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Bernanke Shocker: "No Rate Normalization During My Lifetime"

Tyler Durden's picture




 

Forget all talk about "dots", "6 months", or any other prognostication from the Fed's new leadership about what will happen in the near and not so near future. For the real answer prepare to shelve out the usual fee of $250,000 for an hour with the Chairsatan, or read Reuters' account of what others who have done so, have learned. The answer is a stunner.

"At least one guest left a New York restaurant with the impression Bernanke, 60, does not expect the federal funds rate, the Fed's main benchmark interest rate, to rise back to its long-term average of around 4 percent in Bernanke's lifetime. "Shocking when he said this," the guest scribbled in his notes. "Is that really true?" he scribbled at another point, according to the notes reviewed by Reuters."

To think one could have read Zero Hedge for free for the past 5 years and gotten the same answer (time for a pop quiz: pumping liquidity into a closed system in perpetuity is i) inflationary or ii) deflationary?). But no, one would rather pay Bernanke's former annual salary in less than an hour to get the answer from the same person who infamously stated that "subprime was contained", that "there is no housing bubble", and that he doesn't buy the premise of house price declines as there has never been a "decline of house prices on a nationwide basis."

Still, one can't blame Bernanke for providing a service that the market (one market the former chairman didn't manage to break with his central planning spree, unlike all other markets) demands. Alan Greenspan waited only a week after his departure before addressing a private dinner hosted by Lehman Brothers, the investment bank whose collapse in 2008 sent the financial crisis into high gear.

Bernanke's private dinners, all of which cost around $250,000 began near the end of March, roughly two months after his retirement.

We say around because while Greenspan has already been rocked by 50% deflation in his "assets", Bernanke too is starting to realize that without constant liquidity injections, his "inflationary" days are also numbered:

The baseline fee for a private get together is $250,000, and more if Bernanke needs to travel from his home in Washington, though the price has dropped some as he has done more events, the sources said. The size of that decline could not be immediately learned.

Certainly expect the price of a Bernanke dinner to tumble now that virtually everyone who matters, and can afford the fee, has already listened to the Chairsatan in private, and the value of Bernanke's insight has been, shall we say, "diluted":

Hedge fund attendees have included Paul Tudor Jones of Tudor Investment Corp and David Einhorn of Greenlight Capital. Others have included Michael Novogratz of Fortress Investment Group, and Larry Robbins of Glenview Capital, as previously reported in other media. All declined to comment to Reuters.

 

David Tepper, the hedge fund manager who earned $3.5 billion in 2013 to rank as the industry's best paid investor, said at an industry conference this week that he attended the first private dinner and peppered Bernanke with questions. But Tepper said he didn't make the best use of the information, a lapse he now regrets. "I screwed up that trade," he said.

 

At the same conference, Novogratz from Fortress said many hedge funds that bet on big interest rate and currency movements missed a hint from Bernanke at the dinner and failed to buy long duration Treasuries.

Oh yeah, it was Bernanke hinting that Tsys are due for a surge - nothing to do with the fact that the global economy is stalling and that everyone and the kitchen sink was short rates, launching one of the biggest short squeezes in recent history.

Not surprisingly, not everyone is a happy customer:

Not every guest believes they came away from a Bernanke dinner with an exclusive insight.

 

"People can try all they want to feel that they got him to say something extra to them, but he never does," said one person who attended one of the dinners.

As for Bernanke's profound insight, it appears all he really did is admit that he failed at stimulating the economy.

In one dinner-table exchange with investors, Bernanke argued that fiscal tightening, constrained financial markets and lower U.S. productivity all point to lower real rates than would be considered normal for a long time to come.

 

Based on trading in the massive Eurodollar futures market, investors have in recent months tempered expectations of rate rises in the years ahead; as it stands, they don't expect the fed funds rate to return to 4 percent until 2022. As recently as last September, futures markets signaled they thought this would happen by the end of 2018.

 

At the dinners, Bernanke has also argued the Fed would want to delay raising rates if the tighter financial conditions created could threaten to harm the economy. He has also stressed that financial stability concerns would more formally be considered in policy-making, according to the sources.

