This page has been archived and commenting is disabled.

"No Country For Old Men?" Bernanke Plan To Exterminate Savers Is Unsustainable

Tyler Durden's picture





 

Bernanke's recognition of his penalizing savers with low rates as an 'issue for people' sparked an interesting note from the WSJ on how sensible and stoic savers are being herded (unsafely) into risky investments. Bernanke's insistence that "our savers collectively have to hold all the assets of the economy and a strong economy produces much better returns in general" must be juxtaposed with comments from a money manager that "I don't think that's a fair-trade" for money intended to be invested safely. By removing the last shred of hope for a rise in savings rates anytime soon, the Fed is once again creating the potential for major unintended consequences as the 30% drop in interest income for US savers from the 2008 peak forces them to extend duration (TSYs), lower quality (corporate bonds), and/or increase leverage/risk (equities). One only has to look at Treasury yields, Muni yields, investment-grade bond yields, and now high-yield bond yields for how tempted investors (retail and professional 'insurance/pension' assets) have become to take their safest net worth asset (low risk liquidity) and expose it to the business/credit cycle and all its myriad event risks. While reducing the rate of savings might seem sensible for the short-term from the Fed perspective, it leaves a wholly unsustainable recovery (or bubble in who knows which asset class next) and as Nordea notes this week, based on their models, a considerably higher savings rate will be needed going forward (for any sustainability) even as 'saved money' is rotated into risk or spent on quality-of-life maintenance. Perhaps it is time for many to listen to the sensibilities of the WSJ's last (75 year-old) interviewee who notes "At my age, I can't be a risk-taker anymore" as maybe it is time to consider the reality of the recent good US data in relation to coinciding elements such as inventory build-up, plummeting household savings, and lower gas prices when adding to that risky investment.

Wall Street Journal: Itchy Investors Ramp Up Risk 

 Robert Marcotte can't afford to play it safe anymore. With interest rates likely stuck near zero for nearly three more years, the 61-year-old retired telephone-company manager is about to ramp up his holdings of stocks and municipal bonds, using money now at the bank in certificates of deposit.

 

"It gets me a little uneasy," says Mr. Marcotte. "Since I'm not working, I am very risk-averse, but still need to generate income."

 

...

The Federal Reserve is presenting a broad swath of conservative investors, from retirees and college savers to banks and insurance companies, with a tough choice: move into riskier investments or continue coming up short from low-risk investments that aren't even keeping pace with inflation.

 

...

 

The Fed has "removed the last shred of possibility that interest rates were going to revert to normal in the near future," says Johns Hopkins University economics professor Christopher Carroll.

 

...

In congressional testimony on Thursday, Fed Chairman Ben Bernanke acknowledged that low rates penalize savers. "We understand it's an issue for many people," he said. "That being said, our savers collectively have to hold all the assets in the economy and a strong economy produces much better returns in general."

 

...

 

The low interest rates of the past several years have taken a toll on U.S. savers. All told, Americans collected interest income from CDs, savings accounts, insurance products and other sources at a seasonally adjusted, annualized rate of $976 billion in the fourth quarter of 2011. That's down nearly a third from the peak rate of $1.42 trillion in the third quarter of 2008.

 

 

 

 

One worry is that some investors will take on risks they aren't prepared to handle.

Brent Burns, an investment manager who builds bond portfolios for financial planners, says that since the Fed announcement he has fielded a flurry of questions from advisers considering high-yield and international bonds, and real-estate investment trusts. "I don't think that's a fair trade" for money intended to be invested safely, he says.

 

...

It isn't just retirees who are taking on more risk. Sotirios Keros, a 39-year-old pediatric neurologist in New York, says he plans to shift his emergency reserve to a long-term municipal bond fund when his CDs mature this summer. "I would still like to keep that as liquid as possible and as risk-free as possible, but I'm not really happy with the available options," he says. The Fed's decision makes it clear that "there's no value in waiting" for higher rates, he says.

 

...

 

Low rates are also pressuring life-insurance companies, which rely in part on returns from high-quality bond investments to pay their obligations. "We have about $175 billion in cash and investments, and 94% of that is conservatively invested," says Chris Blunt, executive vice president of New York Life.

 

After waiting three years for rates to rise, Jenny Fleming, a financial planner, is putting client funds into dividend-paying stocks. One of her clients, Margie Stewart Alford of Austin, Texas, is using dividend-paying stocks to provide interest income that might normally come from CDs. While Ms. Alford, 75, still plays Friday-night poker, she says she can't afford to boost her stock exposure too much. "At my age, I can't be a risk taker anymore," she says.

 

From Nordea Bank this week - Households´ savings have plunged


One likely factor holding up personal consumption is that US households have diminished their savings ratio at a rather brisk pace in H2 2011. While one can argue about the reasons behind this, we believe that it is unsustainable. On the contrary, our models suggest that savings actually should increase (see fig 4 above).

The average savings ratio since 1960 is 7% and considering the appalling fiscal situation (and the lack of will to do anything about it), a higher savings ratio is most definitely in the cards going forward.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 02/06/2012 - 14:47 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke will fail, bitchez!

Mon, 02/06/2012 - 14:51 | Link to Comment Silver Bug
Silver Bug's picture

His plan is to "inflate" away the problem. So yes retired people and savings are basically going to be exterminated. Sad really.

 

http://davidmorganblog.blogspot.com/

Mon, 02/06/2012 - 14:56 | Link to Comment Conrad Murray
Conrad Murray's picture

Wall Street has taken over the Death Panels business!

Mon, 02/06/2012 - 15:00 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Low yields mean EVERYONE on Wall Street is violating FINRA's new suitability rules...and probably the old rules, too.

NFLX granny?

Mon, 02/06/2012 - 15:03 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

RICO? No no NFLX my bad...

Mon, 02/06/2012 - 15:14 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

All I know, junior, is this.  The next time the President of The United States of America goes on the television and says it is a good time to buy stocks I am selling my Series EEs and going all in.  He went to Harvard and worked on Wall Street, you know...and Mrs. Horseman needs a new mounting block.

Mon, 02/06/2012 - 15:16 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Harvard... Wall St... at least we get to pick chocolate or vanilla so don't be an asshole and just BTFD!

Mon, 02/06/2012 - 15:42 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Obama or Cramer?   Hmmmmm....they are both obviously successful men with great Wall Street track records.  Maybe a blended portfolio of both their top stock picks would be right for me and the rest of my friends at Restful Acres Assisted Living Facility?

Mon, 02/06/2012 - 15:45 | Link to Comment sodbuster
sodbuster's picture

Better known as RAALF.

Mon, 02/06/2012 - 15:25 | Link to Comment TruthInSunshine
TruthInSunshine's picture

The more that The Bernank pushes on a string (QE, ZIRP4EVER), the more people white knuckle their fiat.

Oh, the irony watching the snake eating its own tail.

The Bernank is DESTROYING the desire to consume, as he's freaking the world of savers and the presently liquid out with his absolute abomination of policies, while the non-savers and the majority who have difficulty getting credit have difficulty spending, also (given the banking sectors precarious-dead state of health).

Here is the textbook example:  Mr. Smith, who is 78 years old, worked hard his whole life and retired with enough savings that would have, in an ordinary interest rate environment, have produced an income stream from interest on his savings, that would have prompted him to spend far more freely (he may even have already have replaced his 2001 Mercury Grand Marquis by now if not for the fact he is anxious due to his meager/non-existent interest ZIRP income).

