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Bernanke: The Courage To Print - Reading Between The Lies

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Submitted by Doug Noland via The Credit Bubble Bulletin,

Dr. Bernanke has referred to understanding the forces behind the Great Depression as the “Holy Grail of Economics.” I believe understanding the ongoing Bubble period offers the best opportunity to discover the “Grail.” When the Washington establishment believed THE Bubble had burst back in 2000/2001, the leading academic espousing inflationism was beckoned to Washington to provide cover for the Fed’s experimental post-tech Bubble reflationary measures. He first served as a member of the Board of Governors of the Federal Reserve System (2002), before being appointed chairman of the President’s Council of Economic Advisors (2005). From the day Ben Bernanke burst onto the scene in 2002, I’ve taken strong exception with his economic doctrine and analysis.

I have yet to read his new memoir. However, I listened attentively this week as he blanketed the airwaves. As I’ve done on occasion for going on 13 years now, I highlight some of Bernanke's thinking (and provide brief comments).

CNBC’s Steve Liesman: “His new book, ‘The Courage to Act – A memoir of a Crisis and Its Aftermath,’ details what he calls ‘the darkest days of the financial crisis when’ he quote ‘stared into the abyss and the behind the scenes struggle to enact innovative policies that he believed saved the economy’… Are you surprised and are you disappointed that after six years of zero percent interest rates – a four and one-half trillion dollar balance sheet – that this economy still struggles with 2% growth?”

Bernanke: “The low growth is coming not from the recession, per se. We’ve come back quite a bit. Unemployment is down to 5%. So we’ve come pretty close to full employment. The slow growth is coming from slow productivity growth. Output per worker has not been growing quickly, and why that’s happening is not totally understood. I don’t think it has much to do with monetary policy. It has to do with the waves of intervention. We saw slowing of productivity growth even before the crisis. So I think that’s part of it. But clearly one of the issues is that we’ve been relying too much on the Fed. The Fed has been the only game in town. It’s been doing most of the policy heavy lifting for the last few years. We need to see more action from other policymakers.”

(Noland: Experimental ultra-loose monetary policies and activist market intervention – along with attendant serial financial Bubbles – over the past twenty years have had a profound impact on the underlying economic structure. These Bubble periods have witnessed profound economic maladjustment that is certainly a major factor behind poor productivity and growth dynamics).

Liesman: “But when you think about six years of zero percent, wouldn’t you have expected that at some point in time that there would have been this pop – that we wouldn’t be doing what we did, for example, in the first quarter 0.6% growth, and concerns almost every quarter that we’re going back into recession.”

Bernanke: “Well, in a slow growth low real return economy – not just in the U.S. but everywhere. And compare the United States with Europe, compare us with Japan and other industrial countries – we’ve been making more progress. I’m not saying things are great. I don’t mean to say that at all. But monetary policy can only do basically two things: It can keep inflation low and stable and it can help the economy come back from recession. And both of those things are happening. More growth has got to come from productivity; it's got to come from capital investment. Those things need some help from other policymakers.”

(Noland: At this point, the entire global economy has been badly impaired by years of flawed monetary management, recurring boom and busts and unprecedented distortions and imbalances. Inflationary monetary policy can inflate asset prices and widen the divergence between inflated markets and deflating economic prospects. Moreover, inflationary monetary policies are especially destabilizing after an extended period where financial returns outperform real economy returns.)

CNBC’s Becky Quick: “Is that a suggestion that this is kind of the new normal. It’s going to be very difficult to fix this.”

Bernanke: “If you look around the world it’s not just the United States. Real interest rates are low everyplace. And we’ve got what I used to call ‘the global savings glut.’ There’s a lot of savings looking for return. There’s not that much in terms of really high return investments available. I think that’s not Fed policy. I think that’s just where the world is right now.”

CNBC’s Joe Kernen: “It could be QE over there too, though.”

Bernanke: “Well, if it were true – if there were lots of high return investments available then you’d be seeing more capital investment than you’re seeing. So I don’t think it can be QE, no.”

(Noland: Having argued against the “global savings glut” thesis throughout the mortgage finance Bubble period, its reemergence is beyond annoying. The paramount issue was never some mythological surplus of “savings,” but instead excessive expansion of Credit, “money” and leveraged speculation.)

Liesman: "So would you weigh in on what Stan Fischer spoke about just last Friday, which is this notion of - should monetary policy be used to create or to worry about financial instability, in the sense that you would raise rates now in order to ward off some of the excesses that Joe was talking about?”