In other words, blame Congress for slowing down the economy as it did not engage in reform, the same Congress which explicitly made it clear it would not engage in reform and told the Mr. Chairman "to get to work" to compensate for Congressional ineptitude. And now Bernanke has the gall to blame Congress, which is only able to do what it does thanks to, you guessed it, the Fed's ZIRP policy.

Of course, the slowing down of the economy, snow or no snow, is precisely the reason why bonds are bid. We explained as much recently:

"When the Fed begins lifting rates is almost not an issue any more,” Stan Jonas, former managing partner of Axiom Management Partners in New York, "The real question is how fast does the Fed increase rates and where do they stop. The market now sees diminished macroeconomic expectations and expects the Fed to ending the upcoming tightening cycle at around 3 percent."

 

 

In other words, the bond market believes in the Japanization of America and another lost decade as the new normal low/no growth world slugs along with no escape velocity dreams anytime soon.

 

Or even more clearly - it's about more than this cycle... the Fed's taper will run its course, the Fed will tighten rates and the economy will slump rapidly meaning the Fed will ease once again (and by then QE will have lost all credibility as anything but an asset inflation machine and along with it - the Fed's credibility)... the tumble in forward rates indicates the markets growing belief that the future growthiness looks very different from the dream priced into stocks...

Or, in other words, the Taper will lead to the Untaper, as we predicted exactly one year ago, leading to QE number... we don't even know the nuimber any more - 5,  6,  7? Rinse. Repeat.

As for the conclusion:

"He's being paid ... for sharing his wisdom and predictions, and presumably not to exert his influence on the Fed," he added. This will go on "until he's proven to not be all that clairvoyant."

The biggest shocker is not that Bernanke punked the market once again and after 5 years of QE the US economy is once again headed into a tailspin - most people with some common sense knew that in 2009.

The shocker is that people are willing to pay even $1, let alone $250,000, to listen to Bernanke speak.

 

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Sat, 05/17/2014 - 11:44 | 4769287 I Write Code
I Write Code's picture

The reason people will pay $250,000 to go to his dinners, is that afterwards there's a raffle for one of those trillion dollar coins.

Sat, 05/17/2014 - 11:52 | 4769304 thamnosma
thamnosma's picture

Off topic but I thought of interest.  If anybody doubts Eric Holder is an out and out communist (and communists can work very well with crony capitalists) -- those of us old enough and interested in politics know very well the meaning of his words -- this should convince you:

"Attorney General Eric Holder on recent racially charged controversies in the US during commencement speech at Morgan State University: 'These outbursts of bigotry, while deplorable, are not the true markers of the struggle that still must be waged, or the work that still needs to be done, because the greatest threats do not announce themselves in screaming headlines'"

As reported in todays Wall Street Journal.

And what are those "greatest threats" quisling Holder refers to?  Maybe free speech?

 

Sat, 05/17/2014 - 12:05 | 4769325 Mr.Sono
Mr.Sono's picture

cheap money for every one as long as ben is still alive. p.s maybe he is not planning to live much longer?

Sat, 05/17/2014 - 12:26 | 4769364 DUNTHAT
DUNTHAT's picture

What Bernanke is saying is that all the manipulation of financial instruments worldwide, together with all the manipulation of statistics worldwide, will come completely undone with a return to normal interest rates. In other words, the depression that was artificially avoided over the past few years will return in a heartbeat!

Sat, 05/17/2014 - 19:15 | 4770205 Goldilocks
Goldilocks's picture

Deee-Lite - "Groove Is In The Heart" (Official Music Video)
http://www.youtube.com/watch?v=gzoEK545j64 (5:11)

Sat, 05/17/2014 - 13:01 | 4769439 NoWayJose
NoWayJose's picture

With all the bankers and ex-bankers falling from rooftops, maybe Bernanke is wondering about the length of his lifetime...

Sat, 05/17/2014 - 13:03 | 4769442 williambanzai7
williambanzai7's picture

Shit floats...some butter with your toast?