So, Mr. Smith buys no new car, hires no one to put a sunroom on his (now radically depreciated home), does not take a vacation this year, and he bought everyone a lump of coal for Christmas this year (and will do so next Christmas).

All thanks to The Bernank.

Mr. Smith [and the savers, who ARE the liquidity that will needed to save the world from the next fractional reserve banksters from induced real world economic meltdown], says "[n]o thanks, Ben, I may only have another 5 or 10 years, and I will not invest in LULU or 30 year USTs, bitch."

Mon, 02/06/2012 - 15:35 | Link to Comment ghostfaceinvestah
ghostfaceinvestah's picture

For younger people, the only "risk free" investment is to pay down debt, any debt.

Bernanke is fostering the very deleveraging he is trying to prevent.

Mon, 02/06/2012 - 16:10 | Link to Comment Captain Kink
Captain Kink's picture

You are dead right. This is the ZIRP trap. Identified by Gross and others here for weeks now...In a normal situation, Debt is your best defense against inflation (with the exception of PMs, potentially) and (hyper)inflation is coming if he continues to print his way out.  This is, in fact, the prescription--reduce the "real" value of the debt through inflation, but they don't understand the situation they are in at the zero bound....  In this environment The Fed should be normalizing rates NOW. Yesterday, in fact.  The only way we have any hope of getting out of this fuking mess is to RAISE RATES, strengthen the dollar, invite HUGE Foreign Direct Investment (inflationary--offsetting deflation), thus allowing captial formation, encouraging investment (including bank lending), igniting auto and home purchases, creating jobs, sparking the economy in a way that may, just maybe, provide for a sustainable level of real growth that does not require massive deficit spending to keep it going. It also has the added benefit of enabling savers and those on fixed income to get a return on their monies.... You are spot on.  This is the ZIRP trap that you have identified, and there is only one way out.  RAISE RATES NOW! 

We have never had an economic recovery with a weak dollar... NEVER.

Mon, 02/06/2012 - 17:15 | Link to Comment MachoMan
MachoMan's picture

I am completely deleveraging and in June I hope to have not a penny in debt to my or my wife's name...  including mortgage...  I might buy another house, but it would be significantly cheaper and we'll pay it off in a couple of years all things equal.  Something in the ~1x income range.

This is EXACTLY what ben's policies are forcing us to do...  6% on student loans?  20% on cc?  4% on mortgage?  All more than you can get from cds, bank account, treasuries, et al...  the only reason not to pay off debt early would be if it didn't lower your payments, e.g. a mortgage as opposed to cc debt.

By not allowing J6P to partake in the large firesales of institutions, the only available option is to pay down debt and hopefully let whatever breathing room that gives you to last just that much longer in the biflationary environment...  waiting until you finally get a crumb big enough to come along.

Mon, 02/06/2012 - 15:45 | Link to Comment AnAnonymous
AnAnonymous's picture

Mr. Smith, who is 78 years old, worked hard his whole life and retired with enough savings that would have, in an ordinary interest rate environment, have produced an income stream from interest on his savings,

______________________________________________________

This normal environment is one of a growing world.

Alas, alas, ill despair, US citizens have hit the world limit growth.

If US citizens cling to their fiat, it is more because there is less and less to consume as mass production is kicking the bucket.

Mon, 02/06/2012 - 16:18 | Link to Comment Chump
Chump's picture

US citizens have hit the world limit growth.

???  Rofl, shitty chinese spam bot is shitty. 

Mon, 02/06/2012 - 17:28 | Link to Comment akak
akak's picture

Just another example of public spitting, nose-picking, roadside shitting, Tibet invading, hypocritical Chinese citizenism in action.

It is the inherent nature of Chinese citizenism to shit on the roadside, spam online forums and blob up.

As Stoolman Mousy Tongue declared in his Teeny Tiny Scarlet Book, "All idiocy flows from the barrel of Chinese citizenism".

Mon, 02/06/2012 - 18:41 | Link to Comment smb12321
smb12321's picture

This involves another event rarely mentioned by the MSM.  Pension funds are being devastated, especially those expecting an absurd 8% annual return.  Of course the funds are structurally unsound to begin with but 1% interest inevitably leads to riskier investments - just the thing Ben wants despite overwhelming evidence of dire consequences.  In the "old days" we diligently saved at 5-7% interest until we could afford to safely buy a product.  The idea of long-term savings is anathema to the powers that wannabe.

Tue, 02/07/2012 - 01:45 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Great comments on the ZIRP trap & deleveraging. I personally seeing guys that worth 8 figures on paper, driving 6 figure cars and living in homes that they thought were worth 7 figures, deleverage like crazy right now; some of them are doing so voluntarily, while others are doing so involuntarily.

I'm not talking about a few people, either. I'm talking dozens of clients and former clients. Most of these people made paper fortunes in real estate development, auto dealerships, owning distributorships or exclusive channel distribution outlets for construction materials.

Defense contractors are going to start taking it up the ass next. Wait, watch and see. They're the last class of self-thought 'self-made' entrepreneurs who think they're above the fray.

Ilene has an article posted above where David Stockman (former Budget Director under Reagan) emailed Bruce Krasting regarding Bruce's call out of Larry Summers on his fluffing of Friday's "fantastic /s" NFP Report.

If you read what Stockman has to say about the manipulation of those numbers, and how looking at adjusted vs unadjusted data does in terms of revealing the massive manipulation, it's pretty damn scary.

Employment Data Saga Continued: Krasting Says Larry Summers Misstates; Stockman Says It Goes Deeper

They say that when the going gets rough, the tough get going, and there's not a whole lot that awake people can do in the face of a giant Ponzi/scam/Matrix that's being propagated by government and Wall Street accept to deleverage (or not get into debt), make rational & diligent preparations in the form of a solid game plan, and hone one's skill set in continuing to adapt to the ever worsening economy.

The dam is going to burst, when the bullshit is stacked so high, as it always has before and always will in the future.

Mon, 02/06/2012 - 19:14 | Link to Comment GoldenGal
GoldenGal's picture

Think  this may be the last time to SELL gold before the bottom drops out?

http://finance.yahoo.com/blogs/breakout/last-chance-sell-gold-suttmeier-...

 

Diamonds are the NEW gold!

Mon, 02/06/2012 - 19:19 | Link to Comment GoldenGal
GoldenGal's picture

Thirty year Italian treasuries, a  date with Trav 777, along the greek mediteranean and a bottle of Port to celebrate St Patricks day wearing my antique mantilla  sounds like adream come true!

Mon, 02/06/2012 - 15:13 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

At least gold is seen as aggressive, so old people will thankfully not invest there!  Who needs gold?  Not old people.  They need paper!

Mon, 02/06/2012 - 16:30 | Link to Comment Non Passaran
Non Passaran's picture

They sure do.

Because "experts" today say: now its the time to buy Europe bank stocks!