Bernanke: “Well, it should be a last resort because you have to raise rates an awful lot, for example, to have the kinds of effects Joe was concerned about. And we don’t even know very much about what the linkages are. I mean, arguably, if the economy is really weak because you raised rates too soon that could cause financial problems as well. So the right thing to do first is do everything you can on the regulatory, supervisory, macroprudential front. And then, if nothing else works, then you can think about monetary policy. But it's really self-defeating to use the wrong monetary policy…”

(Noland: It’s the same failed asymmetrical policy approach – only much grander – that led to serious market Bubble distortions for more than 20 years now. The Fed slashed rates and added massive liquidity during the 2008/09 financial crisis. And during 2013 and 2014, the Fed added $1.6 TN of additional liquidity in a non-crisis backdrop. The Fed has gone so far as to assure the markets that it will “push back against a tightening of financial conditions” – i.e. a “risk off” market backdrop. On the other side of the equation, the Fed supposedly has macroprudential tools it is to employ to ward off financial excess that risks financial instability. Essentially, the markets fully anticipate the use of “whatever it takes” QE in the event of faltering markets. On the other hand, macroprudential to counter market excess has zero market credibility.)

Liesman: “Except there’s an assumption in there, which you've already proven wrong and you were at the helm when this happened, which is you missed the bubble. You missed it - '07. Eventually, as the book chronicles, you come to see the seriousness of what's happening. What assurances can you give anybody in the public that the Fed will see the next bubble coming?”

Bernanke: “Well, you can't. You can't. But it wasn't - I think that misrepresents what we saw and what we didn't see. We knew house prices were really high. We knew that subprime mortgages were a problem. What we didn't see was the extent to which the financial system was endangered and driven into panic by that problem. Subprime mortgages were a relatively small asset class. But what happened was that they created distrust by investors in all different kinds of securitized assets - and caused a panic that caused money being drawn out of all different kinds of assets. And that panic is what really created the crisis. So it wasn't the fact we didn't know house prices were high. We knew house prices were high. But what was the problem was the weakness in the financial system itself. And there, the first line of defense has got to be more capital, tougher oversight. Those sorts of things to make the system more resilient to whatever shock comes along.”

(Noland: Subprime was definitely not the fundamental issue. Instead, mortgage finance Bubble excesses had seen almost a doubling of mortgage Credit in six years. Bubble distortions had created historic mispricing throughout the Credit market, certainly including Trillions of MBS, ABS, agency securities and corporate debt. A Credit boom had inflated asset prices, perceived wealth, spending, corporate profits and incomes. Over years the Bubble had become deeply systemic. Inevitable risk aversion and a tightening of financial conditions at the Periphery – subprime – unleashed contagion that would ensure a bursting of the Bubble at the Core (home to Trillions of mispriced securities and derivatives). Market panic, deleveraging and an abrupt collapse in Credit growth almost led to system collapse.)

Quick: “We had one market watcher who joined us earlier this morning, Mark Grant. And he suggested that the Fed should sell down or let run off some of its balance sheet - a trillion dollars. Let that run off before they raise interest rates. What do you think about an idea like that?”

Bernanke: “Well, Joe had an earlier comment about how are we going to get out of $4 trillion, that kind of thing. That's actually not a big issue. You know, when the time comes, the Fed is just going to let the balance sheet run off. And that's pretty straightforward. I don't think that's going to create any particular problems. But I think that the concern is that they have less knowledge about how that would work; how that would affect the markets than they do about how short term interest rates would. And so the plan - and the Fed has been very clear about this, is to begin by raising short-term interest rates, which they can absolutely do, even if the balance sheet is still $4 trillion. And then, if the economy is still making forward progress then they can stop reinvesting and the balance sheet will passively run off over time.”

(Noland: Shrinking the Fed’s balance sheet is a big issue. When the Fed articulated it’s so-called “exit strategy” back in 2011, I titled a CBB “No Exit.” The Fed’s balance sheet has more than doubled since 2011. I believe the odds that the Fed again doubles its holdings are significantly greater than those that it will shrink its balance sheet in half.)

Bloomberg’s David Westin: “Monetary policy versus regulatory functions for the Fed, and you talk – page 92 I know it is – you talk about the fact that monetary [policy] wasn’t really the approach that needed to be taken when it came to the bubble in mortgages. And you say in a 2002 speech, ‘financial regulation supervision should be the first line of defense against asset price bubbles and other risks to financial stability.’ Has that been corrected now? There was a regulatory fail, wasn’t there that led to this?”

