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Bernanke The Sophist: The Deception Behind QE

Tyler Durden's picture




 

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Bernanke's legacy: a deceptive case for a failed policy.

Sophistry: the use of fallacious arguments, especially with the intention of deceiving. The Federal Reserve's core policy of quantitative easing (QE) is based on a deceptive but appealing argument voiced by former Fed Chair Ben Bernanke.

Longtime correspondent Harun I. explains the fallacy of Bernanke's case for QE.

 


Most times I leave people to their flawed ideas because in most cases, it is not what you believe that is most important but that you live in congruence with your beliefs. But this came up in conversation the other day, and since this belief is affecting us all, it must be examined.

Bernanke in 2001:

"The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost [emphasis is mine]. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.”

I pointed out what should have been obvious: There is nothing limitless and therefore nothing can be made in unlimited quantity. And since whatever material is being used in the conversion is not unlimited, it is now subject to the scarcity laws of supply and demand. For example, if lead was successfully converted to gold, lead, which exists in limited quantities will appreciate in value. Lead would have to supply the demand for its current use and now the conversion of gold which still has many important uses. Effectively, lead becomes the new money.

I went on: Didn’t we learn this lesson from ethanol? Corn is something we consume or use as feed for livestock. The second we decided to divert that output to our gas tank, its price appreciated.

In the next paragraph of Bernanke the Sophist’s speech, I will interject some clarification (in the interest of calling a thing what it is).

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press [deficit spending, borrowing money at interest from banks it is supposed to regulate] (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars [destroy the value of labor: force the same expenditure of calories for fewer calories in return] as it wishes at essentially no cost.

By increasing the number of U.S. dollars in circulation [by forcing people to work the same or harder for less], or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services [he is kind enough to state it plainly right here: reduce the value of labor (energy expended)], which is equivalent to raising the prices in dollars of those goods and services [forcing people to work the same or harder for less].

We conclude that, under a paper-money system, a determined government can always generate higher spending [force people to work the same or harder for less by deficit spending, borrowing money at interest (which becomes a perpetual debt) from banks it is supposed to regulate] and hence positive inflation.

The implied conclusion is that to increase productivity (have stable prices and full employment) we must decrease the ability to buy products. Or, to have a normal and vibrant economy we must decrease living standards. Great. We can all be chuffed to bits that he’s cleared that up. In 2001, Bernanke the Sophist explicitly laid out the blueprint for too many promises. The Bail-In was already stated as policy over a decade ago. Why is everyone so surprised about the growth the wealth gap?

Why is there so much angst directed at the wealthy? It is government policy to reduce purchasing power.

If I am hired as a fiduciary, my first duty to protect my client’s wealth, to make sure his $50 million buys as much ten years from now as it does today. He doesn’t really care about becoming more wealthy. Governments hate this because they need that purchasing power. In general, the poor and middle class have no means to escape government’s exponentially growing need for revenue, nor do they understand the subtleties with which government bleeds them of their purchasing power.

As I have stated, the effects of Bernanke’s (the Fed) (and government’s) rather specious reasoning are already causing the disintegration of this “system”. It never mattered what pill was chosen (green or red). Illusions, the red pill, are necessarily ephemeral. We can never get around the physical laws of nature that bind human activity and therefore bind human interaction.

 


Thank you, Harun, for this explanation of Bernanke's legacy: a deceptive case for a failed policy.

 

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Fri, 05/16/2014 - 09:42 | 4766165 LawsofPhysics
LawsofPhysics's picture

There are several reasons why the people's money supply should be increased.  However since the money is the people's doing so should 1) be equitable and 2) not cost the people anything.

 

QE is theft, but ZIRP/NIRP is far more destructive and evil.

 

 

Fri, 05/16/2014 - 09:48 | 4766216 TeamDepends
TeamDepends's picture

The further a society drifts from the truth, the more it will hate those who speak it.

George Orwell

Fri, 05/16/2014 - 09:53 | 4766236 lordylord
lordylord's picture

Inflation is the most devious tax of all.  -Ron Paul

Fri, 05/16/2014 - 10:01 | 4766280 The Proletariat
The Proletariat's picture

"Fuck You Benanke" Zero Hedge readers 2009 to present

Fri, 05/16/2014 - 10:23 | 4766368 OC Sure
OC Sure's picture

I wrote this in another thread but it is applicable here too (everywhere, in fact). The sophistry will continue so long as the terms are accepted.

