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What Peter Schiff Said To Ben Bernanke
Last week, a photo of the oddest couple in finance, Peter Schiff and Ben Bernanke together "celebrating the economic recovery", promptly went viral.
As it turns out there was more to the story.
On his Friday podcast, Peter Schiff told the story of his encounter with Ben Bernanke at the SALT Conference last week where he took the photo above. Peter talks about his close encounter of the Bernanke kind 13:30 into the podcast.
Below is a transcript of the relevant section:
“Speaking of a clueless Federal Reserve, I happened to have an encounter the other day with former Federal Reserve Chairman Ben Bernanke. Many of you may have seen the picture of me and the former Chairman. We were at a cocktail party, and I posted that picture on my Facebook page…
“I’ll give you all of the details. So first of all, Ben Bernanke was there to speak at the SALT Conference… He was paid, I believe, somewhere between $200-250,000 to basically hit the soft balls that were lobbed to him by Anthony Scaramucci, who was the host of this conference… At least make the guy do something for $200,000 – let me question him. In any event, he probably wouldn’t agree to that…
“I was watching from the speaker’s lounge… He walks out, and he’s accompanied by his secretary. He doesn’t have a big entourage… I see him and I come right up to him and I say, ‘Mr. Bernanke.’ I put my hand out and I say, ‘Peter Schiff.’ I can sense from his body language and the way he looked that the name was familiar. I think he knew something about me, but he didn’t necessarily acknowledge it. I think he said something like, ‘Oh sure.’ But I was pretty sure he knew who I was at that point. I wanted to make sure, because I didn’t want to have a conversation under false pretense.
“So the first thing I said to him, ‘Look, I gotta let you know, full disclosure, I’m probably your biggest critic.’ To which Ben Bernanke replied, ‘Well, you got a lot of competition.’ It’s probably true. There is a lot of competition. There are a lot of people who criticize Ben Bernanke. But I think I am his biggest critic. I’ve been criticizing him for longer than most people, and I certainly do it more often and more loudly.
“After that brief exchange I said, ‘Do you have a moment to chat? I’d love to talk to you.’ He said, ‘No, I don’t, I really got to go.’ I said, ‘Alright, how about a quick picture then?’ But that was it. He was gone. He was whisked away by his female handler, and I thought, ‘Well that was it. I’m not going to see that guy again.’ He was rushing to deposit his check, right?
“Later that evening, they have a cocktail party for the speakers. I get to the cocktail party, and who do I see standing there all by himself but Ben Bernanke. I got a drink and then went over to Mr. Bernanke who was still standing by himself, surprisingly. I said, ‘Mr. Bernanke, I thought you had to leave.’ He said, ‘No, I’m still here. I’ve got time for that picture now, if you want to take one. Which I thought was quite nice of him, because he remembered that I wanted a photograph, and he didn’t have time for it. Now he sees me and he asks if I would like to take a photograph…
“Initially I was thinking what do I do to spice this photograph up? Just a photo of me and Ben Bernanke. What’s the big deal? I thought maybe I should do the rabbit ears behind his head, but I felt kind of awkward doing that considering he had so graciously reminded me that I wanted a photograph and offered to pose with me. I felt that would be inappropriate of me to take advantage of him or make fun of him, so it was just a normal photograph…
“We got the photograph out of the way. Then I wanted to talk to him. The first thing I wanted to do was I wanted to give him my version of why the economy is so screwed up and why everything in it is wrong. The last thing he wanted to get was a lecture from me, but that’s what I tried to give him. But I tried to give him the Cliff Note version. I did want to ask him some questions, but I wanted to get his reaction to my take.
“I started talking about the housing bubble and the financial crisis and how the Federal Reserve caused that with its low interest rates. He said that no, it wasn’t that; that the interest rates had nothing to do with it. He first told me that the housing bubble was caused by Fannie and Freddie. At least he’s trying to blame the government. I said, ‘Look, Fannie and Freddie have been around since the 30s. We didn’t have that big housing bubble until the Fed happened to have interest rates at 1%, and then raised them very slowly. That wasn’t a coincidence.’ He said, ‘Well, it was subprime mortgages that did it.’ I said, ‘Subprime mortgages? But do you understand how subprime mortgages worked? They were all adjustable rates, and the most popular feature, what made them so enticing and affordable was the teaser rate. The fact that you can get a low rate of interest for the first few years. That was all because of the Fed. So if you’re going to blame subprime, you’ve got to blame the Fed, because the Fed is what gave life to subprime. It made subprime affordable.’ He also blamed regulation. He said regulation first before he said Fannie and Freddie. I said, ‘Well what regulations are you talking about?’ And he said Fannie and Freddie, which weren’t really regulations, they’re agencies. But he was really trying to lay the blame on the housing bubble on capitalism, because of subprime, and on the government, because of Fannie and Freddie.