Bernanke: “Yes, absolutely.” …“So I think the critique of the Fed prior to the crisis – I think a lot of it was focused on monetary policy. People who have looked at it carefully, generally agree that monetary policy was not the main reason for the housing bubble. But one way the Fed was responsible was with other regulators that didn’t do enough to prevent the bad mortgage lending. And there’s a lot of reasons for that. One reasons was that there was this very strong political support for subprime lending because it was creating home ownership so broadly. So I thought that was the main…”

(Noland: I have “looked at it” quite carefully. Monetary policy was indeed the main reason for the mortgage finance Bubble. There is no way mortgage Credit – especially risky loans – would have continued expanding rapidly for years had the marketplace not been convinced that the Fed would aggressively backstop marketplace liquidity and ensure there were no financial crises or severe recessions. The Greenspan/Bernanke puts were instrumental in what became essentially insatiable market appetite for high-yielding MBS, ABS, CDOs and other derivatives.)

Fox’s Maria Bartiromo: “What do you say to those critics now, so many years later who everybody now can judge you, and they judged you from the moment we sort of got to dry land, what do you say to them who say, ‘look, we shouldn’t be bailing out anybody, you guys bailed out everybody, and that’s not the way the Constitution should go, that’s not democracy – that’s not Capitalism?’”

Ben Bernanke: “Well sure. Somebody once said that 'Capitalism without bankruptcy is like Christianity without hell,' basically. You need to have market discipline and all that. But in the middle of the most intense financial crisis in the history of the United States – maybe the history of the world – we had to do whatever we could to keep the system from falling apart. And that’s what we did. And, if anything, the effects of the financial panic on the U.S. economy were even bigger than I thought. And I was very much concerned about that. Now, once the crisis was over, absolutely, everything we could do to make sure it didn’t happen again. To make sure banks are sufficiently well capitalized. That they’re not going to be too big to fail. All those things are really important. But in the middle of a crisis you can’t do that.”

(Noland: I argued at the time of the crisis that, of course, policymakers would not allow the system to collapse. But I also warned against actions that carried a serious risk of inflating an especially dangerous Bubble at the heart of “money” and Credit. By no later than 2011, the Fed needed to have taken steps to nudge the financial markets back in the realm of “market discipline and all that.” Rather, it did the exact opposite. Pushing experimental central banking to “open-ended” QE in 2012 was a monumental mistake. Further delaying “normalization” and telegraphing a willingness to “push back against a tightening of financial conditions” in 2013 only compounded the error. Bank capital is not at this point a leading issue – not with tens of Trillions of securities mispriced these days on a global basis.)

Fox’s Greta Van Susteren: “Was this a fun job being chairman of the Federal Reserve?”

Bernanke: “Well, it was an interesting job, that’s for sure. As an economist, I sure learned a lot. But I didn’t really bargain for having history’s greatest financial crisis and deep recession to deal with. No.”

(Noland: “History’s greatest financial crisis” is a stretch – expedient used to rationalize what I believe history will eventually judge as disastrous inflationary policies. Besides, he should have been prepared. Dr. Bernanke, after all, was the Fed governor espousing “helicopter money” and the “government printing press.” The proponent of such radical monetary management should have been on guard for what evolved into relatively conspicuous financial and economic excess. The crisis was predictable.)

Van Susteren “Were there nights in 2008 where you couldn’t even sleep? Were we on the cliff?”

Bernanke: “Absolutely. We are on the cliff and I was in my office on that red sofa trying to stay awake and be on the conference calls. It was a very, very tough time. Particularly in about September and October of 2008.”

The Wall Street Journal’s Jon Hilsenrath: “I want to talk to you a little bit about inflation. You’ve said before, all the way back to your earlier writings on Japan, that a central bank can create inflation if it has the will to do so. Inflation in the United States has been running below the Fed’s 2% target for more than three years now. How do you explain that and has the Fed not done enough to create the inflation that it’s supposed to create?”

Bernanke: “Well, a more accurate statement about creating inflation would be that ‘so long as fiscal policy is at least reasonably cooperative.’ And throughout this past few years, fiscal policy has been either restrictive or at best neutral. So that has been a bit of a drag on that side. The Fed’s doing what it can to get inflation back up to target. But there are a number of things going on: First of all, is the fact that the recovery has been relatively slow and so slack has been absorbed at a reasonably good pace, but probably there’s still a bit of slack left. And secondly, we’ve been hit with what I guess you can call reverse supply shocks. In the seventies we were worried about big increases in oil prices. Now we’re seeing declines in oil prices and a strengthening of the dollar. Those things are depressing near-term inflation. It’s only a longer-term issue if they lead to inflation expectations beginning to move down. And I think there is some uncertainty about that as well. So, between remaining slack and global influences like commodity prices, I think that explains where we are. But getting inflation back up to 2% is a critical thing to accomplish. It’s really at the center of the debate of what the Fed should be doing going forward.”