I'm not making this up: http://finance.yahoo.com/news/now-time-buy-europe-bank-171421154.html

Mon, 02/06/2012 - 17:51 | Link to Comment earleflorida
earleflorida's picture

Caution:

 Chapter 11: "Roosevelt and Gold Confiscation" 

"FDR's Gold Policy in the 1930's" 

--- bought [forced/ gunpoint/ 10 yrs jail, etc?] gold for $20.67 oz. for 100 yrs ,... then sold gold for $35 oz. --- Jan/1934 @ $4,033ml ___ Feb/1934 @ $7,348ml, an increase of $3,405ml in less than a month --- nice!

http://www.news.goldseek.com/GoldSeek/1212944400.php

http://www.independent.org/publications/article.asp?id=165 ___ note: key research articles: 5/1/99- thornton/timberlake jr/thompson

 

Mon, 02/06/2012 - 15:39 | Link to Comment Jonas Parker
Jonas Parker's picture

Bernake "herded" me into physical silver and gold!  :)

Mon, 02/06/2012 - 15:48 | Link to Comment stocktivity
stocktivity's picture

God help him if there is a 10% correction ever again in the stock market. (sarc)

Mon, 02/06/2012 - 14:48 | Link to Comment Gubbmint Cheese
Gubbmint Cheese's picture

I'm sure it will all work out.. Ben's got his finger on the pulse of the world..

lolz

Mon, 02/06/2012 - 14:51 | Link to Comment Bastiat
Bastiat's picture

. . . got his fangs in the neck of the world, more lke.

Mon, 02/06/2012 - 14:52 | Link to Comment tony bonn
tony bonn's picture

bernankula and his plutocratic overlords are cretins and wicked people....leave the economic fraud alone - the personal and criminal swindle is indictment enough....

Mon, 02/06/2012 - 16:36 | Link to Comment Doña K
Doña K's picture

We can stop them.

  1. Default on mortgages (if you are under water)
  2. Hoard cash out of banks
  3. Buy physical PM's
  4. Buy only what you realy need and only made in America
  5. grow your own stuff (if you can)
  6. Learn a real trade
  7. Hug your kids
  8. Make love to your spouse
  9. Play and have a god time with friends and family
  10. Consider bankruptcy if credit card debt is unbearable

That will teach BB a good lesson.

Mon, 02/06/2012 - 17:43 | Link to Comment LoneCapitalist
LoneCapitalist's picture

#9 had better be a typo, or youll get junked on this board.

Mon, 02/06/2012 - 23:11 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Not true.  I have found this site very accepting of an individual's right to a relationship with God.

Mon, 02/06/2012 - 14:54 | Link to Comment resurger
resurger's picture

Genghis Khan's / Benjamin Khan's great empire

"He had the greatest empire in the world and he had a money system exactly like ours. He printed paper money and he had a way of making people take his paper money - if you didn't take his paper money he'd cut your head off [Insert your case here]

His money system worked for a long time but finally there came a time when people started issuing too much money and they became too independent and the time came they refused to take it. And the empire collapsed because of the money system."

 

<3 Love you Ben

Mon, 02/06/2012 - 16:12 | Link to Comment falak pema
falak pema's picture

Genghis Khan had two thousand mistresses and allegedly six thousand progeny, inspite of spending his life fighting wars in the saddle. He is alleged to have died when he seduced and bedded a Chinese Tangut princess whose land he had conquered and who  had hidden a pair of pliers in her vagina. During consummation she used it to good stead to cut off his nuts, died as a result of it, as he, a few days later in great pain. Now that is going out with a bang, when you are world leader. Can you imagine anybody in our times with such entrepreneurial passion who put his pecker where his sword went, figuratively speaking, before bang  bang? 

Fortunately our women are free nowadays, and to seduce we don't have to use brute force and they, no pliers. But I may be wrong! 

http://en.wikipedia.org/wiki/Genghis_Khan

Mon, 02/06/2012 - 16:13 | Link to Comment lincolnsteffens
lincolnsteffens's picture

I think you are getting the term mistress confused with capture and rape. Genghis got the pick of the lot where ever his Hoard conquered. The best looking women were paraded before him BEFORE his fighters had their pick. This is why the most common inherited gene traits in the world are traceable to Genghis.

Mon, 02/06/2012 - 16:41 | Link to Comment Doña K
Doña K's picture

DNA can only be traced to mothers not fathers. By conjunction theory maybe.

Mon, 02/06/2012 - 17:25 | Link to Comment Matt
Matt's picture

I'm pretty sure that this is incorrect. The Y-Chromosome is passed down with little alteration from father to son, so you can trace a man's lineage from father to son, going back a very long ways.

Using this same method, they found that 1 in 12 Irishmen are descended from a single warlord, Niels of the Nine Hostages; in Northern Ireland, it is 1 in 5.

Tue, 02/07/2012 - 15:23 | Link to Comment Doña K
Doña K's picture

Mitochondrial DNA can be regarded as the smallest chromosome, and was the first significant part of the human genome to be sequenced. In most species, including humans, mtDNA is inherited solely from the mother.

http://en.wikipedia.org/wiki/Mitochondrial_DNA

Y chromosome ancestry a lot more complicated and requires grouping and assumptions

Mon, 02/06/2012 - 17:31 | Link to Comment falak pema
falak pema's picture

the specific example of the Tangut princess in my text shows how the term "mistress" was applicable to Genghis's nightly companions...he did get retribution at last. Mistress of master...more appropriate.

Mon, 02/06/2012 - 17:55 | Link to Comment earleflorida
earleflorida's picture

ouch!

Mon, 02/06/2012 - 17:52 | Link to Comment steve from virginia
steve from virginia's picture

 

The Chinese had paper money 200 years before Genghiz Khan.

They have a long history o alternatingf paper/metal currencies and currency backing. They have had periodic hyperinflation caused by debasement.

The Chinese have historically used silver and copper as monetary metals.

The Mongols were successful b/c their core states making up 'China' were adjacent to prosperous nation-states that could be pillaged.

Kublai liked Europeans, Marco Polo came for a visit and stayed 20+ years. Venice became fabulously wealthy trading with the Mongols. The Crusader states were supported by Khan armies until the Crusaders were defeated by Saladin in the 12th century.

http://en.wikipedia.org/wiki/Chinese_currency

 

 

Mon, 02/06/2012 - 14:54 | Link to Comment HD
HD's picture

I often wonder if Ben truly understands the damage he is doing and feels trapped or is simply oblivious to the consequences outside the Fed bubble.

Mon, 02/06/2012 - 15:23 | Link to Comment XitSam
XitSam's picture

I often ponder on this question. Currently my opinion is ...

He's aware. But he thinks what he does is in the best interest of the banks, because without the banks where would the financial system be? That it destroys savings and raises food prices around the world is collateral, and probably necessary, damage.

Mon, 02/06/2012 - 15:50 | Link to Comment kaiserhoff
kaiserhoff's picture

In view of our present difficulties, it would seem that we ought at least to try to start over again from the beginning and devise concepts..., which come closer to physical reality.

                            P W Bridgeman, from The Logic of Modern Physics

Mon, 02/06/2012 - 15:24 | Link to Comment XitSam
XitSam's picture

sorry, double post

Mon, 02/06/2012 - 15:27 | Link to Comment Gief Gold Plox
Gief Gold Plox's picture

I think you're giving him to much credit in assuming that he actually cares. My mistake is assuming he's adequately educated and an intelligent man, who just doesn't give a damn. Not about the masses anyways.

Remembering that the FED is in essence a privately owned organisation, it is my belief that they're following a script whose ultimate purpose is to extend the mandate of the FED indefinitely, granting it wider jurisdiction in the process. Hundred years are almost up and there's no way in hell the people who enjoy so much power are going to sit idly by while it expires.

Mon, 02/06/2012 - 16:08 | Link to Comment DavidC
DavidC's picture

Yes, that made me wonder when the Fed said it is extending ZIRP into 2014 - isn't the Fed's mandate finished before that?