Sun, 05/18/2014 - 00:49 | 4770786 blindman
Sat, 05/17/2014 - 13:07 | 4769451 arby63
arby63's picture

At this point we all know our entire system is rigged. This can't go on indefinitely. It's just not possible.

 

The masses argetting too poor. We all see it. Business is slowing down everywhere and that is clear.

 

I try and ponder what's next.

Sat, 05/17/2014 - 13:43 | 4769525 AdvancingTime
AdvancingTime's picture

I recently found myself thinking about the decline or collapse of great empires and realized that it is often hard to predict when or how their demise will occur. Many analogies can be taken from this idea, the empire need not be great and timing is always hard to correctly gauge.

The signs of decline may be everywhere but that does not guarantee the end is near. As the foundation crumbles away it is not uncommon for those in power to extend their rule by many tricks and changing the rules in order to gain a new lease on life. More on the subject of how empires collapse in the article below. http://brucewilds.blogspot.com/2014/05/how-empires-collapse.html

Sat, 05/17/2014 - 13:37 | 4769510 AdvancingTime
AdvancingTime's picture

 Janet Yellen has been head of the Federal Reserve bank long enough that we no longer need to speculate as to her job performance. As we begin to critique her ability to perform we must remember perception is often just as important as reality. Another issue that comes into play is how you stack up or compare to the person who held the position previously, this often extends to style as much as it does to substance. 

As expected it appears Janet Yellen has chosen to take us down the same the rabbit hole as Bernanke on a journey to prove that if we just continue doing what is not working, all will turn out fine. Caution, this path leads down, and down, and down, farther and deeper then most can ever imagine. If asked to critique "Old Yellar" now playing in theaters everywhere I would by way of the reasoning above have to give her the maximum two solid thumbs down.

 http://brucewilds.blogspot.com/2014/05/yellens-job-critique.html

Sat, 05/17/2014 - 13:40 | 4769520 Dre4dwolf
Dre4dwolf's picture

Because the Fed will go the way of the Dino before hes long gone.

So there wont be a fed rate, there wont be any rate.

Sat, 05/17/2014 - 13:44 | 4769528 grekko
grekko's picture

Of course they can't raise the rates.  If they do, it's game over.  The gov collapses and the Fed goes down the toilet with them.  The people win!

Sat, 05/17/2014 - 13:59 | 4769549 damicol
damicol's picture

For $1 you buy a silver bullet and shoot that cunt in the face.

The real mystery is why no one did that to rid the planet of one of  the most dangerous cancerous viruses  to ever emerge  to infect humanity.

 That and the other fucking diabolical  disease from Kenya

Sat, 05/17/2014 - 17:28 | 4769578 Loophole
Loophole's picture

When you look at the big picture, it's obvious that the money printing will never stop and that the govt will be stealing everything it can every other way it can also because our growing entitlement state demands it. The notion that the present monetary and fiscal actions will somehow "stimulate growth" and that we are in a "recovery" is absurd because everything they are doing is just stealing.

Simple as that.

Sat, 05/17/2014 - 14:28 | 4769601 Prisoners_dilemna
Prisoners_dilemna's picture

"pumping liquidity into a closed system in perpetuity is i) inflationary or ii) deflationary?"

I'm gonna go with C) Retardedly Insane or Malicious

 

Of course i) works as well.

Sat, 05/17/2014 - 15:00 | 4769655 Bloody Muppet
Bloody Muppet's picture

Fuck You, Bernanke!

Sat, 05/17/2014 - 15:40 | 4769720 g'kar
g'kar's picture

Trillion dollar federal deficits and multi trillion dollar federal debt can only be financed via near zero interest rates until it can't.

Sat, 05/17/2014 - 15:44 | 4769729 khakuda
khakuda's picture

Each time they've raised rates in the past 15 years the stock market or real estate has crashed. Politically, they can't let that happen again and stay employed. They are going to continue to pretend there is no inflation and keep rates close to zero as long as they can, encouraging more debt and, eventually bailouts and defaults.

As the creditors like Japan and China figure it out, the Fed will resort to printing money again to monetize the debt.