(Noland: The world would be a much safer place if central bankers accepted the reality that they do not control the nature of inflationary effects. And this would not change if monetary and fiscal polices were orchestrated in tandem by a single central committee.)

Hilsenrath: “You describe in the book how you came to Washington a Republican and left public office an Independent. What changed in the process?”

Bernanke: “I didn’t really change. The political environment changed. I’ve always been moderate in my inclinations. As an economist I was very market oriented, so that put me more on the Republican side. But I was very unhappy with the big increase in partisanship in Washington – the inability to get things done and the increasing influence of the far right and far left in the debates, which was in my view, it’s fine to bring in different points of view, but if it means you can never get anything done – that you're basically going to be focused on shutting down the government –those kinds of things. I thought that was very counterproductive. And so in particular, I was unhappy with both extremes, but on the right – the populist Republican perspective was very anti-Fed and very opposed to what we had done. Obviously, it would be a little inconsistent for me to support the view that went against what we had done…”

(Noland: This is another one of those instances where the monetary administrators somehow remain oblivious to the profound effects of their inflationary monetary mismanagement. As I’ve argued over the years (paraphrasing the late Dr. Kurt Richebacher), the only cure for Bubbles is to not let them inflate. Bubbles, after all, are mechanisms of wealth redistribution and destruction. A burst major Bubble will leave in its wake tremendous social and political tension. These serial booms and busts have inflicted terrible damage upon our great country – economically, socially, politically and geopolitically. Indeed, inflationism is the leading cause of our troublingly divided country – as well as an increasingly fractious world. It was an issue near and dear to the hearts of our nation’s Founding Fathers. And this type of experimental inflationary monetary policy should never have been decided by a small group of unelected officials. One cannot overstate the ramifications and consequences of printing Trillions of dollars and grossly manipulating the financial markets.)

Hilsenrath: “Wasn’t the global savings glut a precursor to the housing bubble?”

Bernanke: “My thinking about this now is that the global savings glut probably kept rates a bit lower than they otherwise would have been. But my thinking about this is a little more complicated now. I think that the sequence of causation was more like this: There was this huge global savings glut – and there was this huge demand for liquid, safe assets. There were not enough Treasuries to go around. And so Wall Street very creatively began to create these supposedly safe assets, which were in fact the AAA tranches of securitized securities that inside included lots of different kinds of credits, including subprime mortgages, for example. And I would argue that the securitized credits were in fact one of the sources of the crisis – I think everyone would agree with that actually. But one of the reasons they were created in the first place in such large amounts, was it was Wall Street responding to the global demand for safe assets. And I think that was one of the mechanisms which the savings glut generated the risky situation that ultimately led to the crisis.”

(Noland: Actually, Wall Street was responding to what was at the time insatiable demand for perceived high-yielding safe – “money-like” assets. I invoked “Moneyness of Credit” throughout the Bubble period. Importantly, however, Dr. Bernanke’s thinking is flawed as to cause and effect. Global liquidity excesses were the consequence of rampant U.S. mortgage Credit growth and speculative leveraging, with attendant trade deficits and financial outflows inundating the world with dollar balances. Much of this dollar liquidity was then recycled back into the U.S. Credit system through the purchase of mortgage-related securities - MBS, ABS, GSE, CDOs and other derivatives. It was a historic episode of self-reinforcing Credit excess and market mispricing that were certainly discernable in real time.)

Hilsenrath: “Should we be worrying about the risk of another bubble given everything you’ve just described?”

Bernanke: “One thing we learned is that you should always be worrying about financial risks. I just want to say, while I was chair the Federal Reserve made some very substantial internal changes to create new capacities – including what is called The Office of Financial Stability. Which means relative to before the crisis, the Fed is now putting huge amounts of staff resources into monitoring the whole financial system…”

Question from Twitter: “Does chairman Bernanke think there are asset bubbles in the global markets now?”