DavidC

Mon, 02/06/2012 - 19:06 | Link to Comment Rainman
Rainman's picture

Bernank term is up in '13. He be votin Obama '12 fo sho.

Mon, 02/06/2012 - 15:49 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

Benoicde doesn't create monetary policy, he implements it. He is simply taking orders from Rothchild, Warburg, Schiff, Morgan, Rockefeller and subsequent shareholders of the Federal Reserve Corporation. The FOMC does not work for the American people. These past several years are testament to that fact. They simply don't care about the middle class or the working poor.

Who Owns The Federal Reserve?

Mon, 02/06/2012 - 16:45 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

FOMC: Fuck Over My Country

 

Mon, 02/06/2012 - 15:51 | Link to Comment AnAnonymous
AnAnonymous's picture

Ben Bernanke is a US citizen. US citizens are duplicitous.

Bernanke understands as much as it is possible to understand his own actions and the consequences of.

He wont tell for sure.

Just like the time he claimed that his policy had nothing to do with inflation, when food prices skyrocketed and food riots happened around the world.

US citizenism, self indiction is a big no no.

Never take responsibility for the negative consequences of your actions, only for the positive.

Mon, 02/06/2012 - 17:07 | Link to Comment akak
akak's picture

Bite the wax tadpole!

Mon, 02/06/2012 - 18:49 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Caution! Chinese citizenism has resulted in tadpoles made of lead-contaminated wax.

 

Mon, 02/06/2012 - 19:07 | Link to Comment akak
akak's picture

Oh the (chinese citizenism) humanity!

When lead-contaminated biting wax tadpoles are outlawed, only roadside-shitting, sweatshop-enslaved outlaw Chinese citizens will continue to produce lead-contaminated biting wax tadpoles.

Mon, 02/06/2012 - 20:48 | Link to Comment smlaz
smlaz's picture

"When lead-contaminated biting wax tadpoles are outlawed, only roadside-shitting, sweatshop-enslaved outlaw Chinese citizens will continue to produce lead-contaminated biting wax tadpoles."

But they're the only ones producing said lead-contaminated biting wax tadpoles.  Er, the tadpoles are biting whom?  Or is that a result of lead poisoning?  Last wax tadpole I bit into didn't bite back, but it sure tasted good!  But that was well before Deng's ascendance...

Mon, 02/06/2012 - 16:05 | Link to Comment Sunshine n Lollipops
Sunshine n Lollipops's picture

"Just how dangerous is he?"

"Compared to what? The bubonic plague?"

Tue, 02/07/2012 - 01:44 | Link to Comment Lester
Lester's picture

I often wonder why so many are unable to judge for themselves that TPTB have long sought the Complete & Utter Irredeemable Destruction of The United States?

How much more proof do you need?

The politicos have PAID Cash Money to firms that relocate out of US. No care or concern that they betray oath of office or implied fiduciary duty to the electorate and all citizens.

If you are still wondering if the USA will collapse; the answer is YES, Because That Is What The Powers That Be Have Intended ever since the Civil War era.

Mon, 02/06/2012 - 14:56 | Link to Comment JW n FL
JW n FL's picture

 

 

Federal Reserve Earnings verse Federal Reserve Loans to the United States of America

 

 

1. How much does the Federal Reserve Bank Earn in Interest Payments? From anyone other than the United States of America.

 

Federal Reserve $15 Trillion Dollars in Loans Bloomberg

 

Loans from 3 / 9 / 2008 to 3 / 9 / 2009 totaling $15,760,004,161,955.00

 

https://docs.google.com/spreadsheet/ccc?key=0Aq7CIo3B6RWfdDlTRWk5SnVOTUp1bG4wMXdPMnV2SUE#gid=0

 

Getting Bigger

Instead, the Fed and its secret financing helped America’s biggest financial firms get bigger and go on to pay employees as much as they did at the height of the housing bubble.

Total ** assets ** held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data

** http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx **

 

 

The Fed’s Secret Liquidity Lifelines

http://www.bloomberg.com/data-visualization/federal-reserve-emergency-lending/#/overview/?sort=nomPeakValue&group=none&view=peak&position=0&comparelist=&search=

 

 

 

2. Who are those Monies Participated Out too? That the Federal Reserve Bank Collected?

Who owns the Federal Reserve?

The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.

As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government."

The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

http://www.federalreserve.gov/faqs/about_14986.htm

 

 

So! The question stands.. if the Federal Reserve is collecting .25% interest on $100 Trillion Dollars a Month.. Where Does ALL!! That Money Go?!?!?!?!?!

6% here.. 6% there.. Participated Out to the Shareholders.. into thier Federal Reserve Bank Accounts.

Mon, 02/06/2012 - 15:35 | Link to Comment JW n FL
JW n FL's picture

 

 

 


So if the Federal Reserve is Collecting 6 times more a MONTH in Interest payments than is due by the United States of America (for our National Debt of $15 Trillion).. Why are the American People having too carry that debt? When the Federal Reserve is making AT LEAST 6 Times More than the Payment Due by ALL! of us?

 

Henry Ford-

"It is well enough that people of the nation do not understand
our banking and monetary system, for if they did,
I believe there would be a revolution before tomorrow morning."

 

If the Shareholders of the Federal Reserve are collecting their 6% of the $100 Trillion (minimum) Dollars a month in Interest payments..

 

Then why in the FUCK! Do We the People of the United States need to be taxed to death to pay for the Bank Bailouts?

How fucking hard is this for anyone to understand?

How can I dumb it down more for you?

How many people do you think you could explain this very simple FACT too?

 

When do you think would be a good time to let people know this?

Never mind Baby Boomers! I know you are just trying to sneak out without having to pick up this for shit bar tab the rest of us are saddled with!

But you younger people that will have to live this fucking nightmare going forward for a good long while should take a GREAT! Amount of interest in the facts that have been dumbed down and sourced and sited for even the most simplistic of mentalities to be able to grasp, easily.

 

So!

Clip and Paste!

And then send it to everyone you know in your email box.. it is like you have to click the mouse 5 or 10 times total to educate everyone you know.. and feel free to let the dumbasses that you are sending this to as well know how simple it is to educate everyone they know..

And maybe..

Just fucking maybe!

We will be able to stop getting RAPED by the Federal Reserve and Washington DC via the Wall Street Lobby!

 

Thanks for Playing Along!

Add your name here! _____________________

 

 

Mon, 02/06/2012 - 15:44 | Link to Comment JW n FL
JW n FL's picture

 

 

we will find out that the Federal Reserve does NOT! record all cash movements as well when the FED is made to open its books!

it will be the standard answer for all of those hiding the truth!

but no worries!'

the sheep are as stupid as ever..

and!

all the baby boomers spent a life time living a lie! they are not going to push for the truth!

they would rather enjoy their golden years! and perpetuate the lie just a little longer!

as long as we get stuck with their tab, they don’t give a fuck!!

 

The Powers that Be don’t feel like paying for the Baby Boomers either!

So we might get a little bit of shake up!

Just enough to screw the majority so that the few can benefit!

You know the same ole’ same ole’!!

 

Mon, 02/06/2012 - 16:03 | Link to Comment Things that go bump
Things that go bump's picture

It has become Shiva, Distroyer of Worlds.

Mon, 02/06/2012 - 14:55 | Link to Comment riphowardkatz
riphowardkatz's picture

Bernanke...Evil or ignorant?