By using the terms of tyranny, you are promoting the cause of tyranny. 

Terms of tyranny are lies; that is the words and concepts they use are false because they are not affirmed by reality, they are denied by reality.

The purpose of spoonfeeding us  the drivel and drool of modern economics for three generations is to confuse our minds as the means to control our bodies.

Here are the lies which your article implicitly accepts and thereby serves to promote.

1. There is very little money left in the system, instead we are dealing with counterfeit.

The paper of the central banks is not money; it is only the "ghost of money," imitation, forgery; counterfeit.

The paper does not represent a measure of exhange. Money measures the work that a person does to produce something. Counterfeit measures that a person has done no work because they have not produced a thing. The paper (or exponentially multiplied digital blips) you call money does not measure an exchange of something for something; it measures an exchange of  something for nothing.

2. Inflation is not an expanding of the monetary base; it is the expanding of the counterfeiting base. This is why inflation is theft. The thief has pointed a gun at you and demanded that you accept their nothing (counterfeit) in exchange for your something (money); an exchange of their refusal to work for the best work you can do. When do you notice you've been had but had so skillfully by such an adept thief that you still can't identify it? You notice it when your purchasing power drops. What are the things that you would have done or purchased had your power to purchase not been stolen from you?

3. Employment is only employment if you are trading your work for the work done by others. If you are exchanging your best efforts with someone who makes no effort at all then you are not employed but instead you are enslaved. It is not the monthly Employment report; it is the monthly Enslavement report.

Fri, 05/16/2014 - 14:49 | 4767293 andy_pandy
andy_pandy's picture

better to have loved than not at all; right on; what pisses me off is is trading the (nothing) job  value  for the nothing money i get in return where the job is inceasingly worth less than nothing which means  working harder for the same nothing!

thats e2 conomics (#emotional economics) 

Fri, 05/16/2014 - 15:33 | 4767451 OC Sure
OC Sure's picture

Because your power to purchase is being stolen from you it means that you have to run faster to fall behind slower. Enjoy!

Fri, 05/16/2014 - 10:02 | 4766284 Four chan
Four chan's picture

silently stealing by dilution is their mandate. the result to create debt slaves of all of us, and to capture all assets through boom and bust it creates.  one day it may be called treason.

Fri, 05/16/2014 - 10:08 | 4766304 Rubicon
Rubicon's picture

Nice rack

Fri, 05/16/2014 - 11:14 | 4766598 Al Gorerhythm
Al Gorerhythm's picture

Agreed, until you see what she did to them. I thought she was hanging in inverta-boots to start with or at the apex of a jump. One loopy woman when you read her bio though, bless her. 

Fri, 05/16/2014 - 10:19 | 4766348 Dr. Engali
Dr. Engali's picture

I just shipped my pants. ~ some guy on a K-Mart commercial.

Fri, 05/16/2014 - 09:49 | 4766223 RevRex
RevRex's picture

Bernanke's Policies were a whopping suckcess, they accomplished exactly what they were  designed to do.....The bankster elite made trillions, and the middle class got fucked.

Fri, 05/16/2014 - 09:53 | 4766235 Ignatius
Ignatius's picture

So the operative idea here is what is the relative power relationships of the players involved.  The article speaks to this where the wealthy can afford to hire expert help in staying ahead of the debasement through varied investments.  The average Joe buys gold and/or silver, but these are obvious and manipulated as part of financial repression.

It works till it don't.

Fri, 05/16/2014 - 09:57 | 4766261 JRobby
JRobby's picture

Notional value to infinity. Nothing else matters.

Fri, 05/16/2014 - 09:38 | 4766167 Leveraged Algorithm
Leveraged Algorithm's picture

There is something limitless - human stupidity.

Fri, 05/16/2014 - 09:43 | 4766190 curbyourrisk
curbyourrisk's picture

And Bull Shit.  Washington is the number one producer of Bull Shit, but does not have a corner on the market, not by far.