“I said, ‘Wait a minute. If regulation and subprime and Fannie and Freddie – if that’s what caused the housing bubble, why didn’t you warn us about that in advance? Why didn’t you go in 2004, ‘Hey, we got a problem. We got these bad regulations, we got Fannie and Freddie, we got subprime , they’ve created a housing bubble! This is going to be a disaster!’’ He didn’t say any of that. He said the opposite of that. In fact, when he was asked specifically about the housing bubble, he denied that it existed. If it was being caused by the things that he said, why didn’t he warn about it? Because it wasn’t caused by those things…
“I tried to ask him some questions and that’s when he really wanted to end the conversation. The first question I said, ‘Mr. Bernanke, you’re so sure that you’re right. I don’t know how you can be so sure, because interest rates are still at zero and the Fed’s balance sheet hasn’t shrunk. You said you weren’t monetizing the debt when you talked to Congress. You said the Fed was going to sell the bonds, but none of them have been sold. They’ve all been rolled over. So how are you claiming victory when you haven’t exited? You haven’t raised rates, you haven’t shrunk the balance sheet. You were wrong in the past. You didn’t see the financial crisis coming. You told us there was no housing bubble. You said subprime was contained. So you were certainly wrong then. So how do you know you’re not wrong now? Is there anything that might change your opinion and get you to rethink and maybe admit that your outlook is wrong?’ I forget the exact words.
“Instead of answering the questions, he just patted me on the shoulder… And just kind of gave me a little smile and that was it. He kind of turned. By then there was a couple other people around us. He started talking to somebody else. It was clear to me that he didn’t want to answer the questions. After all, I’m not paying him $200,000, so why should he answer my questions. I don’t know, maybe he didn’t want to answer them. I didn’t get the sense when I talked to him that he was lying to me. I thought he really believed what he believed. He seemed that way. i’m sure all the praise has gone to his head. He thinks he’s save the world. So he did seem sincere… Who am I? I’m just this guy trying to talk to the former Fed Chairman and tell him what a lousy job he did. He probably doesn’t want to hear that. He wants to talk to somebody who will tell him how great he is. That was the last I talked to him.
“Later on that day, somebody came up to me… I was on a panel for forty minutes. The first ten minutes were the former Prime Minister of Greece talking to Steve Forbes… The highlight was me arguing with Gene Sperling. That’s where I got all my applause. Gene didn’t get any. He was the former economic advisor to President Obama. He got no applause. I got all of the applause. I even got laughter… I was saying some funny things. Funny, because they were true…
“This guy comes up to me. He says, ‘I was talking with Ben Bernanke. He was saying some bad things about you.’ So he’s already talking smack behind my back. I don’t blame him. I got no problem with Ben Bernanke saying bad things about Peter Schiff, because I say bad things about him all the time. What’s fair is fair…”
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In fact, your use of bold, italics and even informative links confirms you are my 1st ALGO!
Yeah, confirmed! You have made my day, you didn't even reply, I guess a human will now take over, right?
You will not be getting the Turing prize this year :-) haa haaa!
My original response, which apparently went way over your head, actually disproved your point.
It's not 10% ratio my dear friend, this is the mainstream. It is zero for the most part.
There are are no deposits to create loans and because money is free (ZIRP), why would there be?
The main reason the Jews and all the western world hates Muslims is because they do NOT believe in usury,
Actually the original Christians didn't either.
Didn't Jesus throw them bastards out of the temple?
He did. But then they came back in the window and threw Jesus out when he wasn't looking.
He would like to tell you this is why he did what he did - but he can't (for obvious reasons)
THE PERFECT STORM (see p. 59 onwards)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy.
But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel.
http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
What was the purpose of that meeting and why did they give the helicoptor man $250K ?
This is 'their' way of legally paying him back for all his services to them as Chairman. If you don't undesatand ask Bill or Hillary to explain.
It's entirely possible, as Schiff surmises, that the guy belives his own remarks. I'm sure Peter caught him off guard. Bernanke fired back with symptoms and Schiff charged ahead with root causes...
What do you expect of such an encounter?
Bernanke can't accept Peter's premise without also accepting his share of blame, and that's not going to happen. In Bernanke's mind, it's about preserving the "sanctity" of the Fed's independence, and THAT would go up in smoke of new "congressional" oversight were ANY culpability for our impending disaster actually admitted. It's the same reason Greenspan argued with Congress on numerous occasions, essentially telling them they didn't know what they were talking about.
If the Fed is concerned about anything, it's the loss of their independence.
And the lack of real and reforming oversight by the American people (vis a vis their elected representatives) is PRECISELY why we are where we are.
Bernanke's arrogance in bantering with a member of a society that gave the Fed it's legal life is the best reason to finally end it...