Bernanke: “I don’t see any obvious major mispricings – nothing that looks like the housing bubble before the crisis, for example. But you shouldn’t trust me. What you should do is make your own judgments about individual asset prices. And what the Fed is doing of course is again monitoring very closely all of these different asset categories and trying both to determine if there is some downside risk and, if the downside risk occurs, what would the implications be for the broader system. One of the things I learned from our experience in the crisis was with respect to the housing bubble, the Fed spent a lot of time debating ‘Is it a bubble – isn’t it a bubble? If it is a bubble how big is it?’ That was the wrong way to think about it I think. The right way to have thought about it I think: ‘We don’t know if it’s a bubble. It might be. If it bursts, what’s the worst that can happen?’ And I think that looking at the worst-case-scenario was the right way to do it and the Fed didn’t do enough of that…”

Hilsenrath: “That implies that, the Fed this time around, if it faces some set of questions about whether there’s a bubble will be potentially more proactive either using regulatory tools or monetary policy to address it. Do you think that’s the case?”

Bernanke: “Based on the experience of the crisis, I think if anyone needed convincing that financial crisis or large speculative bubbles are dangerous I think they should be convinced now. So yes, so the Fed has changed its perspective. Formally speaking, the Fed has switched from being a so-called microprudential regulator that’s focused on a narrow set of institutions and markets – to a macroprudential regulator which means that in addition to looking at individual firms and markets is trying to assess the stability of the overall system. And that’s critical and to the extent there are risks that are apparent – either in terms of the structure of the system or in terms of building mispricings or other problems, the Fed needs to be proactive working with other regulators.”

(Noland: The Fed needs to extricate itself from manipulating the financial markets. It needs to end backstopping market liquidity. It must never again print Trillions of new “money” out of thin air. Because so long as the marketplace perceives that the markets are "too big to fail", there will be speculative excess, major securities markets mispricings and Bubble fragilities. No one – average investor or sophisticated financial operator – has a clue as to the degree Fed policies have distorted asset prices. A credible macroprudential regulator would not promote securities market inflation. And when it comes to courage, history has shown it takes tremendous courage to halt monetary inflation.)

*  *  *

It was a brutal week not only for the bears. Hedging strategies came unglued. Long/short strategies suffered in the chaos. Trend-following momentum strategies were crushed by abrupt reversals in equities, Credit, currencies and commodities. In short, there appeared to be a lot of panic buying and considerable mayhem.

Over recent years, painful short squeezes often provided lift-off for another bull market leg higher. To be sure, once squeezes gain a head of steam, predicting when they’ve run their course tends to be tricky business. But I’m sticking to the view that the global Bubble has burst and contagion has set its sight on the Core. Despite this week’s powerful squeeze, I don’t believe markets have overcome deleveraging/de-risking pressures. I expect wild volatility to continue to weigh on leveraged currency “carry trades.” I would be surprised if the hedge fund community doesn’t suffer year-end outflows. And I certainly don’t think we’ve heard the last of China’s financial and economic woes. Yet in these unstable markets, anything can happen.

 

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Sun, 10/11/2015 - 13:20 | 6655483 snodgrass
snodgrass's picture

Jews are the world's biggest liars. No matter how they lie, kill, cheat and fail, it's always someone else's fault or the result of anti-semitism.

Sun, 10/11/2015 - 13:45 | 6655553 Fish Gone Bad
Fish Gone Bad's picture

The Fed's hot money made pretty much everything worth buying more expensive. 

Sun, 10/11/2015 - 14:19 | 6655657 NidStyles
NidStyles's picture

He's a Jew, his interests are Jewish ones, when he speaks, he's speaking to his fellow tribe member, not us.

Sun, 10/11/2015 - 17:02 | 6656092 SickDollar
SickDollar's picture

this joo is trying to cover his ass just like his predecessor nicknamed  "Maestro"

 

Sun, 10/11/2015 - 20:27 | 6656685 Big_Hitman
Big_Hitman's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.wallstreet34.com

Sun, 10/11/2015 - 13:20 | 6655485 Duc888
Duc888's picture

 

 

The only thing the Fed can do is make more debt.

Sun, 10/11/2015 - 13:34 | 6655517 J J Pettigrew
J J Pettigrew's picture

The picture was mounted on the wall.

Then it fell..

Then Bernake picked it up and held it up in its old place and said 'there, just as before."

THen Bernanke told Janet to hold the picture up against the wall in the old spot.  "there, just as before."

Except the picture used to stay mounted on the wall without someone (the Fed) holding it up against the wall and telling

everyone...."all is fine. Just as before."  Not really is it.??

Their "fixes" have broken the system..... and next will be they declaring the "system" broken....SEE! Its broken!