Fri, 05/16/2014 - 11:57 | 4766763 nope-1004
nope-1004's picture

Bernanke is the biggest public liar I have ever seen.  Washington is corrupt to the core and full of bullshit, agreed, but Bernanke is a total fraud.  And he knows it, otherwise he wouldn't have quit his job claiming "victory" while still a relatively young man.

I hope God takes it easy on him, for the countless millions of people he has negatively, directly, and intentionally lied to and affected.  Hitler didn't even affect this many people.

Bernanke, you're the biggest liar this world has ever known.

BofA has been secretly bailed out on a number of occasions, yet the lie to the people is that banks pass all stress tests with flying colors.  It is common knowledge that the TBTF banks are insolvent.  You just won't admit reality.

Bernanke, you're a fake, fraud, liar, and imbecile.  Anyone smart enough to know common civility and respect would not even take the job as Fed Chair.  Shows how weak you are and how drawn you are to your real god, money.

Fake people have it good on the surface, but are pained deep down.  My belief is that Bernanke will likely commit suicide before he dies naturally, if he has a conscience.  If not, then he'll live into old age denying the reality that we all know:  The big western banks are insolvent, the Fed is a ponzi, and the US govvy is broke.

 

Fri, 05/16/2014 - 09:43 | 4766192 LawsofPhysics
LawsofPhysics's picture

Remember, 50% of the population is "below average".

same as it ever was...

Fri, 05/16/2014 - 09:53 | 4766242 RevRex
RevRex's picture

But only 4% of Americans believe they are of below average intelligence...

Fri, 05/16/2014 - 09:54 | 4766246 NoDebt
NoDebt's picture

There you go using logic again.  In fact, recent studies have shown that only 22% of the population is rated as "below average".  The study was one of the mose exhaustive of it's kind.  (And the results were seasonally adjusted by the BLS and graded on a curve by the Department of Education.)

Fri, 05/16/2014 - 10:11 | 4766310 Dr. Engali
Dr. Engali's picture

But only 4% of the people believe they are below average which probably makes them above average since they are smart enough to recognize the fact that they are below average. 

 

I think I blew out a few brain cells and put myself in the below average category contemplating that.

Fri, 05/16/2014 - 11:10 | 4766579 GernB
GernB's picture

Apparently only 4% of people understand the meaning of the word "average"

Fri, 05/16/2014 - 10:05 | 4766294 replaceme
replaceme's picture

...and all of 4% believe they're not below average.  Makes perfect sense.

Fri, 05/16/2014 - 10:11 | 4766314 BrosephStiglitz
BrosephStiglitz's picture

...and 98% of those 4% are indeed above average but have an inferiority complex.

Fri, 05/16/2014 - 10:09 | 4766306 BrosephStiglitz
BrosephStiglitz's picture

And the distribution has moved to the left over the last few decades.  4eva bullish.

Fri, 05/16/2014 - 10:12 | 4766323 Dr. Engali
Dr. Engali's picture

Remember, 50% of the population is "below average".

 

Roughly the same amount of people on government programs.... go figure.

Fri, 05/16/2014 - 11:14 | 4766608 GernB
GernB's picture

We'll, technically slightly less than 50% since more people will be greater than or equal to average than will be less than.

Fri, 05/16/2014 - 09:40 | 4766178 dirtyfiles
dirtyfiles's picture

magic

Fri, 05/16/2014 - 09:40 | 4766181 Agent P
Agent P's picture

And all this time I thought Sophistry was couch fabric. 

Fri, 05/16/2014 - 09:44 | 4766194 Ignatius
Ignatius's picture

It might as well be...

Fri, 05/16/2014 - 09:41 | 4766182 RaceToTheBottom
RaceToTheBottom's picture

They know exactly what they are doing.

Fri, 05/16/2014 - 09:43 | 4766188 intric8
intric8's picture

Bernanke is also schooled in the art of equivocation, but not as masterful as his predecessor easy Al who wrote the book on fed speak

Fri, 05/16/2014 - 09:44 | 4766193 Flakmeister
Flakmeister's picture

Sure it failed to return things to normal, but once the event horizon has been crossed there is no return to normal...

Were the failure modes of the alternatives any better?

