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Guest Post: Why Bernanke Has Failed, And Will Continue To Fail
Submitted by Charles Hugh-Smith from OfTwoMinds blog,
Why Bernanke has Failed, and Will Continue to Fail (January 9, 2012)
Ben Bernanke's zero-interest rate policy (ZIRP) and command-economy efforts to maintain mispricing of risk, debt and assets are destroying capital and capitalism. No wonder his policies have failed so miserably.
To understand why Federal Reserve Chairman Ben Bernanke's efforts to restart economic "growth" have failed so completely and miserably, we need to compare the present with the end of the Great Depression. There is a wealth of irony in the Chairman's supposed expertise on the Great Depression, as his policies have backfired on "fixing" the Great Recession.
Rather than "fix" the economic malaise by re-inflating the credit-boom bubble, he has only increased the systemic vulnerability to a much greater crash.
This is akin to an "expert" on World War I recommending a bigger, stronger more costly Maginot Line as the "solution" to military vulnerability.
In the Great Depression, excessive speculation built on systemic fraud and embezzlement led to the implosion of a vast credit bubble.
The "solution" touted then and now by saviors of the Status Quo was to "save" the financial sector and debtors by substituting Federal spending (with the money being borrowed via the full faith and credit of the U.S.A.) for collapsing private borrowing and spending.
This "solution" failed because it refused to address the real problem, which was over-indebtedness in service of mal-investment. People lost faith in the system for good reason--it was fraudulent and opaque, and thus mispriced risk. If you can't price risk or assets, then it's insane to either borrow or invest.
The "solution" to the Great Depression was massive Federal debt and spending on World War II--but the "solution" had a key characteristic that is almost universally ignored.
Depression-era calls to bulldoze homes to be rebuilt and destroy grain so it could be regrown were rightly dismissed as mal-investment on a vast scale. But war is more or less an equivalent "consumer" via destruction. Hundreds of ships were built and then sunk, thousands of aircraft were built and then shot down or lost, and monumental mountains of provisions and supplies were manufactured and then either consumed or lost to enemy submarines, bad weather, rot and a host of other causes.
At the end of the war, most of the leftover goods manufactured--ships, tanks, aircraft, munitions, etc.--were mothballed or scrapped.
Despite this staggering waste, the war spending launched a long boom. How did it work this magic? One, it constructed new plant; unlike the Keynesian calls to bulldoze houses so they could be rebuilt, the war investment created factories that could then be converted to produce consumer goods.
More importantly, the war spending created a vast pool of private capital--what we call savings. As resources were diverted to the war effort, rationing limited both the manufacture and availability of consumer goods. Meanwhile, tens of millions of people were put to work, either in the Armed Forces or in the war manufacturing sector, and most had few opportunities to spend money. Industrialists also piled up war profits.
Though extend-and-pretend policies did not write off the overhang of debt that had depressed the economy and destroyed the market's ability to properly price risk and assets, this gargantuan pool of private capital simply overwhelmed the remaining debt overhang.
Third, trust in the system was restored: the Federal government had effectively "won the war" by printing money and drawing upon the nation's vast surplus of energy and labor, and the manufacturing and financial sectors had been brought to heel by the extraordinary demands of the war and by legislation that had responded to financial fraud and over-reach.
Recall that the root of "capitalism" is capital. Capitalism requires two fundamentals--capital to invest and open markets for goods and services that openly price risk, assets, hedges and goods.
Note that debt is not listed. Debt is not essential to capitalism. Indeed, if we explore the roots of modern capitalism in the 14th and 15th centuries, we find that commercial credit and hedges were the key ingredients, not debt. Lacking sufficient coinage to handle the rising volume of trade, merchants settled accounts at the great trading fairs in Europe.
Long, risky trade voyages were hedged with the equivalent of options and limited stock companies that distributed risk for a price. Leverage was limited by the transparency and appetite for risk.
Compare that with Bernanke's policies, all of which severely punish savers (i.e. the accumulation of capital) and reward leverage and debt. By lowering interest rates to zero, Bernanke has imposed the opposite of the World War II experience of forced savings--he has made cash into trash and pushed everyone into risk assets.
By making credit dirt-cheap and backstopping financial-sector losses (i.e. institutionalizing moral hazard), Bernanke has destroyed the market's ability to discipline mal-investment and openly price risk and assets.
World War II launched a boom precisely because private capital accumulation/savings were enforced; when the war ended, there was a vast pool of capital available for investment and consumption.
Bernanke's policy is to punish capital accumulation and reward leveraged debt expansion. Rather than enforce the market's discipline and transparent pricing of risk, debt and assets, Bernanke has explicitly set out to re-inflate a destructive, massively unproductive credit bubble.
This is why Bernanke has failed so completely, and why he will continue to fail. He is not engaged in capitalism, he is engaged in the destruction of capital, investment discipline and the open pricing of risk, debt and assets. When the next "credit event" sweeps round the Fed's Maginot Line of encouraging mal-investment and masking fraud and rolls up the entire financial sector's defenses against mispriced risk and credit, Bernanke will be inside the over-run HQ, wondering how his "brilliant" policies could have failed so spectacularly.
If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times (print edition) or Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One. The solution in one word: Localism.
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Bernake's goal is to bail out his bankster friends and sponsors of the political establishment, at the expense of everybody else. Forget about the rhetoric, this is what this has always been about. What makes you think that he is failing?
indeed. hes been quite successful at keeping the zombie banks in business.