Nice work by the Central Planners operating under "presumed knowledge" and theories.....

Sun, 10/11/2015 - 13:46 | 6655555 A Lunatic
A Lunatic's picture

The Central Planners are operating a system that benefits a select few. Their contradictory narrative merely serves to confuse the masses to the point they must rely on those same 'experts' to define the economy. The fact is, were the central banks eradicated, the economy would get real honest real quick and the 'complexity' of things would become quite simple......

Sun, 10/11/2015 - 14:09 | 6655615 jmeyer
jmeyer's picture

We need a central bank but it should be one owned by the US Federal Government and not by the banks.

Sun, 10/11/2015 - 15:24 | 6655847 snodgrass
snodgrass's picture

Like the people who run the govt. won't use it to their advantage like they are already doing? Pleeze. It's a collaboration between the bankers and the govt.

Sun, 10/11/2015 - 22:26 | 6657004 PlayMoney
PlayMoney's picture

its basically owned by he govt now, just not on paper

Sun, 10/11/2015 - 14:02 | 6655531 kevinearick
kevinearick's picture

bring on the next wizardry theory...

Your function is to marry, have children and work. The communist function is to gang up, to divert you, into a gang. Whether it’s a public, private or non-profit corporation, one of their streets or a prison, the process is all the same, except for the dress. The trap, like the universe, only appears complex because it has been built over thousands of years.

In any and all cases, the prison is virtual, a function of false choice, breeding out individual initiative. In the empire, you compete on a scale of stupid, willful ignorance, which its infrastructure reflects. You can replace an empire with artificial intelligence, exactly what the critters are doing to themselves, but you cannot replace a cogent thinking human being with a robot.

If you look back in the record, you will see that the computer algorithms are no match because they are willfully blind, and the only way to make them appear intelligent is to dumb down the population under their control, which is nothing new for an empire. They all begin by issuing anonymous cash and they all end by eliminating it, over generations of robots who forget that labor supplied the capital for initiation. Counterweights have their uses, until they don’t.

Empires have three modes in their compiler – denial, anger and depression. Generally, females employ denial as a tool, so the communists, who have subjected themselves accordingly, subject females accordingly. For males, it’s anger. When married, the only possible outcome is depression.

In the aristocratic ‘elite,’ denial marries denial, the only possible outcome of which is transsexual and sociopathic behavior, glorified in the media, for replication. Just because the counterweight is subject to derivative physics doesn’t necessarily mean that you are. Physics itself tells you that for derivative physics to exist, integral physics must also exist, in a separate universe relative to the derivatives.

You can go back in time, and stay if you choose, but no gang can move forward in time. The trick of course is to separate, thread the needle, and weave forward, leaving the derivatives behind, which the universe will recycle in its own good time. Real life is far more interesting than anything you will see in a media theater, created by a computer.

Your spouse is an investment in your children, and your children in that investment must recognize that they are one day going to be the parent, and prepare accordingly, of their own accord, which is why the communists are so determined to replace marriage, with its own Foundation, subjecting your children to public 'education,' which fails every time, by design. The combination you employ for ignition depends upon the propulsion demand, where your children want to go.

Without intelligent labor, America is just another ghetto, in a competition with other ghettos, which are already far ahead, in a race to the bottom of the pit, head first. But follow that cable if you like.

 

Sun, 10/11/2015 - 13:37 | 6655534 JamaicaJim
JamaicaJim's picture

Fuck You Shalom..you twisted cunt

Sun, 10/11/2015 - 13:39 | 6655538 adonisdemilo
adonisdemilo's picture

What do you mean " no one has a clue how much the FED has distorted markets". Of course we know you fucking moron, and we know where you live as well.

Sun, 10/11/2015 - 13:41 | 6655544 A Lunatic
A Lunatic's picture

Unbelievable the lies these bastards tell themselves.........

Sun, 10/11/2015 - 13:49 | 6655562 Racer
Racer's picture

Why anyone would want to use this book for anything but emergency toilet paper is beyond me

See a collection of his idiocy:

http://dailybail.com/home/a-movement-by-the-people-to-prevent-the-reappo...

Sun, 10/11/2015 - 14:14 | 6655633 nickels
nickels's picture

---Final question Ben, -- What do you expect American investors to do when they finally realize that you've been blowing smoke up their asses?