Mon, 02/06/2012 - 15:04 | Link to Comment Antifederalist
Antifederalist's picture

Neither.  Worse, arrogant.  Believes his own bullshit.  He is the dork in high school who now gets to act like the quarterback.

Mon, 02/06/2012 - 15:08 | Link to Comment resurger
resurger's picture

he just considers you a lesser human!

What pissed me off the most in the last congressional meeting is the bytch "Shultz" she said:

" I want to thank you sir for creating more jobs into the economy"

 

 

 

Mon, 02/06/2012 - 15:13 | Link to Comment Everybodys All ...
Everybodys All American's picture

Yes

Mon, 02/06/2012 - 14:59 | Link to Comment roccman
roccman's picture

bernanke knows of peak oil

 

savers - debtors - us lower races are being slammed into the wall of resource depletion at 500mph.

 

i would not be surprised if the top 1% are making a mad dash out of europe/usa to Iraq/Afghan/China - to bunker-up as 'mericans kill each other off and europeans starve to death...only to repopulate europe/merica once the kill off is complete.

 

think about it

Mon, 02/06/2012 - 14:55 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

" a 39-year-old pediatric neurologist in New York, says he plans to shift his emergency reserve to a long-term municipal bond fund when his CDs mature this summer. "I would still like to keep that as liquid as possible and as risk-free as possible, but I'm not really happy with the available options,"

 

G O L D & S I L V E R dummy.

Mon, 02/06/2012 - 14:57 | Link to Comment resurger
resurger's picture

Good one +1

Do you know if they are going to crash Gold & Silver other than short selling ... I think they have a plan in mind? They just fucking hate seeing PM's go up

Mon, 02/06/2012 - 15:37 | Link to Comment Gief Gold Plox
Gief Gold Plox's picture

You bring up a valid point, one which I've been giving considerable consideration seeing how deeply I've immersed into PMs. Unfortunately I can't seem to come up with a credible argument other than that I've got this strange feeling that there's a plan to screw over even those pesky gold bugs, especially the ones who think they're safe. I know I'm being paranoid, but I just can't shake the feeling.

Mon, 02/06/2012 - 15:54 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

That strange feeling will evolve into a great feeling once tshtf and you're one of the only ones in your community who had enough foresight and patience to diversfy into the smartest asset class while you could.

Mon, 02/06/2012 - 16:02 | Link to Comment Gief Gold Plox
Gief Gold Plox's picture

Thank you Sir, for your kind words of encouragement.

Mon, 02/06/2012 - 16:23 | Link to Comment Things that go bump
Things that go bump's picture

They will do as they have before, confiscate the gold and revalue the currency against it.  This time maybe silver too. It's for your own good, you know. Do like the Indians and have it made into jewelry or chess pieces or something, or melt it to look like nuggets if you need cash (look what I found on vacation), or bury it.  The last time, there were things that were exempt from confiscation.

Mon, 02/06/2012 - 18:47 | Link to Comment prole
prole's picture

I often thought along those lines. Imagine a normal sheople in 1933, Rosenvelt steals his gold. OK, but the

poor sap can take the 20 per ounce payout and buy physical silver with it. An investment which would have paid

out handsomely through time. IIRK silver was around a great low in the 1933 era.

 

Mon, 02/06/2012 - 16:17 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Long-term municipals? Ha! Those are getting Priced for Distribution to Suckers as we speak. Looks like he's going right into the bag.

Mon, 02/06/2012 - 14:56 | Link to Comment tarsubil
tarsubil's picture

"At my age, I can't be a risk-taker anymore"

If you will not buy stocks, then you will meet your destiny. - Signed Darth Bernanke

Mon, 02/06/2012 - 15:00 | Link to Comment HD
HD's picture

This is not the clip you're looking for:

 http://www.youtube.com/watch?v=Z23fZSa-QY4

Mon, 02/06/2012 - 15:03 | Link to Comment resurger
resurger's picture

lol

Mon, 02/06/2012 - 15:07 | Link to Comment tarsubil
tarsubil's picture

Help us, Obi-Ron. You're our only hope.

Mon, 02/06/2012 - 15:17 | Link to Comment slackrabbit
slackrabbit's picture

Wow a squid training video! 

Where did you get it?

Note: I especially love the bit about how you own the senate...

Mon, 02/06/2012 - 14:57 | Link to Comment kaiserhoff
kaiserhoff's picture

No country for any man, really, but a trend is not destiny.

Mon, 02/06/2012 - 14:59 | Link to Comment Hedgetard55
Hedgetard55's picture

Berspanky may be a criminal, but he is not stupid. He knows exactly what is going to happen to the savers that chase yield and increase risk - vaporization when interest rates pop. He does not care as long as his bankster masters are made whole and offer him an 8 figure salary when he retires. What possible punishment could fit this prick's crimes?

Mon, 02/06/2012 - 14:59 | Link to Comment non_anon
non_anon's picture

sacrificed on the altar of the FEDRES

Mon, 02/06/2012 - 14:59 | Link to Comment The trend is yo...
The trend is your friend's picture

Bernanke is following the Japanese playbook.  Look where that got the Nikkie over the past 2 decades.  Deflation in equity prices.

Mon, 02/06/2012 - 15:02 | Link to Comment resurger
resurger's picture

Investors are RUSHING TO BUY

Huggies Price Cut Shows Why Bond Market Backs Fed QE3

http://www.bloomberg.com/news/2012-02-06/huggies-price-cut-shows-why-bon...

Mon, 02/06/2012 - 14:58 | Link to Comment Jreality
Jreality's picture

"G O L D & S I L V E R dummy."

Gold and Silver are risk-free????????

Mon, 02/06/2012 - 15:34 | Link to Comment Strike Back
Strike Back's picture

As long as you don't sell on a margin hike or short selling raid, yes.

Mon, 02/06/2012 - 15:42 | Link to Comment Jonas Parker
Jonas Parker's picture

When you hold them in your hot little hand...

Mon, 02/06/2012 - 15:00 | Link to Comment bnbdnb
bnbdnb's picture

Welcome to the oscillating bubble era.

Mon, 02/06/2012 - 17:15 | Link to Comment LouisDega
LouisDega's picture

Fat Clamenza says exterminate is a bad word to use. Sonny's running  wild. Hes thinking of going to the matresses already

Mon, 02/06/2012 - 15:00 | Link to Comment riphowardkatz
riphowardkatz's picture

Another consequence of tying the oldies to the stock market is that it is a a feedback loop with rates and unemployment. If he raises rates the stock market crashes and unemployment goes up. This hurts the old person who is invested in stocks but it also hursts pensions by both having less people paying into the ponzi and putting them ever farther from their factored in 8% return. 

Man alive if he is not terrified he is a psychopath. Greenspans exist stage left could have been the best timed exit ever. 

 

Mon, 02/06/2012 - 15:05 | Link to Comment HD
HD's picture

There is a tiny, tiny piece of me that feels for Greenspan. In the interviews he's given in the past few years - you can see the regret in his face. He knows he destroyed lives and his legacy and is powerless to change it.

I wonder if Ben will have that look.

Mon, 02/06/2012 - 15:33 | Link to Comment XitSam
XitSam's picture

No.

Mon, 02/06/2012 - 15:44 | Link to Comment Jonas Parker
Jonas Parker's picture

Only when he's hanging from a lamp post...

Mon, 02/06/2012 - 15:56 | Link to Comment Kinskian
Kinskian's picture

I don't see regret in Greenspan's face, only arrogance and ugliness.