As someone who has actually read a few Keynesian textbooks, they actually believe this aggregate demand bubble-reinflation stuff. I think that others (e.g. powerful players on Wall Street) realize this is guff and that it ultimately damages the real economy but go along with the autistic mathematicians like Bernanke who are hypnotized by numbers and demand curves becase they want the quick $$$.
the bernank hasn't failed...the financial system hasn't collapsed.
a growth system will collapse at such time as growth is no longer feasible. Bernank has forestalled that.
Please wake me up when a Malthusian makes a correct prediction, trav. As far as I know they have been wrong about everything, ever.
the financial system hasn't collapsed.
Zero return for savers, risk of loss of all your capital, government intervention minute-by-minute in the financial markets.
Capital allocation by tyrants can hardly be called a free market financial system.
Bernak=Rain man.....
"need to go to Kmart....."
Absolutely. He is succeeding far beyond his wildest dreams. CHS has clearly labeled himself a believer in fairy tales, the hallmark of childish logic.
Are these people never going to get it?
Frankly, Mr. Hugh-Smith ( by way of Mr. Durden ), taking into account this audience, you are preaching to the converted.
Mostly, perhaps. It's still scary to see how many will compartmentalize this knowledge rather than extrapolating it across the whole of the environment. I run into this constantly when I talk with people who can recognize blatant fraud where they have inside knowledge, yet in the next sentence expect that another equally fraudulent entity will "uphold the rule of law" and fix it.
Anymore, I just roll my eyes as I take another drink.
There is and will always be a very real cost associated with creating capital. History has shown that, depending on the technology of the time, you can ignore this for varying amounts of time. The system works so long as people and institutions are held accountable through bankruptcy and prison. But once the moral hazard is unleashed and fraud rules, eventually the bill comes due and bad debt and irresponsible behavior chokes ALL productive investment.
The disruption of critical supply lines always leads to real wars and revolution. Same as it ever was, hedge accordingly.
We are entering the advanced stages of currency wars and begining some genuine trade wars. Real wars coming. If you can't put your hands on your "investments" you don't "own" them and they will be of little use to you in the future.
Property and Plunder (from The Law by Frédéric Bastiat 1850)
Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.
But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.
Now since man is naturally inclined to avoid pain — and since labor is pain in itself — it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.
When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor.
It is evident, then, that the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder.
But, generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws.
This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds.
Absolutely brilliant and concise. Otherwise known as the universal depravity of man.
It is the 1%/99% rule.
1% have all the money/99% don't.
1% care/99% are on their I-phone chatting to anyone who will possibably listen to their Walmart shopping experience.
Soilent Green is the electronis crap made in China for the masses, financed by the FED greenbacks.
???
What can it even mean to start a sentence with the word "anymore", with no antecedent negative statement preceding it? I've heard or read people doing this several times lately, and remain completely baffled by it.
like.."it's 5 o'clock somehwere....." ??
education? WE DONT NEED NO STINKING EDUCATION!
(rock on akak)
It makes perfect sense if you don't try to parse it like a grammar nazi.
Yes. Those who prefer idiotic ideas expressed in impeccable grammar should surf over to the NYT site.
At least he didn't say "Anymore, I just rollING my eyes....."
I guess asking people to make comprehensible statements is now considered being "a grammar Nazi", huh?
I have no fucking clue what that person was trying to say by adding "Anymore" to the start of that sentence.
The word "anymore" ONLY has meaning when it follows a negative statement. Since it did not follow ANY statement, it was just gibberish.
Anyway, nuff said...
http://en.wikipedia.org/wiki/Positive_anymore
Still, it is succinctly stated. I passed the blurb along to my acquaintances as a statement why there was no reason to expect improvement in the economy until we get political and systemic change.
Just A Sampler Plate of The Predictions of The Bernanke, Circa 2005 through 2007- YouTube
The Bernank said "housing prices have never fallen, and I don't expect them to..."
The Bernank. The Man. The Professor. The Economic Historian. The Fractional Reserve Charlatan. The Prophet. The Legend.
More like a "Poo Poo Platter" than a "Sampler plate." Not to quibble or anything.
Bernanke and the global bankers have been a total success, all planned and carried out and no one stopped them.
Charles buys into the Big Lie, that the FED set out to save US when what he was doing all along was the greatest transfer of wealth in history.
Success.
Charles again misses it.
The whores of Babylon are on their knees, begging, pleading for more QE from Ben 'Easy Over' Bernankincide:
5 Tech Stocks to Watch if QE3 Happens
Exactly.....it's all relative!
Beyond me that he is held as someone who is smart AND an economist....Fucking obscene. I will bet a big corn turd if you go to the average college and in Econ 101 you ask those people what to do in this sitch.....YOU MAKE YOUR BED, YOU LIE IN IT. (lie is the key word)
Add to it a bit, just a bit of history- or- look around....baby boomers. OF ALL THE TIMES IN HISTORY WHERE YOU NEED INTEREST RATES TO STAY NORMAL THIS IS IT...when thousands a day are hiting 65 and need interest for their savings...WE GET INFLATION AND ZIRP.
WTF???
He is obviously trying hard to derail the nation, the economy and the world.....HE IS NOT THAT DUMB....NO WAY....HE IS NOT THAT DUMB AND IT MAKES ME BELEIVE HE IS DOING IT FOR A REASON....I cant help but feel he is like Hitler economically....IT MAKES NO SENSE...HIS ACTIONS MAKE NO SENSE...
IT'S AS FOUL AS THE SHIT I JUST DROPPED OFF.....
THAT is the scariest part of it....HE IS DOING THIS SHIT ON PURPOSE....
It makes sense if you see him as the main protector of a status quo which knows no National boundaries and will do anything to maintain their status and power over others.