Sat, 05/17/2014 - 17:41 | 4769969 Loophole
Loophole's picture

They aren't "pumping liquidity" into the economy. They are stealing the real wealth represented by money from people with money holdings like savers, various kinds of creditors, pensioners, ss recipients, et al and using it to prop up the stock market, the housing market, the bond market and the welfare state.

This reservoir of wealth is not unlimited. When it is exhausted, these subsidized entities will come crashing down and take everyone else with them.

Except for those who are prepared for it.

Sat, 05/17/2014 - 18:19 | 4770045 blindman
blindman's picture

does counterfeiting stimulate or retard the
economy if only the few already wealthy
and corporate producers have access to the
perfect counterfeit notes? an interesting
question?

Sat, 05/17/2014 - 19:07 | 4770190 Yen Cross
Sat, 05/17/2014 - 19:14 | 4770203 ATG
ATG's picture

Kudlow said similar on CNBC this week after his show was terminated.

Just another unsuccessful jawbone ploy?

Consider this American Revolution Live:

http://bit.ly/1kcHKhv

Sat, 05/17/2014 - 19:46 | 4770248 TrustWho
TrustWho's picture

Fuck Bernanke, may his soul never find peace and sleep with the pigs.

Sat, 05/17/2014 - 19:56 | 4770269 Elliptico
Elliptico's picture

Perhaps the Bernanke will cross a Chechen lawyer soon and rates will normalize.

Sat, 05/17/2014 - 22:19 | 4770511 nathan1234
nathan1234's picture

Who are these A$$holes who pay money ( yes of course it's just Ben's own paper) to meet him and hear him?

Even if you paid me money I would rather not see him or hear him.

He needs to be confined to the dustbin of  history. But Alas, sadly his actions on the world's economy will live in ignominy for centuries to come.

He will be used as a lesson in Economics and Finance. How not to Fcuk up.

 

Sat, 05/17/2014 - 22:26 | 4770521 blindman
blindman's picture

@..what u said,
i don't know them.

Sat, 05/17/2014 - 22:34 | 4770533 FredFlintstone
FredFlintstone's picture

Why don't we raise $250k here at ZH and invite Mr. Bernake to speak to us at a dinner? If he choked on a chicken bone before taking the podium we would not have to pay him, correct?

Sun, 05/18/2014 - 01:37 | 4770819 IRC162
IRC162's picture

What the smug lil fuck meant to say, is once the Fed's sideline partners are completely tapped,  and the bear & dragon start the squeeze & twist on US' balls via non-USD trade,  the only way the Fed will get an outside buck is with one hell of an incentive .  Accordingly,  rates will rocket past 'normal'  rates to make a market until implosion....so he was telling the truth. 

Or, roll out the launch codes and get ready for one hell of a sunburn and instant dirt nap....there!  He told the truth again. 

 

Congrats Ben,  you just helped kill the USD, our only real 'product.   Or,  you helped kick off WWIII,  and destroyed human civilization as we know it. 

 

Can't wait till the bail-in to keep you motherfuckers circling the drain for a few more laps....

 

This man's 'leadership'  has taken our inevitable correction,  which would have been a painful wreck,  to a full throttle 2.5 G nose dive. Fuck a seatbelt sign at this point,  tell those bitches to roll the beverage cart. 

In either scenario, the lucky ones will perish quickly and without too much suffering.  Many of those who survive the initial impact will wish they hadn't,  because the other side is going to be a concoction of all our worst nightmares combined. 

 

I'm at a loss for words to express what this fuck deserves.  Our children deserved far far better. 

 

May you choke on a bag of dicks and get a good skull fucking on your way to the lamppost. 

Sun, 05/18/2014 - 02:46 | 4770884 zebrasquid
zebrasquid's picture

Talking about his lifetime..before long, he may be offering mobs 250k per person to not kick his severed head down the street..

Sun, 05/18/2014 - 03:09 | 4770898 robertocarlos
robertocarlos's picture

Dude, 'they' get free money, all others have to pay 3-33 percent.

Sun, 05/18/2014 - 04:05 | 4770922 q99x2
q99x2's picture

Thanks for the opportunity to say, "Fuck You Bernanke."