Mon, 02/06/2012 - 16:29 | Link to Comment AnAnonymous
AnAnonymous's picture

Maybe he regretted not destroying more lifes. He had the power to perform better, he knows that.

Greenspan is a US citizen, and culture of death runs deep in US citizenism.

Mon, 02/06/2012 - 17:24 | Link to Comment riphowardkatz
riphowardkatz's picture

1 in 8 people in the world is a Chinese rice farmer. 

Tue, 02/07/2012 - 03:50 | Link to Comment akak
akak's picture

Greenspan is a US citizen, and culture of death runs deep in US citizenism.

And yet even with a "culture of death", the American regime(s) of the last 60 years somehow managed to avoid killing literally tens of MILLIONS of its own citizens through a centrally-planned "Great Leap Forward" into mass starvation, and through a ten-year period of centrally-planned and approved social chaos euphemistically called "The Cultural Revolution", and through repeated purges and executions of dissidents and dissenters.  Nor did it invade and dispossess a neighboring nation which had been independent and peaceful for centuries.

Now, just WHO was it who had that "culture of death"?

Mon, 02/06/2012 - 16:13 | Link to Comment Things that go bump
Things that go bump's picture

You bet he is terrified.  Just look at him when he talks. He stutters, sometimes his lips quiver, he blinks excessively (George Bush did that when he was lying too. It was a huge tell).

Mon, 02/06/2012 - 15:01 | Link to Comment slackrabbit
slackrabbit's picture

He's already destroyed the pensioners, why stop there?
Now its the middle class, just like Melvin King.
They both hate and despise them, as they are the rebuke to their economic models.

Mon, 02/06/2012 - 15:02 | Link to Comment Antifederalist
Antifederalist's picture

When does this crazy fuck, the Bernank, realize that he and the system are "the problem"? 

How much more pain do citizens of the world have to endure?

http://www.nytimes.com/2012/02/03/business/in-rise-of-gold-bugs-history-repeats-itself.html?_r=1&ref=business

Look at the Univ. of Chicago study linked on page 2.  Unanimously, 40 economists surveyed think a gold standard would not lead to better economic outcomes.  The ultimate contrary indicator.   WTF?    These witchdoctors are going to bleed us all to death with their Keynesian bloodletting.

  WE NEED A NATIONAL MOVEMENT TO DEMAND SOUND MONEY!

Mon, 02/06/2012 - 16:30 | Link to Comment AnAnonymous
AnAnonymous's picture

They are right.

Crisis of expansion.

Same stuff as 19th century.

Too many US citizens, not enough Indians.

A change in currency wont change the fact that US citizens have reached planetary limitations.

Mon, 02/06/2012 - 16:36 | Link to Comment Antifederalist
Antifederalist's picture

You miss the point, Malthus.

Unrestrained credit growth created this frankenmonster economy.  Sound money would prevent that. 

There may be supply/demand carrying issues on the planet, but stable money would allow markets to adjust for shifting preferences.

Mon, 02/06/2012 - 15:03 | Link to Comment carbonmutant
carbonmutant's picture

Savers are Collateral Damage in Bernake's financial war...

Mon, 02/06/2012 - 15:33 | Link to Comment Jena
Jena's picture

and they're priced in.

Mon, 02/06/2012 - 15:03 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

Paraphrasing, does this sound sorta familiar?

"Listen up everybody, it's ok to go back in the water. The 24 foot Great White sighted yesterday along Amityville's shoreline is gone. As far as we know, it's gone."

 

 

Mon, 02/06/2012 - 17:28 | Link to Comment Matt
Matt's picture

And, you know, the thing about a central banker ... he's got lifeless eyes. Black eyes. Like a doll's eyes. When he comes at ya, doesn't seem to be living... until he prints, and those black eyes roll over white and then... ah then you hear that terrible high-pitched screamin'. The streets turn red, and despite all the poundin' and the hollerin', they all come in and they... hyperinflate you to poverty

Mon, 02/06/2012 - 15:47 | Link to Comment Cult_of_Reason
Cult_of_Reason's picture

Recently announced Fed FX Swap lines is how Bernanke secretly injects cash (free money) to Primary Dealers without actually doing QE (for example using JPM subsidiary in London or Tokyo), that in turn, PDs use  to buy S&P futures and prop up the stock market.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/01/ECB%20FX%20Swaps_0.jpg

The Fed and Primary Dealers colluded to rig stock prices (near 1.0 perfect correlation between the Fed injecting cash to Primary Dealers and stock market prices).

 Fed -> ECB or BOJ via FX Swaps -> PDs foreign subsidiaries -> PDs using free money from Bernanke to buy S&P futures -> Higher Stock Market

(and if you audit Bernanke's books, all you see is currency swap transactions between Fed and ECB or BOJ [no direct evidence of Bernanke manipulating his favorite Russell 2000])

 

 

Mon, 02/06/2012 - 15:04 | Link to Comment chunkylover42
chunkylover42's picture

Implicit in the Bernanke's statement is that the Fed will do whatever it takes to support asset prices.  Ergo, risk on.

Mon, 02/06/2012 - 15:06 | Link to Comment Dr. Engali
Dr. Engali's picture

Everybody keeps saying that Ben is failing. I think he is being amazingly successful. He has managed to blow up the equity bubble a third time  This is exactly what Ben wants. Put people further out the risk curve for the next round of wealth extraction. They won't be happy until they have it all.

Mon, 02/06/2012 - 15:12 | Link to Comment resurger
resurger's picture

Bubble!

Go buy stocks man , The Plunge Protection Team (PPT) will make sure the bubble wont Burst, dont worry!

Guess who's on the team

Jim Chano's

Good luck

Mon, 02/06/2012 - 15:04 | Link to Comment Vince Clortho
Vince Clortho's picture

force the sheep into high risk investments and then fleece them.

It's a win-win situation.

Mon, 02/06/2012 - 15:04 | Link to Comment JailBank
JailBank's picture

There is a need to punish the savers in this country how selfish have they been? They should ahve been buying up the latest Apple products like they are supposed to, not creating economic safety nets for themselves. That such a selfish attitude to have in regards to our collective economy.

Mon, 02/06/2012 - 15:05 | Link to Comment TooBearish
TooBearish's picture

Yeah, when interest rates pop, soon stocks will crash , soon the end will come ...blah, blab ..bull .  Amregeddon postposted infinitely....BTFD

Mon, 02/06/2012 - 15:08 | Link to Comment Jreality
Jreality's picture

BTFD is the new FDIC!  ;-)

Mon, 02/06/2012 - 15:10 | Link to Comment LongBalls
LongBalls's picture

This is all getting very exhausting. WTH is the end game here. We all know this crap is FUBAR. So let's just get to the point. Dollar will crash or will not? Gold is hedge or not? SDR will be the new basket of currencies or not? Global write down of debt or not?

All we know is that you can't leave your cash in a shoe box!?!?!? CRAP....sometimes I think I would loose less money if it were in a shoe box!

Mon, 02/06/2012 - 16:01 | Link to Comment lasvegaspersona
lasvegaspersona's picture

Cash in a shoe box is as good as anything with ZIRP.

I doubt if a few big fiats bite the dust that the world will be willing to save in another fiat like SDRs. Fiats work well as the medium of exchange but have always betrayed savers when it comes to long term stability of purchasing power. For Zees ve haf gold....