Agreed. I recall watching Geithner being questioned about TARP before Congress. After a short time I recoginzed that when Timmy talks about the end of the world, collapse, etc. what he means is the end of people in his slice of the economy if they are made to accept the losses occasioned by their risky invenstments. It was clear that he he believes that banks and financial companies are the real economy, and they must be shielded from harm by any means necessary, including the seizure of capital belonging to the middle class, earned one hour at a time. He did not articulate what they would get in return for having their earnings liquidated. And no mention what happens to the rule of law when the powerful are assisted in plundering the nation.
here is the concept that everyone often forget: the fed doesn't work for people, nothing really works for or is for people, people work for banking profits.
The problem is that as someone mentioned in lack of regulation and accountability but having it now is as likely as snow in hell.
He will continue to fail till he has a tight rope around his neck.
We hear how Bernanke is so stupid and has failed, etc, etc. But this is SO wrong. He is a complete SUCCESS. He is a Rothschild himself, and what do the Rothschild Zionists want to achieve? They want to achieve one world government, with all of us losers as debt slaves. THEREFORE, Bernanke has achieved his aims admirably and will continue to do so, because these are the goals for the last 100 years and more. Why don't intelligent people realise that? It is so obvious.
Why don't intelligent people realise that?
Either they are not intelligent, or are too busy posting pictures and stories of themselves globe trotting...please, just buy my kindle garbage.
Oddjob -- how about a family portrait ?
http://weakonomics.com/wp-content/uploads/2010/08/young-bernanke.jpg
sweet blazer.
Unfortunately, belief systems are instilled during childhood. To walk away from failed beliefs, is to embrace a suddenly incoherent existence. Most are far too invested in their beliefs to do this as they would otherwise suffer the typical "mid-life crisis" (a.k.a. confrontation with their cognitive dissonance).
So instead, they externalize, criticizing how others fail to uphold the facade, rather than noting the facade itself.
It's the very same thing I just slammed GW for on his "begging for SOPA relief" post. These are the people that empower the destroyers, wittingly or not.
more than that... a massive amount of money has been poured into the project for a very long time... to buy control of information, control of the propaganda channels, the medical system, the political system... whatever it took to create a fantasy world for the sheeple to populate while the pieces were slowly installed in place. the mask is coming off now, time to do or die for both sides.
Yes, yes. That good ole Matrix.
Who owns the Federal Reserve?
Funny, how something as important to a gov. as a central banking system has to rely on a 30 yr. old staff report to determine who owns it.
Yet, I'm not laughing.
@baby_BLYTHE
Kick ass link with tha chart .. do you have more info like that
Thanks
Cheers~!
You might find this interesting. G Edward Griffin's (Author of The Creature from Jekyll Island: A Second Look at the Federal Reserve System) take on JFK's executive order 11110 "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the treasury." Many believe this act by JFK was designed to put an End to the FED by removing its Monopoly over money/credit creation and it was because JFK did this that the banksters had him killed. Griffin differs on the consensus of this hypothesis and explains his conclusions on Kennedy's reasoning behind the executive order.
http://www.freedomforceinternational.org/freedomcontent.cfm?fuseaction=jfkmyth
Griffin is exactly correct in his assertions regarding JFK and silver certificates/US Notes. That absurd theory that JFK was somehow "taking on the Fed" is just such a gross misreading and misinterpretation of cut-and-dried monetary history and status-quo policies of the 1960s that I was dumbfounded with derision and laughter when I first encountered it (on the internet). It truly dismays me that so many otherwise well-meaning people have bought into such a complete fabrication and, yes, conspiracy theory of the worst possible kind. JFK in NO WAY did anything to challenge the Fed or the fiat currency franchise --- he was just as much a statist as the typical politician, then and now.
baby_BLYTHE
Thanks ... yes i have read all of those
I love that flow chart ..
I have been trying to find more that show the flow chart of the crown crop and its play down to teh banks and media.
peercrackers, here's the orginal document:
http://www.scribd.com/doc/46627723/Federal-Reserve-Directors-A-Study-of-Corporate-and-Banking-Influence-Staff-Report-Committee-on-Banking-Currency-and-Housing-House-of-Representative
"Secrets of the Federal Reserve" Q & A___eustace mullins
http://www.barefootsworld.net/fs_m_q_a.html
this is as far as any known, 'human being', has gotten to uncovering the clandestine functional apparatus operations of a neo-communist 'european politburo-presidium',... short of absolute totalitarianism - and i'm being gentle with my adjectives
old stuff, but so real?
Yep, time for you guys to grow up, leave your third world status behind.
Get yourself a proper real federal central bank owned by the American people.
I've posted that link here numerous times. It's an old chart, but I kind of doubt any of the families have sold their shares.
Bernanke is a Rothschild?? Thats a new one. How do you know?
the squid that weaves an impenetrable net with eight hands - never stopping to look back - but, forever swimming the rut on a long pair of cartilaginous web feet,... always fearful of being consumed by the schooled bait fish?
Ref: Kofi Annan - Secretary General of the United Nations [1997-2006 / 10 yrs]
http://en.wikipedia.org/wiki/Kofi_Annan
*Surprise___ Married to a Rothschild and co-winner of the 2001 [Rothschild?] Nobel Peace Prize!!!
Very good point. If you find yourself thinking that your enemy is stupid -- he's already won half the battle.
People have heard of the scientific method, but they think it has nothing to do with daily thought. They all still try to make the data fit their models, and when the data doesn't fit they say "That guy Bernanke is stupid!".
And that is the definition of insanity.