Sun, 05/18/2014 - 06:10 | 4770965 Obamanism
Obamanism's picture

Newscaster "Mr B Bernake died today after being asked to pay a dinner bill in which he was invited to speak. He suddenly pulled out a nail gun and shot him 7 times in the head. His last words were " Where is my helicopter?""

"Other news the interest rate rise brings the rate upto its normal value for savers to beat inflation"

Sun, 05/18/2014 - 06:14 | 4770969 orangegeek
orangegeek's picture

"they" pumped liquidity into the system to create inflation.

 

government needs inflation to manage their debt and ensure revenues continue to pour in.

 

what's happening?  well the opposite of course - deflation.

 

yes, a few commodities have hit peaks earlier in 2014, but the CRB today (307) is well below 2008 highs (near 480) and has been this way for six years with no upside in sight.

 

deflation is here, has been here for some time and will be here for many years to come.

 

baltic dry index is in the tank too - 11700 in 2008, now 900 six years later - shipping is cheap now - why?  no one is shipping.

 

deflation folks - central banks can keep this propped up for only so much longer.

Sun, 05/18/2014 - 09:50 | 4771093 AdvancingTime
AdvancingTime's picture

While I agree on many of your points I would like to present an argument that hyper-inflation could result from the takedown.

The modern economy that has evolved over the last several decades is loaded with interwoven contracts reeking of contagion. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Never before has mankind diverted such a large percentage of wealth into intangible products or goods.  I contend this is the primary reason that inflation has not raised its ugly head or become a major economic issue. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas. It is important to remember that debts can go unpaid and promises be left unfilled. Is this possible and if so where would that leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Sun, 05/18/2014 - 08:08 | 4771025 Catullus
Catullus's picture

The Fed is in a Coffin Corner.

 

That'll be $250k, please.

Sun, 05/18/2014 - 09:39 | 4771083 AdvancingTime
AdvancingTime's picture

 A big shift is occurring in what consumers are buying. Recently we are witnessing a shift from general consumer goods to more purchases of autos and healthcare. The first quarter GDP just came out with a near flat increase of just .1% yet these two sectors have been outperforming the economy. 

If indeed online and auto sales are roaring up double digits at the same time healthcare spending has increased 4.2% it is only fair to assume small business and someone else is getting their ass kicked. Interestingly, this is all occurring as the government continues to pour out billions of dollars each month in student loans, many of these loans will never be repaid. This can be viewed as more proof we are on the wrong path, more on this subject in the article below. 

 http://brucewilds.blogspot.com/2014/05/consumption-of-autos-healthcare-a...

Sun, 05/18/2014 - 10:24 | 4771137 Playtime's Over
Playtime's Over's picture

The slow death of our economy has an expiration date. It's like constipation, I like many other ZH readers would like to see the crash so we could get on with a real recovery and more aligned with our founding principals. Hopium and chains rules for now.   The crazy Keynsian rulers of the universe continue thier satanical mission unabated. I might make some enemies but I'm not impressed with the cynics here that use every opportunity to muddy the waters and tell us how "equal" our political parties are at this juncture. Interesting how obvious it is that the disaster flows one spectrum of the leftist policies  the now reign and yet we must be reminded that it would be no better with the "other" crew.  There can be nothing clearer than the disaster progressives and the Kenyan Keynsians have wrought with thier win of the cultures.  Yes, I know the Rebukes are sad too but which end of the spectrum are we to cheer for? There are adults out there, I cheer for them. There is no hope for reason with folks who believe utopia is in thier DNA and know how to force it upon us??? I call this phenomenon "Bush fatigue".  The great culmination of Rebuke stupidity.  Not a nickles worth of difference between Bushie and the mocha latte prez.

       I respect the incredible knowledge and finacial intelligence here. The existence of ZH gives me hope for the future of this country. I believe the cynicism comes from the depressive thoughts associated with the horror that the country must go through to survive current Fed policy. Totally understandable. But in the end, what do we do?  What DO we do.  I do agree with most ZH posters that things will have to get worse before they get better.  Flame away cynistans.