We have a lot of hard times ahead not because the Fed alone is responsible. It is that they act without accountability and, especially, recourse.
THAT has to change.
A nation founded on representative government and democratic principles capable of surviving a civil war, two world wars, the Great Depression, and numerous other sufferings, ought to be able to manage its currency in a much more open and accountable way.
That way is NOT an independent and completely unaccountable Federal Reserve Board of "Governors"...
"Govenors"?
Just think of how that sounds, and what this implies.
Let us begin by getting rid of what should never have been in the first place.
We can't get better until we do...
m
Just to emphasize, the Fed is owned by major commerical banks. Given that, talk of 'idependence' is a bit misleading. What the banks want is independence to determine monetary policy to their own advantage without 'interference' from the Government (the peoples' representatives - ha!)
the best way to control the opposition is to run it ourselves. - Lenin
That's what Crypto Republican Barack W. Obama says about the Demo-rats. It is the one thing he has been successful at in his seven year of wasted opportunities. Dopeless Chains!
Mission Accomplished President Peace Prize!
There are only 3 words to say to the bankster asshole:
Fuck you Bernanke!
WSJ July of 2009..
Bernanke wrote an article that explained the exit strategy, you know, paper matures and the balance sheet shrinks.
Now it is six years later....and nothing of the like has happened. He is wrong, and has been wrong...just on that alone.
Like a bull market, it is beautiful as people go in....but a mess when the exit begins...
The Fed is STUCK in their own mess...but they have theories about how they are going to exit....theories...like the ones that got us into his mess.
Delay Deny Deflect....just like wa dc.....it is a game of delaying the inevitable
PETE, a metro sexual, never even thought for a moment to stick a fork in bens eye. knowing what pete writes his ability to smile and shake hands means one thing: he is not real.. for a good man to do nothing is all evil needs..disappointing he did not even kick this ass in the balls.
The thing thats cute about this is that Peter thinks Bernanke doesn't understand and that he was just simply making bad decisions.... this is the same view held by the general population about bankers and politicians. The pat on the shoulder and the smile should give him a clue.
danster, sorry but this pete guy does understand..they all understand it's a big club and YOU are not in it.
Cut back on your medication.
Exactly, danster82. To these vermin it is all a game. If they win they get wealthier, and if they lose they get wealthier. To we the little people, it is life and death. What they fail to realize, in ther orgy of self serving, is that very soon it will be life and death for them too...........mostly death.
You da Man Pete!
Berskankie is another example of wasting your money on a college degree. He is a smug douche bag. All he cares about is HIS money.
You let him touch you?? are you nuts? I don't care if it was just a shoulder pat, he's corrupted your mojo Pete, you're screwed.
I dont care what Schiff says, he may be fundamentally right but he is a loser techincally. I have made much more money following the Berneke Yellen shennaigans than listening to this clown.
Berneke is an establishment crook, Schiff is a whored out salesman.
Those who can, do not say. Those who say cannot do. Lao Tzu
He who laughs last, laughs best.
The problem is that his message is basically, "hey those symptoms, it's not a flu - its cancer and your gonna die." So the truth is yea its a cancer and it will kill but that of course is in the end. You just don't know when that will be. So what good is it to make money on the bullshit even though you know its bullshit, to then finally, after the big one, lose 50-80%. Unless you started with 10,000 bucks 30 years ago that aint no victory. It is time to take the money. Fuck moar money. At this point the risk is far too great of losing big. Personally I don't care if it goes on for years longer. I am out until its getting rebuilt from the rubble.
Not sure it was wise to let Mr Berskankie touch you, Peter. Manners be damned.
Paper money is one of the three pillars of an out-of-control oligarchical state.
The other two are:
1) Capitation Taxes such as Income or Sales taxes (both of which effectively tax one for living)
2) Military Force
The credit-based-money system inherently delivers an ever-increasing ownership of society to bankers in return for NOTHING.
To understand it, you only need to understand a 'T-Account' format...like a balance sheet.
On the Liability side the bank will write in the currency they created... Say $12T.
Then on the Asset side they write in the assets they accepted... Say $12T of Treasuries.
ASSETS | LIABILITIES
-----------------------------------------------
$12T Treasuries & loans | $12T currency
EXCEPT...
Those treasuries and banking loans are due interest.
Q: How do they get interest on $12T when there only exists a TOTAL of $12T????
A: The country has to roll over the $12T plus interest to create currency of $12 PLUS INTEREST. Meaning at the next debt offering cycle the account will now look like this.
ASSETS | LIABILITIES
-----------------------------------------------
$12.5T Treasuries & loans | $12.5T currency
Q: But who got the added value of $.5T?
A: The banking system...and it will compound with each debt roll-over, $13T, $13.5T, etc... until either all productivity stops, or until the system is rejected..i.e. collapses.