Sun, 10/11/2015 - 14:18 | 6655648 jmeyer
jmeyer's picture

Bernanke is making a rather weak attempt to deflect the Fed's responsibility in creating this mess. The Fed never trusted politicians and they were right but no one made a serious attempt to unite the pols with the central bank. The Fed has to be the one who takes the responsibility to fix things. Bernanke needs to offer some solutions rather than excuses and that would help unite the pols with the Fed.

Sun, 10/11/2015 - 14:21 | 6655666 the grateful un...
the grateful unemployed's picture

i read Noland every week, he might get more exposure if he wanted it. if you want to lay this at bernankes doorstep you have to ask why didnt you raise rates in 2008, to reflect market risk, which would be the proper interpretation of the phrase maintaining a stable market. the general public interjects bernanke and yellen as though they were siamese twins, which i suppose they are, and if the NIRP group is correct they will lower rates again, and they wont wait for the crisis to develop. their endgame isnt the same as yours, they see one central bank for the planet, the IMF will roll out planetary shares, and all economic growth will be managed by the overlords, because obviously the EMs cant do it themselves. two thoughts come from this, the Fed is not the US central bank any longer, and the Fed is not a bank at all. sure the Fed is a political appointment, Bush 2 was a sort of visionary on that account, he had talks on the Amero, he was the singualrly most well defined globalist of any president in modern times, which is why he took Bernanke, now at some moment a president may decide to pull in the reins and moderate the feds path to global economic domination and leadership, but who the hell would do that? get used to Planet Janet, she's the future, and unless the US elects someone like Ted Cruz the global economic model is going to go forward.

Sun, 10/11/2015 - 16:20 | 6655994 hound dog vigilante
hound dog vigilante's picture

Cruz/Rand/Carson/Donald/Bernie... it'll never happen.

Expect Bush/Rubio/Fiorina/Clinton/Biden.

 

Because it isn't an election - it's an appointment... just like Greenspan/Bernanke/Yellen.  These are corporate/banker puppets appointed to perform the necessary kabuki and lie.

Yet we buy the tickets and watch the show, because to revolt would be to admit that we've been duped... and our pride/ego won't allow such an embarrassing admission (cognitive dissonance), so the charade will continue until the final/ultimate collapse.  The comfort/entitlement of modern man has crippled his capacity for courage.

Sun, 10/11/2015 - 16:48 | 6656062 Sorry_about_Dresden
Sorry_about_Dresden's picture

but who the hell would do that?

Any elected official who goes against the frbny is a dead man. 

 

 

Sun, 10/11/2015 - 14:35 | 6655730 luna_man
luna_man's picture

 

 

Do you really think this CRIMINAL deserves an hearing?

 

make an example of this CRIMINAL...with lots more to follow

Sun, 10/11/2015 - 14:40 | 6655737 pitz
pitz's picture

Repeat after me:

 

5% is not near full employment!

 

 

5% is not near full employment!

 

5% is not near full employment!

5% is not near full employment!

 

Not sure why such delusional nonsense of 5% being "near full employment" keeps coming out of the 'economist' community.  Full employment is literally 0% unemployment, ie: everyone who wants to work is working.  The economy was down to 2% official unemployment at the apex of the late 1990s tech bubble, yet there was no outbreak of inflation.  Zero unemployment simply means that employers have to start getting creative in adopting technology and providing incentives/benefits to employees to work there.  You know, like treating employees with respect, providing proper offices and facilities instead of cube farms, proper compensation, respectful treatment, etc.  If economists actually believe that 5% is nearing full employment, then no wonder the economy has been so badly mismanaged through Fed policy over the past few decades. 

 

 

 

 

Sun, 10/11/2015 - 14:49 | 6655762 Ban KKiller
Ban KKiller's picture

FED has public "mission statement" and a private "mission statement". The private mission statement is working well for the oligarchy/plutocracy, of course. Serfs? Not so much. 

Their public mission (statement) has failed and continues to fail. As the FED is above the law, too fucking bad! 

Tick, tock on the derivative bomb? (Please, FBI troll, don't contact me)

 

Solution? As always, it is to be independant. IF they let you...

Sun, 10/11/2015 - 14:58 | 6655774 lester1
lester1's picture

Someone should have directly asked him how long has the Fed been buying stocks through their primary dealers in order to reverse massive selloffs like 2 Fridays ago?

 

Who else could pull off a +500 point reversal in just a few hours? I'm convinced the Fed was behind those rallies based on bad news?

 

The Fed needs to be audited !!