Fri, 05/16/2014 - 10:00 | 4766260 Dr. Engali
Dr. Engali's picture

The old, can you imagine what it would have been like if they hadn't intervened argument. Well I guess we will never know now will we? 

True there is no going back to "normal" once we've crossed the event horizon, however I would have preferred liquidation of bad entities and assets in order to stave off the continued distortions in the market and the misallocation of capital. 

Fri, 05/16/2014 - 11:13 | 4766596 Flakmeister
Flakmeister's picture

Yes, but the problem is that the system could not survive the all the required haircuts....

No doubt things could have been handled differently, but the financial Coup d'Etat aka TARP in the waning days of the Bush Admin sealed the deal...

Fri, 05/16/2014 - 11:21 | 4766642 Dr. Engali
Dr. Engali's picture

"Yes, but the problem is that the system could not survive the all the required haircuts...."

 

Exactly, and that is the idea. The system is too corrupt and should never have been saved, yet here we are in a dying system. Oil will eventually come back and finish off the job it started in 07.

Fri, 05/16/2014 - 12:05 | 4766793 Flakmeister
Flakmeister's picture

We are quibbling...

And be careful what you wish for...

Fri, 05/16/2014 - 09:57 | 4766263 RaceToTheBottom
RaceToTheBottom's picture

I can think of a few with WS paying their dues, and operating on a sustainable basis moving forward, that are definitely better

Fri, 05/16/2014 - 11:14 | 4766605 Flakmeister
Flakmeister's picture

Agreed.... but TARP precluded cleaning up Wall St....

Fri, 05/16/2014 - 11:15 | 4766408 ebworthen
ebworthen's picture

Yes.

The failure of GM would have been glorious.

To see AIG bite the dust and shutter it's doors and Bob Benmosche flipping burgers - redemptive.

To see Citi shut down along with Bear Stearns be liquidated and not bailed out - would have restored confidence.

Fri, 05/16/2014 - 11:17 | 4766623 Flakmeister
Flakmeister's picture

I agree in principle, but the best one could have hoped for the the Swedish solution in the '90s...

TARP took that off the table...

Fri, 05/16/2014 - 11:25 | 4766661 overmedicatedun...
overmedicatedundersexed's picture

some of us think BK of the TBTF banks and AIG  in the usa would be a little less than your event horizon,

and we could have had healthy co's buying off the remains with the days of the mega international banks perhaps gone for a long time....you know the way it is set for the little people who go bk.

"the event horizon has been crossed there is no return to normal..." poppycock

Fri, 05/16/2014 - 12:00 | 4766775 Flakmeister
Flakmeister's picture

You are entitled to your opinion, however misguided and naive it may be...

The game is over, even if you think you can change the rules...

Fri, 05/16/2014 - 09:48 | 4766197 NoDebt
NoDebt's picture

"Me and Hank Paulson need $800 Billion dollars by the end of the week or it's all over!"

"OK, what are you going to do with the money?"

"We're going to buy all the bad assets out of the banks."

Flash forward a week after they have the money and Bernanke goes on TV with a little smirk and says "You'll never guess what we figured out.  We could just hand the money to the banks to recapitalize them instead of buying the bad assets, so that's what we did with it."  Surprise!  Suckers.

They knew that's what they were going to do all along.  Proof?  OK.  When QE4 was started there was NO Congressional approval and guess what that money is spent on?  Buying those exact same bad assets from the banks.

Fri, 05/16/2014 - 10:06 | 4766295 Four chan
Four chan's picture

outstanding point.

Fri, 05/16/2014 - 11:07 | 4766569 slightlyskeptical
slightlyskeptical's picture

I don't think they are buying "bad" paper with QE4. I think they buying all the "fresh" paper because no one else wants to take the risk of low interest rate MBS in this market. Which makes the whole FNM and FRE debate ridiculous. No one wants the crap now. Without Fed and .gov particpation there would be no mortgage markets whatsoever. The Fed is buying "good" paper in my opinion or at least they are buying paper which has not yet gone "bad".

Fri, 05/16/2014 - 09:50 | 4766214 Dr. Engali
Dr. Engali's picture

If you accept the premise that the Bernank was attempting to stimulate the economy then yes his attempts were a failure. However, if you believe the the Bernank was attempting maintain the status quo, protecting the banks and transferring wealth to the .01%, then QE was a rousing success.