Mon, 02/06/2012 - 15:10 | Link to Comment Village Smithy
Village Smithy's picture

As predicted ZH took a lot of heat over the exposure of the BLS fraud numbers on Friday. The truth is that the longer these Kool-Aid slingers hide the truth, the more innocent people make bad decisions based on this misinformation. I wonder how many retirees are contemplating moving funds into equities or high yield funds this week all based on the "great news" that unemployment is falling. We may argue here about what the role of government should be but one thing it should not be is misleading. 

Mon, 02/06/2012 - 15:12 | Link to Comment Negro Primero
Negro Primero's picture

Nowhere to run, nowhere to hide:

http://www.six-swiss-exchange.com/services/yield_curves_en.html

 

p.d.

Only Australia, (while it lasts), and...

Mon, 02/06/2012 - 15:54 | Link to Comment AnAnonymous
AnAnonymous's picture

Nowhere to run, nowhere to hide:

//////////////////////////////////////////

US citizenism is everywhere.

Mon, 02/06/2012 - 16:52 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

"US citizenism is everywhere."

It has even taken over the people of China.

 

Mon, 02/06/2012 - 18:52 | Link to Comment akak
akak's picture

Chinese citizenism is essentially the same thing as US citizenism, although there is in fact no such thing as "US citizenism", whereas Chinese citizenism is alive and kicking, shitting on the side of the road, raping Tibet and otherwise blobbing up.

This is the logic of eternal Chinese citizenism.

Mon, 02/06/2012 - 18:55 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Chinese citizenism has embraced the worst parts of US citizenism, and then added nose picking, roadside shitting, and enslavement of Tibet.

The Bernank seeks to emulate Chinese citizenism.

 

Mon, 02/06/2012 - 19:14 | Link to Comment akak
akak's picture

The Bernank is clearly a practitioner of Chinese citizenism, as demonstrated by his destruction of the American economy, his exploitation of the American saver, his enslavement of the American investor, and by his monetary blobbing up. 

He has been seen to pick his nose during congressional testimony as well --- another telling sign of Chinese citizenism.  I wouldn't be surprised if he shits on the side of the Beltway on his way in to work.

Thus is the eternal nature of Chinese citizenism citizens blobbing up.

Mon, 02/06/2012 - 15:10 | Link to Comment razorthin
razorthin's picture

I'll tell you what's sad - That we are sitting back and taking it.

Revolution!

Mon, 02/06/2012 - 15:39 | Link to Comment XitSam
XitSam's picture

Big sis is watching you. 

Mon, 02/06/2012 - 16:03 | Link to Comment CuriousPasserby
CuriousPasserby's picture

More like bending over and taking it.

 

Revolution!

Mon, 02/06/2012 - 16:09 | Link to Comment xela2200
xela2200's picture

Nope. The people here are doing something about it. Every time they choose PM over CDs or bonds, they are sticking it to TPTB.

Mon, 02/06/2012 - 15:12 | Link to Comment youngman
youngman's picture

It is true that pension funds will have to chase returns..and that will put them in some very risky business ...they will lose as those go bust..to tell the public that saving money is bad is not the way to teach the public...and that will end bad too....so today stock are good...Facebook is a billion dollar company...savings are bad...gold and silver is bad...munis have become bad....Central Banks running the world...we are screwed

Mon, 02/06/2012 - 16:23 | Link to Comment Spigot
Spigot's picture

Persistent inflation destroys the economic prudence of nations. It also leads to the moral decay of nations as well.

Mon, 02/06/2012 - 15:13 | Link to Comment halflink123
halflink123's picture

I agree with the article, but Bernanke is doing more harm than just pushing savers out on the risk spectrum.

 

By keeping rates this low, he is giving the government free reign to add debt. As the debt burden increases, even savers' money becomes less and less safe, because the asset side of bank balance sheets, be they treasuries, mortgages, whatever, steadily loses credit quality.

 

By destroying the credit quality of US government debt, you increase the risk of default/inflation, which makes all other US assets more risky, even and perhaps especially bank assets.  

 

I would guess that the US has been in such a dangerous situation before, but I don't think it's been anytime in the last 100 years.  Certainly this is looking far worse than what happenned during the Great Depression, where I don't think the federal debt levels ever reached 100% of "GDP".

Mon, 02/06/2012 - 15:18 | Link to Comment halflink123
halflink123's picture

I would also just like to add that the '08 bailouts prevented a lot of useful bank debt restructuring. As a result, most banks are still extremely, extremely levered - very few banks are less than 10:1 levered.  So banks really have not used this "opportunity" to cushion their balance sheets with additional equity. So you have, still, decreasing credit quality while at the same time very high, and in many cases, still increasing leverage.  

 

And yet there is no concern about this anywhere, not from the Fed, not from anybody.

Mon, 02/06/2012 - 15:42 | Link to Comment onebir
onebir's picture

& to add insult to injury (so far) the Fed backed BoA's transfer of derivatives to its retail banking arm over FDIC objections!

They're (inadvertently I hope) setting the stage for a loss of confidence in banks and by extension fiat money (even if inflationary chasing doesn't achieve the latter...)

Central bank mandates need to be re-examined so they have some duty to savers.

Mon, 02/06/2012 - 15:13 | Link to Comment SheepDog-One
SheepDog-One's picture

Bernanke and Co., setting up the New World Order for years.

Mon, 02/06/2012 - 15:16 | Link to Comment MachoMan
MachoMan's picture

There are quite a few ways to outpace inflation.  The present biflationary environment requires us to take part in and find deleveraging/firesale deals.  The problem?   Access to these deals is very limited and only those connected get to partake, else feed on the scraps.  For example, when fannie starts dumping properties en masse, who is going to get to benefit?  For further example, when a bank fails, who gets to purchase the assets?  These are the easy deals...  the hard deals are finding individuals deleveraging... 

but yes, Ben's policy is to force everyone to toss their common sense to the wind and make speculators of us all...  tempered only by events the timing of which we are not privy.  It's akin to making everyone crazy so the folks formerly in the nuthouse can now be normal. 

Mon, 02/06/2012 - 15:55 | Link to Comment Kali
Kali's picture

"When a bank fails, who gets to purchase the assets?"

This has always pissed me off.  Why is it that some stranger can buy my debt from a defunct bank?  I should have first right of refusal to buy it,  pennies on the dollar, not someone else.  Ok. That was my mini rant of the day.

Mon, 02/06/2012 - 16:05 | Link to Comment XitSam
XitSam's picture

You're thinking the system is about fairness or justice. It is about preserving the banks.  (good point btw, I hadn't thought of this before)

Mon, 02/06/2012 - 16:15 | Link to Comment Kali
Kali's picture

AND......,

I know it is in the fine print, but same with mortgages.  Banks shouldn't be able to sell it without my permission.  This was an agreement between me and the bank.  These fuckers, just like when they broke "a promise" on all the credit card interest rates, people who borrowed at a fixed rate and then they change the rules and jack up the interest.

Or.......,

forcing me to invest my savings in bullshit 401k's, etc. by heavily taxing "non-retirement" savings.  I am so sick of all this bullshit.  And they wonder why people buy PMs.  Hang em all.  Banks used to be a vital part of a functioning community.  Now they are predators and thieves.  Along with the government.

Don't even get me started on bullshit derivatives.  When I was younger, these kind of transactions would be considered con man schemes.  Now it is par for the course.

This crack up is taking way too long.  They are gonna kill us all off before it is over. 