Sun, 05/18/2014 - 12:01 | 4771300 nostromo17
nostromo17's picture

Artificially low rates over the period of time longer than his remaining life span certainly serves U.S. government debt servicing. Rolling higher interest existing debt and servicing debt with money borrowed at lower rates may well extend for well beyond 20 to thirty years given national debt continues to grow. How inflation or deflation play out in such a context will be interesting. Paying debt down with cheaper inflated dollars also serves the 'debt management' scenario...I wonder where the projection graphs showing the interaction of these lines of action are hidden at the fed and if the lines on these graphs ever actually cross into some resolution in various scenarios? Which is to say is there some goal other than maintaining the most complex Ponzi scheme in history?

Once the national real estate lost its value from bubble highs by about %40 the basic collateral for all the contracts written during the frothy bubbling became defaults realized or unrealized and this became the prime motive for 'supporting' what became a bubble value defaulted U.S. economy. "Support' being in this case providing the fumes for the engine of the economy to keep running in a token manner with a gas tank empty of its fuel which is credit.

WHere did all the printed money go? Not to the consumer where it might have fueled money velocity, spending, production and credit formation, instead it went to back stopping the banks creating huge deposits at the Fed by the banks which curiously is a net zero as far as money creation since the Fed 'created' or printed if you like the money and the same money is at the fed in the form of these banks' deposits. Along the way to reconciliation of the accounts it acts as false collateral which the banks used as the Fed expected they would to artificially inflate the stock market which everyone reads as growth in value of the economy ignoring that the original collapse in value of the bubble economy occurred in a much larger market, the U.S. real estate market based on a fairly objective and real underlying land property value( even if the value is bubble distortable).

It is in every government and corporate entity's interest to maintain this artifice while the real economy shrinks or at best maintains its already deleterious state as people do not have the money because they have no jobs, even to eat. To keep the dissatisfaction of the victims of this ruse under control the expense becomes for this ruling class welfare and welfare government institutions such as the military and homeland security and the increasing police state-ification of the nation co-opting the workers in these groups to support their own self interest in having these more welfare providing than useful pseudo jobs which happen to be also the groups that will be used to control and oppress the now idle unemployed if their dissatisfaction reaches a critical mass where they revolt against the powers that deprived them of their right to work and support themselves and then defined them as the burden to society they were made into by the corruption and mismanagement by the very governments and global corporations serving at best their own short term ends to effect the destruction of viable means to manage the world and so far the destruction of the world economy.

As it stands none of this will end well. No sir.

 

 

Sun, 05/18/2014 - 12:05 | 4771318 OC Sure
OC Sure's picture

 

 

 

The central bankers hoax exposed:

Gold is not money.

 

Paper is not money.

 

What is money?

 

What a thing is is defined by its nature, its fundamental essence which brings it into being. A thing can and often does have many characteristics. However there is only one essence that defines its nature. What then defines the nature of money?

 

Money is a concept first, then it becomes a thing.

 

For you to grasp this principle of which I am about to explain requires you to make the same intellectual leap as it took for Aristarchus and Copernicus to reason without contradicting the facts. What it takes from you is to comprehend the concept of money just as you had rejected the perceptual-geocentric view of our solar system and embraced the conceptual-heliocentric view instead. Understanding anything always requires your ratiocinative volition.

 

If money is a concept, then from what percepts was it conceived?

 

Money was invented as a means of equalizing the measure of disproportionate work. The work always yields a final product so to say that money equalizes the price of products that are not commensurate is very close to a formal definition but not the one essential characteristic; for it is the work that creates the product so essentially the money is measuring the value of the labor and not the product.

 

For example, observe a transaction between a builder and a shoemaker. The builder needs shoes and the shoemaker needs a house but the builder wouldn't trade a house for a pair of shoes nor would he accept 1,000 pairs of shoes for a house. So money was conceived as a measure for the exchange among producers whose labor is simpler versus those whose labor is more complex. This conception is then objectified by an agreed upon perceptual unit; a real thing that can represent the conception of money. Say that one monetary unit will equal 1 pair of shoes. Now the builder can give the shoemaker a unit for a pair of shoes. The shoemaker can sell a thousand pairs of shoes and then give the builder 1,000 units for a house. So money actually represents an exchange between producers who trade their work for the work of another.