I got news for you--Rothschild don't own shit-- the guy with the gun owns it-- you don't believe me? Walk down some alley in downtown Detroit. The guy with the gun stuck in your mouth owns it-- argue with him -- he'll show ya quick. You see its like the house of cards thats five miles high-- The bottoms out of it but the top is still waiting for the message-- the "Rothschilds" ,as you like to call 'em' and their ilk and the people like you who think they bought a "stair way to heaven" will pretty much wake up soon--cause it's the price of turnips thats going to set the standard, IMHO
Yet another Bernak Econ 101 article. I sure hope someone in Congress reads it so they can stop this man from...ahhh, screw it, nevermind.
The Congress is owned by the same people who tell Bernanke what to do. How could it be otherwise? In a fiat currency world, the people who are empowered to create money will shortly control everything. Fiat 'money' and democracy are mutually exclusive.
Democracy is nothing but mob-rule and is wholly compatible with the fraud of fiat. The term you're looking for is "a free society."
No, democracy is "people power". The people cannot have power in a world of fiat money -- or rather, they will have only as much power as the money-creators permit them.
My point is that power no longer resides in people's ability to vote for different representatives. The money-people own all the representatives, and only permit political disagreements between the 'two parties' where it does not threaten their interests.
I agree, though, that democracy is not the same thing as freedom. I'm working on that.
1st off let the country print its own money .
why pay some zionest tax for doing it
I think it was probably the absolute economic destruction of all our competitors in WW2 that launched the US boom. We were able to grow our way out of the debt because we were really the only completely functional capitalist economy.
Excepting that to be capitalist, you can't have a central bank.
?? Capitalists LOVE central banks.
Mostly because they own them.
pods
(Imagine Steve Martin yelling at John Candy...)
"THOSE AREN'T CAPITALISTS!!!"
That US boom was fed by the German technology we took after the war. The patents, scientists, technology.....http://waronyou.com/forums/index.php?topic=2292.0;wap2
Feeding a Black Hole consumes a lot of matter
They threw trillions in worthless US tinder on the fire and failed. The more the egghead Keynesian squirms the tighter the noose gets-LOL!!!
"The Los Angeles County median home price is down 6 percent year over year. This in itself fails to highlight the deeper changes occurring in the most populated county in California....Let us look at the top 20 falling zip codes for 2011 in Los Angeles County."
http://www.doctorhousingbubble.com/top-20-zip-codes-list-los-angeles-cou...
Bernanke is a puppet of TPTB and is not an independently minded central planner. He is given orders and carries them out under the veil of 'monetary policy' (printing money and handing it to his friends) while the remainder of the 99.9999% of the population must work their asses off to collect the few pieces of fiat that trickle down to main street. Bernanke #winning. Everything is working just as planned. His masters must be very pleased.
Everything is working just as planned. His masters must be very pleased.
Yes! Speaking as a puppet master of TPTB I can highly recommend Dr Bernanke. He is a diligent and loyal servant. He's a model of discretion. And when you get a few dinks in him at a soiree he can even be good for a few laughs. We're considering rewarding him with a mountain-top chalet inside of our armed compound when this is all over and we rule the slaves
hey, baby_B!
what if there is a general crisis of faith that TPTB are in charge? might be fun...
100%
"...(i.e. institutionalizing moral hazard)..."
Exactly.
This on the back of overvalued housing markets (A.K.A. equity ATM's), fomented by Greenspan, CONgress, banks, and uneducated/reckless consumers.
The real collapse began in 2004 as Greenspan ramped up rates so that all the people who had been sold an equity ATM by their banker making fees and commissions on loose regulation were squeezed tight.
As the ARM's went up, ability to pay collapsed.
The MBS and CDS high leverage gambling game was the second to last step in the chain (plan?), and was designed to maximize income and bonuses for Wall Street before the game ended.
The last step in the "privatize gains/socialize losses" playbook was for the banks to be bailed out.
The Bernanke ZIRP is now requisite because a rise in rates will collapse housing even further.
Banks = happy because they get all the cash they want from the FED back door at 0.5% while lending it out at 5%-29% to cash strapped victims of their skullduggery, AND their crap loans shovelled over to Fannie/Freddie.
Ben is getting ready to hand the reigns over to Corzine.
Bernanke is a thief. Plain and simple.
He only cares about his Ivy League bankster friends.
His mother does have a nice ass, however.
At least Marie Antoinette served the peasants cake.
Try getting a single piece of candy from the Bernank.
He won't be happy till he screws all the children out of their lollipops and hands the sweeties to J.P. Morgan.
The old trope that the depression was "cured by the war" is false for 2 reasons. US was growing GDP by double digits starting in 1934 and that set up the capacity to win the war (not because of it). If prosperity was only a war "bubble" it would have fizzled within a few years. And we know that prosperity was maintained for a couple-four decades.
The war trope just sets the US economy on a cynical course which implies that economic security is only possible if we build arms just to blow them up and rebuild them (while expending the natural resources needed to build them, of course)
That wasn't prosperity. It was private debt and entitlements.
Yeah 'Right'. US had the biggest industrial might, technological might, and sophisitcated labor force. Public Debt plummeted from the end of ww2 through the 1970s, only to pick up big time in the 1980s
Fine.
K.
A COUPLE decades.
Nit Picker.
the US was literally the only industrialzed nation that wasn't burnt to the ground after WW2. so it was, in a sense, "cured by the war" - but not in the Keynesian sense. debt creation and stimulus had nothing to do with it. we were simply the only place where things could be built at the time. that's no longer true.
US was in prosperity before the war also. And during the entire period of isolationism of the 19th century. You have been successfully programmed.
World War 2 has been won by the People of Soviet Union with over 30 million lifes sacrifised. You should never forget about this. Rest of allies played minor role in that victory.