Sun, 10/11/2015 - 15:01 | 6655797 HoserF16
HoserF16's picture

Bernak is a Zionist Pig. I would like to see him Barbecued on an Open Pit with an Apples stuffed up his ass! Brilliant

Sun, 10/11/2015 - 18:41 | 6655981 Sorry_about_Dresden
Sorry_about_Dresden's picture

If his lips are moving he is lying. 

The slow growth is coming from slow productivity growth. Output per worker has not been growing quickly, and why that’s happening is not totally understood.

Total lie. Productivity shot up when 20 million people lost their jobs and corporations didn't replace these workers. Productivity gains are just now plateauing. All that talk about full employment is a fucking lie also. I have been looking for work for more than a year and there are no jobs.

 Bernanke has been deliberately sabotaging the economy by paying banks interest on their reserves held at the frbny. This makes the banks unwilling to risk lending to Main Street since parking the money at the frbny is risk free.Why is the frbny competing with job creators for these finite resources? The frbny is stealing from job creators!

Balance sheet of frbny in 1913 was zero dollars.

Balance sheet of frbny in 2015 is almost $4.5 trillion dollars.

Listed on their link as 4,446,747 millions of dollars.

http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab9

That cunt has been intentionally fucking up our economy to satisfy his evil proclivities. 


Sun, 10/11/2015 - 20:23 | 6656665 pitz
pitz's picture

I know engineers, yes, engineers, that have been looking for jobs for the better part of the past decade.  No bites.  No interest in hiring Americans to improve the productivity of the economy.  In the lack of interest in producitvity, nobody should believe that the labour market is anywhere near capacity. 

Mon, 10/12/2015 - 01:20 | 6657329 Sorry_about_Dresden
Sorry_about_Dresden's picture

I have BS chemical engineer, apply to 100 of jobs all over the world and Nada.

Bernanke is a rat fink.

Sun, 10/11/2015 - 18:36 | 6656297 yogibear
yogibear's picture

LOL, BS Bernanke is a liar. 

Any surprise?

Not a humble man. Disgusting.

Sun, 10/11/2015 - 19:45 | 6656537 moneybots
moneybots's picture

"No one – average investor or sophisticated financial operator – has a clue as to the degree Fed policies have distorted asset prices."

 

The DOW fell 90% from the 1929 peak to the 1932 trough.

 


Sun, 10/11/2015 - 19:49 | 6656548 moneybots
moneybots's picture

"Bernanke: “The low growth is coming not from the recession, per se. We’ve come back quite a bit. Unemployment is down to 5%. So we’ve come pretty close to full employment."

 

Bernanke sure can telll whoppers, can't he?

Sun, 10/11/2015 - 20:26 | 6656681 Clycntct
Clycntct's picture

Takes Splainn pretty fancy to make me believe Bull Sweet.

Sun, 10/11/2015 - 21:17 | 6656819 theyjustcantstop
theyjustcantstop's picture

the fd. has over extended their draining of the lower, and middle-class worker, 

those working, and making 6 figures are next to be drained.

I know public service employees making this and they think their insulated from any trouble job wise, and retirement wise, I tell them the tax base, were their salary comes from is being diminished.

then their retirement comes up, and I give them the good news there also, I say you do as I do, start with yourself, and work forward, when you come to the end, where's your pension invested, govt. bonds, "myra's", mmmf's which will be gated, the stock market ran by the fed., who work for international bankers to make as much money as possible for themselves.

govt, workers, and those who dependent on govt., need to read Americas 1933 default agreements, with the imf, one world bank, and the international bankers who took control of America, secured the gold #1, then shut down a very large portion of govt. agencies, their not a performing asset, their a liability, about $3-4,000,000,000.00 yearly.

this is why this political American govt. default bs is a dog, and pony show, the same people who forced America into default in 1933 owns america, they say when america is in default, and there's still a lot of assets to be drained before they'll force a default, and it will be a while, for one reason America is ,and can further self sufficiency, and not that well placed geo-politically, already bought off anyway, and if you think killing, or letting humans die will stand in their way, ask Libyans, Egyptians. ,Iranians, 1/2 of present eu, Ukrainians, Syrians.

it stuns me people call these former, and present polliticians, or high ranking officials in American govt. that open up and tell what really happened, and who was responsible in parts of the world, and america, heroic, then bad mouth putin.

Putin has forced out public the whole satanic Arab-spring agenda, which legitimizes the Ukraine junta. for those unenlightened.

he's the OWO enemy #1, you don't do, or go through what he has in his lifetime, and not know whats going on.

I make the comparison, putin knows where to be, and when, just as Americas cb's know where the markets are headed, by the minute.

 

 

 

 

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