Fri, 05/16/2014 - 10:26 | 4766215 ebworthen
ebworthen's picture

My Dad always said:  "There isn't anything free in this world and it's a cold, hard place."

Unless of course you are a Central Banker who can create free money for banks and warm your ass in a cushy taxpayer funded:  chair, office, job.

Fri, 05/16/2014 - 09:50 | 4766227 pods
pods's picture

The biggest problem is that the FED has great PR.  They have convinced a strong majority (not here) that the FED is a utility-like organization working for the people.

Go around and talk to people. If they even know what the FED is, they usually think that the FED is working for us instead of those who own the FED.

Greatest travesty of the 20th century.  Well, along with the willful deception of the education system in avoiding teaching about what the FED is and of money (currency) in general.

pods

Fri, 05/16/2014 - 09:57 | 4766258 Spastica Rex
Spastica Rex's picture

Well, along with the willful deception of the education system in avoiding teaching about what the FED is and of money (currency) in general.

Dis-education is the greatest travesty. Although again, it's a matter of perspective.

Credulous, distracted, frightened, conformists with an insatiable desire for new and more stuff have been mighty benneficial if you've had something to sell them.

Fri, 05/16/2014 - 12:17 | 4766815 Flakmeister
Flakmeister's picture

Funny how the greatest era for the American middle class was smack dab in the middle of the Fed's reign of terror....

And it was only when the oil supply stopped growing that the wheels started to wobble...

Fri, 05/16/2014 - 09:59 | 4766270 gcjohns1971
gcjohns1971's picture

They don't need to have great PR.

People's natural response to power is the suspension of independent critical thinking under the assumption that power greater than theirs requires brilliance greater than theirs.

Fri, 05/16/2014 - 10:27 | 4766390 ebworthen
ebworthen's picture

Wolves, Sheepdogs, and Sheep.

Fri, 05/16/2014 - 10:32 | 4766413 kchrisc
kchrisc's picture

The greatest trick the Devil ever pulled was becoming a bankster."

Fri, 05/16/2014 - 09:55 | 4766253 Imminent Collapse
Imminent Collapse's picture

Complicate, Obfuscate, Confiscate. 

Fri, 05/16/2014 - 10:15 | 4766331 intric8
intric8's picture

and that goes for more than a fed res chairs diction.

Ukraine anyone?

Fri, 05/16/2014 - 09:56 | 4766256 Ban KKiller
Ban KKiller's picture

So, endless printing is a good idea. This will ensure that those of us that are rich will lose our purchasing power? 

Rich=roof over your head. 

Fri, 05/16/2014 - 09:57 | 4766262 gcjohns1971
gcjohns1971's picture

Where lies the boundary between rationalization and sophistry?

This is why power corrupts - there is no boundary between rationalization and sophistry. They are a matter of degree and both attempt to influence the self as well as others.

Fri, 05/16/2014 - 11:19 | 4766621 intric8
intric8's picture

Humans rationalize to justify failure. Without that ability, we would go insane or kill ourselves from depression.

Fed res chairs dont need to rationalize. They are beyond personal responsibility. From their use of broad macro metrics on down to their fallacious core construct of man represented in homo economicus, they play out an outlandish, elaborate game based on unproven assumptions rigged to benefit the rich, and in a more recently pressing aim, to extract wealth from the middle class and transfer it to the elite as fast as possible. They rely on theoretical fantasy to perpetuate the game, and then try to convince us that its for our own good.

If basic americans recognize the lack of sustainability with the financial system but are subjected to sophistry and equivocation instead of clear and convincing evidence for sustainability,, how can it not end badly? They will lie and deceive us all until its too late. Then they fly off to their safe palaces prepared in advance while everyone else kills each other on the street.

Fri, 05/16/2014 - 16:08 | 4767586 SDShack
SDShack's picture

It's the sociopath way....

Fri, 05/16/2014 - 10:01 | 4766275 Elliptico
Elliptico's picture

The Fed is an incompetent business organization.  It operates as a monopoly. If better results are desired, open it up to competition.