If you are truly against ignorance, you should include common US ignorance on this topic as well.
http://en.wikipedia.org/wiki/File:World_War_II_Casualties.svg
Maybe if they were reminded ad naseum like other peoples have done, more would care less. Beating your grandparents dead horse is strangely fashionable within certain circles.
World War II ("The Great Patriotic War", lol) may have been "won" by the sociopathic leaders of the USSR, but it was certainly lost by each and every one of those 30 million who were poured into the battle in human waves, poorly equipped, frequently freezing and starving, and with NKVD agents often pointing guns at their backs to press them forward into hopeless battle and slaughter.
I am not minimizing the sacrifice of those 30 million, but condemning the brutal and callous disregard for human life by monsters like Stalin and other Soviet leaders. People have often stated that, if they could go back in history and kill one person, it would be Hitler, but Stalin would unhesitatingly be at the top of my list.
All of this is very true. That's why i never mention soviet leaders, who were obvious criminals, as contributers to that victory.
It looks to me, like Stalin was actually playing Zerg from Starcraft game.
But the point i was trying to make is that only because of those sacrifises you guys, have lost almost nothing. And claiming that victory for yourself is truly ignorant.
You could only imagine how histroy would have turned out of all the might of German military machine was directed towards England and US, while maitanting peace treaty with USSR.
To be fair, I have rarely if ever run across anyone who would dismiss or ignore the contributions of (the people of) the Soviet Union in beating back the Nazi death machine. It's just too bad that the Soviets ending up building and using an even greater death machine in the process. And let us not forget that the USSR --- well, Stalin, anyway --- was initially, and for two years, an ALLY of Nazi Germany, particularly in the shameful dismemberment and occupation of Poland.
Perhaps if Josef Pilsudski had been able to convince the other nationalities between Poland and the USSR (Lithuanians, Latvians, Belarussians, Ukrainians) to form an Eastern European Federation in the aftermath of World War I, as he had hoped and dreamed, they might have collectively just been strong enough to deter Hitler from his evil designs on Eastern Europe from the beginning, and either prevented the war from starting in the first place, or been able to defeat Hitler or halt his advance long enough for the western allies to deal him the final blow in tandem with themselves. Too bad the nationalistic provincialism on the part of the Ukrainians and Lithuanians, and overeager and premature revanchist military campaigns on the part of the Poles, doomed such efforts from the start.
Dzien dobry!
Maybe the USSR should have thrown in with the Allies against Japan. We had two fronts.
yes full on respect to every russian who paid the price of freedom for all of us... and i still believe in the coldest weather they would fuck any army hand to hand warfare...
Belarusian Bull
Rest of allies played minor role in that victory.
I gots ta call bullshit on ya. That drunken ass Stalin could have saved at least 10 million Russian lives. But he didn't give a shit.
And without American planes flown thru Canada and Siberia, and American trucks transported thru Iran you Russkies would be talking Deutsche right now.
All the best. Kayman
Oh and Bernanke will fail because he has created a new monster: Biflation.
It will crush the middle class, create a schism in society and blow up Pax Americana
Once again, for him, that is another win.
(Are you forgetting that the globalists will have to break everything in order to usher in their new age? That includes Pax Americana as well.)
Here's a "fixed it for ya...":
Not break everyTHING... break everyBODY...
Oh right, forgot about that. So he's actually Winning! Except in one respect: his mentor Friedman and Reagan's supply-siders are getting egg in their faces
Look at the size of the Fed's Balance sheet. And what good its done.
http://confoundedinterest.wordpress.com/2012/01/08/fed-bailout-of-eurozo...
FYI, any profits that the Fed generates goes to Treasury. And losses that the Fed generates goes to Treasury too. AKA, taxpayers.
So yes, Viriginia, there IS a big cost to that bloated balance sheet.
Bernanke is doing a fine job.
Signed, the New World Order.
Which is really just the same Old World Order.
Yeah "old world order" like king John with his sacks of gold stuff dead from the shits on a cold muddy country road in rural England--LMFAO
Meet the new boss...same as the old boss
God damn right Bernanke failed. He and Geithner are such bumbling little dweebs, and are doing such a good job removing the entire cartel's clothing that even common sheep understand what's going on if you engage them now. Unless the plan was to start Mad Max.....uhh yeah he failed.
There are only TWO options, and BOTH result in collapse!
1) ZIRP - can't push on a string; the attempt is to increase velocity, but the problem is is that (as someone above correctly noted) that it's all going in to a black hole (filling holes in banks' balance sheets); it's stealth inflation (they really can't allow deflation!);
2) Jack up interest rates - many claim that this will make money "smarter," yes, but it's going to do so to such an extent that money will find that everything's worthless! if people cannot push on a string w/ZIRP, increasing interest rates isn't going to help them push (and just think about the massive, immediate collapse in the housing market with refinancings).
There's nowhere to run. One can see this as either sinister in nature or one can see it as a physically-induced reality. I see the later; the reason being is that the physical world (thanks to pumping up the BRICS) is now balking at delivering the resources that growth has been demanding.
Our entire paradigm is in question. Given that nearly all aspects of our lives are subsidized and that capital investments all depend on such arrangements, it's no wonder that capital can't find any meaningful path.
On one hand things will become more expensive (to reflect true scarcity), but on the other hand things will become less desired (because people cannot afford them). This will create a massive squeeze on margins, ultimately setting in as a reversal of economies of scale.
Bernanke cannot keep this going forever because the System itself cannot keep going forever. Yes, some people will be able to make some "money" off of shuffling the deck chairs, but don't confuse them (or even the captain) as having any control over the fact that the iceberg has already been rammed.