Mon, 02/06/2012 - 17:05 | Link to Comment MachoMan
MachoMan's picture

Of course, if the originator couldn't have sold your debt to someone else, you probably wouldn't have gotten a loan... 

The best policy is to allow everyone to contract freely, i.e. allow people to make their own mistakes.  The trick though, to ensure equity theory is not unbound, we must hold those who choose poorly to their poor decisions.  This includes not only borrowers, but their dumbass creditors as well.  Of course, the jury is still out whether this actually leads to more sound decisionmaking.  (at the very least it coincides better with our concepts of individual liberty, so that in and of itself should be sufficient reason to implement it).

You are free to try and work out an arrangement on your mortgage...  it's just that securitization has made this incredibly difficult, if not cost prohibitive.  Ultimately, you should be able to purchase a security with your home in it...  or, alternatively, make a settlement agreement with the owner.  You are free to fire away with a quiet title action if you like...

The government doesn't force you to throw anything in a 401k...  you need to whine to your employer about that one...  mine offers a simple plan that vests immediately...  of course, I'm closing it out the next time they dump money in it and have already stopped contributing...  given there is not a chance in hell I'll ever see any of it 30 years from now.  I'll pay the tax now and make uncle sam happy and then pull the proceeds from the system.  No more churn.

In the end, the banks should be free to do whatever they want with the lien, but need to be fucking cock stamped should they go full retard (e.g. MERS).

Mon, 02/06/2012 - 15:58 | Link to Comment AnAnonymous
AnAnonymous's picture

but yes, Ben's policy is to force everyone to toss their common sense to the wind and make speculators of us all...

_____________________________________________

Beyond Bernanke. It is the result of two centuries more of US citizenism.

Speculation is always somewhere. One can only diminish its importance through mass production (abundance)

As US citizens strived and succeeded in making the age of abundance last as short as possible, well, speculation is back on the front stage.

Bernanke can do nothing against that. Some things are not reversible and it is not possible now to reverse two centuries plus of US citizenism.

Mon, 02/06/2012 - 16:53 | Link to Comment MachoMan
MachoMan's picture

I don't really disagree with this.  But, I think we're talking in circles...  is the drug dealer or the drug user to blame?  Who knows...  but, the difference with the FED's strategy is that it forces the drug user to take drugs...  so, we can all be "american citizenzy" and all, but in and of itself, the FED is acting and forcing policy down our throats, regardless of whether the demand would have been there absent FED presence.  In other words, IT IS possible to rape a nymphomaniac.

Further, I don't think it's fair to hide behind unprovable theses, despite them holding up to a cursory inspection.  I also don't think you get to stand on the foundation that it was us consumerism that paved the way for the FED's conception and integration...  at the very least, it's a tit for tat kind of love affair (a relationship that has broken I think).

Mon, 02/06/2012 - 15:39 | Link to Comment Everybodys All ...
Everybodys All American's picture

I know in going through the crisis in the mid seventies most people never would consider our current situation to be of sound economic policy. Today though we are being run over with Keyensians who think that a strong dollar policy is unnecessary. Conventional wisdom in essence has done a 180. I'm quite frankly amazed at the economic ignorance of not just Bernanke but all of the Fed governors. What is even more alarming is we have so many warning signs all over the place (Greece, Spain, Ireland, Portugal) and still this policy is embraced.

Mon, 02/06/2012 - 15:24 | Link to Comment I should be working
I should be working's picture

Bernanke is full of it.  ZIRP are a blatent attempt to force the collected savings of the American people into the Wall St casino.  And the double edged sword also promotes undue speculation increasing risk to the economy.

How can Bernanke, who lived through the financial crisis, not understand that free money promotes excessive risk-taking in pursuit of short term gains? 

Mon, 02/06/2012 - 15:26 | Link to Comment Seasmoke
Seasmoke's picture

Logans Run carousel for all public employees over the age of 50

Mon, 02/06/2012 - 15:27 | Link to Comment EmileLargo
EmileLargo's picture

Its all a bit dumb. The old with savings get stuffed on their savings which increases their dependency on the welfare state which in turn raises government deficits which in turn make it harder to raise interest rates at any time because even a miniscule rise in interest rates causes the government's interest rate bill to skyrocket. The savers are well and truly screwed with no escape hatch. Interest rates will not be raised by the Fed, period. 

Mon, 02/06/2012 - 15:36 | Link to Comment yogibear
yogibear's picture

Bernanke and the Federal Reserve's message is to get out of the US dollar because he will keep printing. 

 

All the more reason for a new reserve currency. All countries need to make plans for another currency away from the US dollar, not backed by the lies of the Federal Reserve and the spend to infinity US government.

Mon, 02/06/2012 - 15:52 | Link to Comment SilverFocker
SilverFocker's picture

What country would that be............there in lies the problem, that every other country big enough to take on the reserve capacity is also fucked.......The gold for oil will also not work unless all consumption is on board, and that will not happen "Yet".

The Big piece of the pie is when they try and choke off the oil, then the U.S. will choke the food supply even further than what is being done now.

This is a GLOBAL shit-storm not delegated to just one or a few countries.

Mon, 02/06/2012 - 15:44 | Link to Comment Zero Govt
Zero Govt's picture

"No Country For Old Men?" Bernanke Plan To Exterminate Savers Is Unsustainable

Bailout the incompetent and bankrupts, fleece the productive savers. Why does America work so hard to make enmies when its central bank is a financial terrorist of epic proportions??

"Bernanke's recognition of his penalizing savers with low rates.."

Pissing on the savers (sane and sensible) you mean ..and he knows he's doing it?!!  ..why is this retard head of the Fed and not heading for the funny farm?

Economic vandalism, anarchy and perverse policies writ large. End the fucking Fed

Mon, 02/06/2012 - 16:02 | Link to Comment AnAnonymous
AnAnonymous's picture

Bailout the incompetent and bankrupts, fleece the productive savers. Why does America work so hard to make enmies when its central bank is a financial terrorist of epic proportions??

_______________________________________

Quite simple. Because those enemies are the savers, the ones that really conserve by not consuming their resources.

Savings as broadcast by US citizenism that is money put under the mattress is just another form of consumption that grows more important when they expect interest return on it.

US citizens go where resources were conserved, Iraq, Libya, possibly Iran...

Mon, 02/06/2012 - 17:13 | Link to Comment akak
akak's picture

Schizophrenia can be treated nowadays with the proper drugs, you know.

Unfortunately, there is no cure for being terminally stupid.

Such is the fate of mindless, nose-picking Chinese citizenism citizens.

Mon, 02/06/2012 - 18:39 | Link to Comment Zero Govt
Zero Govt's picture

AnAnon  -  consumption is not an end in itself... savings are important as it's stored wealth, just as every animal is biologically skilled at storing fat. We need stored wealth for rainy days, the inforseen and retirement

building fat is the opposite of building debt (the legacy of spending what you haven't got)

The Fed are economic morons (or wanting a population of debt-slaves: fascists) and the enemy of the (good) people

Mon, 02/06/2012 - 15:40 | Link to Comment Shizzmoney
Shizzmoney's picture

Shit that the Fed pulls like this is why I love to laugh at those who mock the Occupy or End/Audit the Fed movements. 

They may laugh at those with no jobs now; but we will ALL have the last laugh when these greedy bastards steal those precious 401Ks to "pay down debt"

Do NOT follow this link or you will be banned from the site!