Fri, 05/16/2014 - 10:17 | 4766336 BrosephStiglitz
BrosephStiglitz's picture

It's not incompetent.. it's very competent.  You just make the mistake of believing their mandate is related to the prosperity of the average citizen.

Fri, 05/16/2014 - 10:29 | 4766399 kchrisc
kchrisc's picture

Incompetent?! That they have stolen trillions from the American people and the rest of the world and millions of lives for over 100 years is not the hallmark of incompetence. It is the hallmark of very competent maleficence on a level never before seen in human history--it is evil.

 

"Incompetence or evil, my guillotine eats all the same."

Fri, 05/16/2014 - 10:22 | 4766362 kchrisc
kchrisc's picture

Famous words of all thieves: "Wasn't me."

 

"Tell it to the guillotine."

Fri, 05/16/2014 - 10:34 | 4766419 I Write Code
I Write Code's picture

Well, the world turned out to have details not dreamt of in his philosophy, Horatio.  I suppose that if the Fed printed *enough* bongobux that it would indeed cause inflation - in fact HYPERINFLATION.  But our boy Ben seems to have believed that it was a linear and tractable ramp, that he could cause just a *little* bit of inflation any time he wanted to, by printing just the right number of bongobux.  And then along came 2008 and the chance, nay, the *need*, to put words into action.

It didn't work.

Or at least it turns out that $4t in printing plus $10t in borrowing, was not enough, in the scenarios utilized, to bring about that desired sucking sound.  In fact, the scenarios utilized were carefully chosen NOT to produce inflation, and THAT part worked.

So, he was wrong.  Does that make him a sophist?  Geez, I've been wrong before, how about you?  Maybe we're all sophists.

Fri, 05/16/2014 - 10:47 | 4766458 proLiberty
proLiberty's picture

Bernanke is a properly credentialed liberal. Liberals give themselves permission to lie first to themselves. They live a lie, they lie to their loved ones, they lie to their friends and to everyone else. Their worldview is a lie. In fact they prefer the lie to the truth.

Liberal are, at heart, evil enemies of the truth.

In the case of "QE", it is based on embezzlement of value by dilution to the benefit of government that gets to buy stuff and gain dependency of citizens through usurpation of their own credit, assets and future incomes.

If Madoff was evil for his theft, what of the chief architect of a theft multiple thousands of times larger that further secures all present and future citizens into debt serfdom?

Fri, 05/16/2014 - 10:47 | 4766465 WTFUD
WTFUD's picture

Indeedee Benny's after dinner speak easies are netting him $250 mill and like Tony Blair payback for services rendered in maintaining the status quo for the banking cartel.
Until severe economic sanctions are placed on USSA the heavy jack-boot shall remain placed on the neck of the meek.

FREE CORZINE AND THROW THE BOOK AT SAWYER AND BGIB.

Fri, 05/16/2014 - 10:51 | 4766486 Species8472
Species8472's picture

You got your pills mixed.

 

Fri, 05/16/2014 - 11:14 | 4766602 BullyBearish
BullyBearish's picture

The USA has full-blown ECONOMIC APARTHEID

Fri, 05/16/2014 - 11:35 | 4766635 JR
JR's picture

The Bernanke policy, IMO, is not a failure if you considser what it was designed to do: increase the position in the market of the owners of the NY Fed Reserve System and put at a disadvantage their competitors.

Fri, 05/16/2014 - 11:36 | 4766685 q99x2
q99x2's picture

The Lucifarians and Satanists have moved in aggressively.

Keep the horns off of your head.

Fri, 05/16/2014 - 13:27 | 4766999 TrustWho
TrustWho's picture

Bernanke is a fearful cowardly professor. Einhorn pulls the curtain back more for all to see this coward and small small man. Bernanke says he was following the Japanese money printing model. Do you know what Bernanke advised the Japanese to do in early 90's? His advice is close to the philosophy you read on ZH for the 2007/08 financial crisis. This required to much strength and fortitude for a fearful cowardly professor to execute in the heat of the moment. QE1 saved the world in people's mind. Maybe so and Maybe not, but once you start printing how do you stop?

By the way, how is the Japanese experiment working? Intellectuals say America's major solution to our economic malaise is more education. Using Bernanke as a model, I believe our intellectuals are wrong--once again.

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