You forget the option they really want: slow decline. That way no debts get canceled, they collect on debts incurred druing the peak of the boom while everyone else gets boiled in oil as incomes and net worth decline
I was talking about paths rather than the speed traveled down them. Each of the directions I noted does have a speed component. But, yes, in general it's typically more desirable to draw out the impact.
While greed IS part of human nature, I'm thinking that these people realize that it's more about SURVIVAL at this point, survival of the System. It's not quite clear yet whether they understand that the System (whether gussied up or not) CAN'T survive.
"They" will eventually have nothing to maintain their power. The general populations won't be distracted by iCrap. There won't be enough energy available to offset the increased disarray in the System: entropy will overwhelm their ability to maintain control (within the System).
+1
Want in one hand s--t in the other and see which fills up first. "They" are old and dying and what they want will soon be forgotten--you heard it here first.
Liquidity trap; Pushing on a string; Kicking the can; Digging a hole; Whistling past the graveyard; Extend & pretend; Attempting to salvage CONfidence; Ramming the iceberg at full speed.
El Bernankio.
very liturgical, TIS!
once he produced inflation, told us [in his first press conference] it was "transitory" and then produced deflation many were impressed by the satanic majesty of it all coming, as it were, after the bigSave as green shoots were withering in radioactive gamma
as the elusive extra zeros keep flitting around the worlds' gas stations, zombies everywhere are asking: what's for dinner?
most part i agree. point one, we are conforming
to the mathematical dictates of a ponzi money system
in this exercise so there are no logical and consistent
solutions that don't result in systemic failure when
you have already exploited the 30 years and
beyond buffer zone of temporal can kicking at near zero
interest rate.(3%?).
10 year 2% and 100 trillions in obligations....
so failure is on deck but when? who knows?
but i would say there is precious little that protects
the masterminds of proximity to the presses from the
general population of a few hundred million. that is
purchasing power, government spending and pensions.
so for the purposes of this point of pensions, the fed
, imo, will do whatever it takes to delay the destruction
of the market value of the pensions till the end. when this
group of "investors" gets wiped out the guillotines will
be mass produced and put into overdrive. i could be very wrong
but i don't think so.
they should just come clean and explain it has all been
fraud since 1913. oops, sorry. we didn't do it, we weren't
even born yet.
He has no other choice but do hit the print button!
you could make the case the depression never ended, the war merely papered over the structural problems. remember one of the counter intuitive success stories of the depression was the restaurant industry, (consumer discretionary). farmers were plowing food under, people were starving but diners and restraurants were doing quite well (read Mildred Pierce, by James Cain)
by the start of the war most people had money and were doing well enough. most of the media images taken by photographers who were paid by FDR were propaganda, so he could pass his New Deal. there is just as much suffering and poverty today, but the New Deal was already in place, including 40M food stamp recipients.
the economy didn't work then, and it doesn't work now regardless of the images. the second American revolution never happened in the 30's, because of the war mostly, and is slowly happening now. just because you don't see roving bands of homeless people it doesn't mean the economy is working. Obama would like to tell you that, Bush made a thousand speeches about the strength of the economy, and every one was a lie.
but Bernanke hasn't failed, the only way he could fail is if he didn't do anything. the definition of failure, is the failure to be proactive, not to achieve some purpose, but to do something, anything, even if its wrong. Bernanke merely kept his hand on the tiller, where its been for nearly a hundred years, which is how long its been since the depression started. the first bump was 1920 I think. its just really amazing that in a society with instant information, education and communication that no one notices we haven't moved a bit economically in one hundred years, despite the inequity of the system. except of course the rich are richer than ever, which is the ultimate end of capitalism?.
The illusion was painted using OIL, and I'm NOT talking just oil-based paints!
Everyone wants to pick a time/era that was some "turning point." I don't think that things have ever really "turned," but then again I'm no historian nor have I been around since the beginning of time (to see firsthand). Can't help but think that some of our problems might have come by way of early programming: Go Forth And Multiply, without any conditionals applied (though, I have to wonder, whether the idea of no usury might have been once such attempt).
"Of Human Bondage" says what you allude to.
to the victor go the spoils and the writing of the history of events
and their significance it has been said.
i would add the advantage the usa economy received from
termination of wwII hostilities was mainly due to the fact that
the defeated nations were eliminated for a generation from
production and had to pay for their own reconstruction.
like slavery. slavery of one kind or another is the worlds
"economic" miracle. it alone creates great wealth and it
always will until we address the issue honestly and fairly,
we will not have peace or civilization. imo.
this is the new paradigm. how to create an ubiquitous
milieu of plenty and quality in cheerful social relations?
it is not an unrealistic or super-human task it. it does however
require all human attributes of integrity and quality .
You cannot be a slave if you can feed yourself.
Civilization* is unsustainable. As it becomes more apparent that that's the case then there most certainly will not be any ability for peace to exist.
* http://www.endgamethebook.org/Excerpts/3-Civilization.htm
anyone can be made a slave, even those who can feed themselves,
by a system that has that objective and the means to
accomplish that result. it won't work in the case of every
individual but statistically it can be done. history has
recorded the thing repeatedly but i agree with the meaning
at the heart of your statement. controlling the food supply,
production, supply lines, is the mechanism to sovereignty or
denial of it.
,
Gary Null - The Natural Living Show
Economist Dr. Michael Hudson.
http://archive.wbai.org/
Thursday January 5 12:01pm
.
assuming production and supply lines, transportation,
then legal tender or currency or money becomes the
cultural meme central. assuming. and it gets so much
attention because it is fungible across the array of commodities
and human socio-economic activity, often its preeminence
misunderstood due to assumptions of availability of supply,
the endless resource assumption inherent in the infinite "growth",
no degradation from consumption, paradigm. after all the degradation
and debilitating scarcity is not experienced by the elites or their
hired "intellectuals".
