball-themed farewell with Fed staff was held on Thursday in the atrium. Hundreds of people crowded the marbled staircase and hallways of the building. There was popcorn, Crackerjacks and ice cream – but sadly no beer. And they passed around this custom baseball card with Bernanke's batting record:"...

 

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/31/update-i-save...

 

Sat, 02/01/2014 - 13:23 | 4391261 besnook
besnook's picture

within a year of every new fed chairman appointment since 1971 there has been economic catastrophe. that is probably the most telling correlation about the near future. yellen will oversee the reset.

Sat, 02/01/2014 - 15:29 | 4391621 secured_party-c...
secured_party-creditor's picture

Very intereting statistics... Probably to protect the "image" from a tarnished administration.... In this model, every Federal Reserve looks like they overcame some disaster from the onset to "save the day" and go out with honors like some crazy war general.... WTF.. Our system is so screwed, no wonder all the money is leaving America.. Even Hollywood makes most of thier movies overseas now...

Sat, 02/01/2014 - 12:35 | 4391313 alangreedspank
alangreedspank's picture

Bernanke basically pulled a Japan: spread a recession on many decades instead of taking it on the chin at once. Not very hard to do, issue lots of eCurrency and its bound to make its way in places that would have repriced otherwise, claim victory.

Sat, 02/01/2014 - 13:50 | 4391442 Music101
Music101's picture

We probably all know that KARL DENNINGER has written about this at length, so maybe you should all have a look at his stock picks in the video below -- KARL DENNINGER STOCK PICKS -- MUST SEE!!

https://www.youtube.com/watch?v=XqWIS0O2gIk

Sat, 02/01/2014 - 17:18 | 4391806 moneybots
moneybots's picture

Richard Grossman, an economist at Wesleyan University, thinks that without Bernanke, “we’d be in a lot of trouble.”

 

We ARE in a lot of trouble.  An illusion is not reality.

Sun, 02/02/2014 - 16:11 | 4391908 earleflorida
earleflorida's picture

'What the FRBsystem tried to do, and what it Failed to Un?do-- because this `Tyme is Different?`'

1)    "The Plaza Accord" ~ 27yrs. ago on Sept.22,1985   http://en.wikipedia.org/wiki/Plaza_Accord     

2a)   'This Plaza Accord destroyed Japan's expansion as a global economy, which was on the cusp of becoming the world's  next hegemonic powerhouse?'

2b)   "Emerging markets at risk from Gigantic Bubble"   Aug. 8,2010   by Peter Tasker   {(Note1: * Overconfidence in China [** one of many reasons China doesn't want to appreciate the renminbi/yuan] is reminiscent of 1980s Japan)(note2:: By orchestrating a massive appreciation of the yen in the mid-80s the US condemned Japan to decades of stagflation and ended the challenge to its own economic hegemony. Effectively, Japan was forced to commit financial hari-kiri-- indeed, to know ones adversaries weaknesses and exploit them?')}     http://www.ft.com/intl/cms/s/0/56094c4e-dabd-11df-81b0-00144feabdc0.html#2xzz2s5mP5mRR

2c)   Summary [KEY?]::  Shifting from a Export economy to a Consumption economy and that a stronger yen (?renminbi/yuan?) would raise the purchasing power of the household was where the Japanese went off the tracks!

3)    'Pre-Unification of Germany?'     {How? When? Where?!? and Why???}  A peacetime 'Marshall Plan', for the Eastern European Nations?     http://en.wikipedia.org/wiki/Marshall_Plan

4)    'If the FRBsystem really wanted to sabotage the rise of China through QEinfinity, the best way to do so would to facilitate a giant asset bubble in ***{(just like Japan?-- but, did the Chinese learn from Japan's one critical mistake... turning to a consumption economy?)(housing bubbles as far as the eyes can see!)} China! Which by-the-way is very much on its way?!? These circumstances  would probably be best accomplished by leaving the renminbi/yuan where it is, thus locking high-growth China into the, 'Super-Low-Interest' appropriated for the weak US economy. Forcing savers out of cash and into the housing market (which is at full throttle today), and ensure credit grows much more than GDP (full blossom, but with the bloom certainly off the rose!)--the  perfect mix for Bubble Trouble!'          (sic excerpts)

5)   "Consumption: 'China's Economy over the last Ten Years`"    Sept.19,2012 by Peter Ross     (Note: China has the fastest growth of consumption in the world... past and present in the prior decade!)             http://www.chinatoday.com.cn/english/economy/2012-09/19/content_485969.htm

6a)      Comparison charts & stats::  "Chinese Yuan to US Exchange Graph"   Note: ~1993-Present     http://www.forecast-chart.com/exchange-chinese-yuan.html             http://www.forecast-chart.com/usd-chinese-yuan.html

6b)      "Comp's & Stats:::  "Japanese Yen to US Dallar Exchange Graph"   (historic Yen rate 1971- 2012)            http://www.forecast-chart.com/exchange-japanese-yen.html             http://www.forecast-chart.com/usd-japanese-yen.html

Summary:  The authors of the various articles have history on their side, but in my own interpretation reading between the lines, is... that the Quantitative (QE infinity) Easing motives were not to inforce our's and/or europes economies but to deliberately crush the Chinese economy from taking the Hegemonic Prize they seek!  Thusly, the USSAs strenghtening the World's Central Bank of Central Banks ie.,"Basel/ BIS & FRBsystem" in unison with the linear structured, 'Old-World Order', integrated seamlessly into the 'New World `Obelisk Fiat`Order'?!?    JMO 

Ps. If and only China has paid enough attention to the arrogance of the Japanese in which I personally believe they've (Chinese) paid much attention, even with the FRBsystem giving them a direct-bid-line to our treasury auctions they seem to never shed their methodical and pragmatic ways.

Final Analysis:  The USSA is toast! Why? Once the EM's unravel and the CDS's start falling from the rehypo-debt ceiling the European's will undress us, PERIOD!!    Again JMO

thankyou tyler

Ps2)   The Bernank has destroyed america, for whatever his delusions-of-grandeur were or was? predicated upon?

Clarifications (late additions) noted?::   "Americans Bruised by European debt crisis"      10/29/12  by Sheyna Steiner  (European Debt Crisis: Impact on the US)       http://finance.yahoo.com/news/americans-bruised-european-debt-crisis-070119685.html         ****collectively the 17 euro-area countries equals approx. $13tn/ GDP... 2nd only to the ~$15tn/GDP of the USSAs [data: IMF 2011]

Sun, 02/02/2014 - 21:35 | 4394558 earleflorida
earleflorida's picture

"Financial Armageddon:  A Pyrrhic victory!?!"

Sat, 02/01/2014 - 23:22 | 4392718 syntaxterror
syntaxterror's picture

Between this douche and foodstamp, they've spent around $12 trillion. Fuck off and die assholes.

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