 

Now introduce another participant to the exchange but this party does no work and offers you no product but nevertheless demands that you give him your product. If such a party were to attempt to barter his nothing for your something you would undoubtedly walk away. However, he gives to you what appears to be the same agreed upon unit that measures the exchange of work. Your presumption of course is that that party must have earned those units by working too. However, you have been duped. Instead of working to earn units of money, the corrupted party has debased the unit (debasing by mixing common metals with the precious metals if the unit of money has been determined to be a precious metal) or impersonated the unit (impersonated it by replicating a copy of it if the unit of money has been determined to be paper or digital blips).

 

So the corrupted party has done zero work and represented himself as if he did. He passes off the deception of having worked, the imitation of work, the impersonation of work. The corrupted party is passing you counterfeit. The corrupted party is a thief and like any robber demands that you exchange with him your work for his non-work; your something for his nothing; your money for his counterfeit.

 

What modern economics calls the banks' multiplier effect or leverage is not the production of money but instead the creation of counterfeit. That is it is not the representation of the measure of work performed. Instead it is the impersonation of work performed; it took no labor to produce the measure of the multiplier and leverage, all it took was a pen stroke or an enter key. It represents no work and is therefore not money but instead it is counterfeit.

 

Money is the measure of work a person does to produce their product which satisfies the demands of other producers.

 

Counterfeit is the impersonation of work done when actually none has been performed.

 

What is the purpose of counterfeit? It represents the illusion of trading something for something when in fact it is the trading of nothing for something. Whomever trades nothing for something is a thief. Such is the corrupt nature of modern economics and how thieves steal from producers; they give them nothing but take something.

 

The modern definition of money is wrong and modern thieves depend upon you not understanding the difference between money and counterfeit. They count on you viewing the solar system as geocentric. Just as Copernicus rediscovered what Aristarchus already identified over 1500 years before him, so too do current economists need to rediscover what Aristotle already identified over 2000 years ago:

 

For the classic definition of money and why money was introduced into commerce, I refer you to Aristotle's Nicomachean Ethics; Book V, section 5.

Sun, 05/18/2014 - 12:34 | 4771400 Last of the Mid...
Last of the Middle Class's picture

For those who haven't got the f'ing memo. Rate normalization is gone forever!  =

Sun, 05/18/2014 - 12:40 | 4771412 Last of the Mid...
Last of the Middle Class's picture

Perhaps you didn't notice the hard left we took into the cosmic bunnyhole of central planning we took a few years back. Posting some shit on FB I would imagine.

Sun, 05/18/2014 - 14:20 | 4771579 Cacete de Ouro
Cacete de Ouro's picture

So does this mean free Spider-man beach towels or no free Spider-man beach towels?

Sun, 05/18/2014 - 14:29 | 4771591 BeingThere
BeingThere's picture

Maybe his health is bad and his doctor told him some bad health news!

All kidding aside. Given how high our debt is, they probably can't let inflation rear it's ugly head. It means the death of savings and only the crazy casino of the stock market can be the way to invest for your future. Oh, indeed, new bubbleishis is rising, but well, you are now on the dragon coaster of a financial system.

We have been put in a bind from which we cannot extricate ourselves.

For how long can this go on? Keep guessing.....Bernanke's lifespan.....

 

Sun, 05/18/2014 - 15:54 | 4771715 SameAsItEverWas
SameAsItEverWas's picture

The shocker is that people are willing to pay even $1, let alone $250,000, to listen to Bernanke speak.

100% deductible as a business expense, including travel and lodging, but only 50% of meals.

Sun, 05/18/2014 - 23:08 | 4772668 honestann
honestann's picture

Translation:  Convert all paper assets to physical gold, silver, platinum, palladium, rhodium and/or productive machinery.  Back up the truck, load it down, and go hide it securely.

Mon, 05/19/2014 - 05:30 | 4772900 Azannoth
Azannoth's picture

$250,000 an hour! .. talk about an expensive Hooker!

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