It's a vicious circle, no where to run except for gold!
BTW: The indian markets and the RBI is payin 10% on a 1 year deposit (up by 7% in just 6 months), engage in a carry trade at your own risk!
I have a feeling by doing so, the elites are trying to crash the gold market
"I have a feeling by doing so, the elites are trying to crash the gold market"
In the end it will happen. EVERYTHING will be dispersed, whether TPTB want it or not. We'll all empty our pockets until everything is gone, because, eventually nothing except food, shelter and water will be important (and these are becoming more difficult to maintain in the face of increasing populations and decreasing resources). Gold will be exchanged for bullets. Bullets will be "exchanged" ("spent" is perhaps more appropriate) for food... and then, and then...
The expansion of the credit system can, in periods of capitalist expansion, be beneficial for the system; but in periods of economic crisis and uncertainty, capitalists tend, Marx argues, to look to the security of the "money-commodity" (gold) as the ultimate measure of value.
Here is a contradiction of capitalism:
If the ratio of leveraging is "low" (eg, 1:1 in the most extreme case where there is no leveraging), then it inhibits growth. There would be little growth if half the population are doctors, or if banks do not give out business loans. Leveraging is a good way for banks to utilize their capitals more efficiently, as they can give out a lot more loans that they could if their only utilize their capital at a ratio of 1:1 (= if they only give out a few loans, using only the moeny they actually have in their vaults).
If the ratio of leveraging is "high", then although there is growth, the system becomes unstable and collapses. For example, if there is only one doctor per 1.000.000 people, then even an "ordinary" case of flu can become really serious. If there are no doctors in a society, then this society will have the greatest possible number of workers producing goods, but who will "fix" all these workers if they "brake down"? The same goes for the "excessive leveraging" of today's banking system.
Some might get the impression that the best solution would be to "restrain the banks", and to use "moderate" leveraging (ie a "social-democratic" approach). In fact, there are many Keynesian -and other- economists who -rightly- accuse the banking system for being "out of control", asking essentially a status of "moderate leveraging".
This approach was in fact tried during the Great Despession of 1929 - the big banks were broken up, and the ratio of leveraging was somewhat reduced, in order to prevent the system from crashing again. This approach worked for a few decades, but as always, it didn't last long.
This is because, as we said before, greater leveraging leads to greater growth, even if it makes the system more unstable in the long run. The capitalists, blinded by their greed, always end up applying more and more leverage. If for example a bank has 10$, then deep down inside it prefers to give out loans totaling 1000$ instead of "just" 100$, because that will increase its profits, at least in the short term. But this makes the system more unstable. Here lies the problem with capitalism as a system based on accumulation of personal wealth.
Today we are being told that there is "too much leveraging": For example, financial derivatives that circulate globally are worth 700 trillion $ (!) - W. Buffett called derivatives "financial weapons of mass destruction", as their value far exceeds the world's GDP.
The system has being growing for many years through accumulating debt - this is why it needed increased leveraging, so that the banks could create this debt and "compesate" for the flight of industrial capital from the West to Asia.
Now that these loans can not be repaid, the system collapses, and this is why even a "small" country like Greece is causing such large shocks in the world's financial market: Leveraging is so great that even if one borrower can't pay what the bank expects, then the bank will collapse.
http://whataboutmarx.blogspot.com/2012/01/leveragingdeleveraging-give-me...
Marx was very good at critisizing capitalism (hence his main work is called "Capital"). But never actually explained how socialism would work. And for a good reason : socialism doesn't work(ants and bees have achieved communism though).
When people talk about how capitalism fails, it's always good to point out that those fails are actually socialistic in their core.
For instance, i don't really think how an idea of central planning the main good of economy(money) is capitalistic.
And i have no idea, how can fractional reserve banking be called capitalistic.
Last time i tried to leave a shop with 10 apples, having actually paid only for 1 of them, i was caught and called a criminal :(
Too bad, there is no fractional reserve on apples!!!
your apple gambit failed because you went about it wrong. you ( a bank) agree to buy all the apples (money) the store owner (fed) cannot sell if he gives you the right to sell all the apples which are being sold for a small profit. there are in turn other apple vendors who agree to the buy all of the apples from you, so in theory nobody has any inventory, except what the Fed makes them keep, the apples they can't sell.
now the Fed wants to sell more apples and the first vendor doesn't keep any inventory other than the apples the Fed cant' sell. so there are more apples in the system, but the number of apples that aren't sold is always about the same. the Fed isn't worried as the vendors absorb anything he gives them, at least it isn't in view. in fact the extra apples are being dumped in the garbage, and the price is going down, the store (Fed) is selling more apples, so everything is alright with him.
by the time the buyers notice the trash cans are full they have already bought their apples, and the next time the price is lower of course, but there is a bottomless pit for apples, as far as the Fed can see.
and there is really no reason to give the store owner apples he can't sell. why an apple is an apple and no inventory is no problem. so he can't figure out that the only way to stop dumping apples in the trash can is to make the vendors take more apples they can't sell.
the store owner thinks the price of apples should be higher, and in order to do that he has to make apples scarce, which means giving the vendors less or making them old more apples they can't sell. so he decides to lower the cost of buying apples, which he could do by eliminating the vendors, but he can't see that either. he decides to subsidize the buyers of the apples, by giving them incentives to buy more apples, and he holds his apples until they are dead ripe, that way they have a short life and the buyer has to buy more often, and prices go higher. This puts even more apples in the trash can, which the store sees as an opportunity to sell more apples to the vendors.
its a virtuous circle, if you just can't see how most of it works
My gambit was all about apples being physical and cannot be replicated via fractional reserve system, and not about how the entire system works. Nevertheless, thank you for the extended explanation, it was educational.
Central Banking is all about belief. Sleight-of-hand is the best reference. Or in less polite company, the art of Trickfucking the little guy from his labors.
i sometimes wanta make the point that there is no more sweat money, that's another story, and because there is no more taken "from his labors", we were less quick to hang a few of the miscreants, as we usually do when we catch them redhanded. the 1% at the bottom just don't have as much of a voice as they used to when M Antoinette offered them a little cake for their trouble.
one always learns something by putting it all together, apples and money are perishables. (principle of velocity v supply) and of course apples can be replicated if the primary buyer never holds inventory, and the seller is removed from the result at the point of transaction, (apples in the trash) if replication means room for more.
by agreeing to hold merely one apple you gain the right to the other nine. Reserves are "apples you can't sell". It really doesn't matter how many of them you are forced to hold, the flow of apples continues either way, because of the vendor multiplier effect. this is probably capitalism at the core.
in the mortgage crisis the oversupply of credit (perishable money) appeared to begin at the loan originators, who didn't hold the paper (therefore they offered a bottomless pit of mortgage credit with no concern for what happened at the point of transaction) the real point is that the money was flowing the other way, and the mortgages were just the receipts for the transactions. when they couldn't match the receipts to the buyers all hell broke loose.
Further compounding the problem is the fact that people no longer care to eat apples. <replace "apples" with McMansions, HDTVs, iCrap etc>
look up Bob Prechters "Jaguar" story. he asks the question, what happens when everyone has two Jaguar cars? and of course the hidden answer to any of this is not how much these things cost, its how much it costs you to keep them, think storage facilities, home security, pool maintenance, subscripiton fees for Icrap services.
Blame capitalism, blame communism... DOESN'T MATTER!
This is all a handy excuse to NOT talk about the elephant in the room. "Over leverage," blah blah... it's ALL traceable to the notion of allowing perpetual growth. Doesn't matter how MUCH, it matters that growth IS the underlying premise. All these "systems" FAIL to account for a non-growth condition, they FAIL to take into account that there ARE boundaries to which growth ultimately must succumb to. Bad systems FAIL. The scorekeeper is Mother Nature.
The thing, you don't need a system to achieve prosperity. Prosperity does not equal constant growth. Just like Mother Nature, the free market is a perfectly balanced system, where periods of growth would change with periods of recessions in seeking that golden middle called equlibrium, which will never be reached but will always be pursuit.
This is President Obama’s fault for reappointing Bernanke. Obama should be held accountable.
he's also accesory to the fact in the Bush administrations numerous breaches of law and ethics because he refused to investigate. it used to be throw the bums out, now its impeach the bums, and soon arrest the bums, and from there its just gets worse. but some people change their ways when they see the light, and others change when they feel the heat.
thought experiment:
what would happen if you put chs into a death cage with the krugman?
K flips open his cell phone and says "Bleegorb, you are cleared for landing."
CHS swings a sock full of gold into K's right temple. down he goes.
CHS stands over it and pees, rocking back and forth like a drunken mobster.
K mumbles from the floor "Uh, aggregate dema....." before losing complete conscious ness.
fade to a burning metropolis.
Couldn't be more clear, and talk about liberals and socialism: Benranke's policies have been fantastically effective at re-distributing wealth, from the prudent, frugal savers entitled to a reasonable, risk-adjsuted return on their capital, in favor of the overleveraged bankster class. And yet these same guys hold themselves up high as the stewards of free market capitalism. Joke.
Imagine how the economy might be doing if millions of savers actually had an income to spend on their safer investments. Mehthinks a whole letter sounder, if not better.
"frugal savers entitled to a reasonable, risk-adjsuted return on their capital, in favor of the overleveraged bankster class."
I HATE that "entitled" word. My wife's from the Philippines and she regularly remarks at how North Americans' have such a sense of entitlement.
And really, who the fuck says that we're entitled? This is all virtual, cooked up shit anyway. Is this coded in Nature or God? Actually, BOTH seem to discourage this notion of "money for nothing," earning "money" ON "money."
Maybe I'm dense, but my understanding of "money" was that it was for facilitating TRANSACTIONS, not sitting there trying to accumulate interest, interest which is NOT accounted for by the System.
You're asking to be allowed to do what is the very nature of the banksters themselves.
"Imagine how the economy might be doing if millions of savers actually had an income to spend on their safer investments"
Millions? How does that stack up to the global crunch, the global world, the one that has over 7 BILLION people?
It would have meant that in past days they WOULDN'T have been spending, which means that economic activity would have been LESS then rather than LESS now. Does it really matter when the MORE or LESS occurs? It doesn't change the equation that LESS WILL occur.
This is all a liquidity issue. There isn't sufficient REAL (physical) resources to back up the paper. The markets are becoming aware of this, and as a result VELOCITY is collapsing. LIQUIDITY and VELOCITY create growth. Put two and two together and it should be quite apparent that growth is dead. Go ahead, "save" for that which won't be available (or won't really be of any use); and, pray that whatever you have "saved" is thought to be of any use to someone else. Yes, PMs are fine for staying in the Game, but the Game won't continue forever- timing is everything.
I HATE that "entitled" word. My wife's from the Philippines and she regularly remarks at how North Americans' have such a sense of entitlement.
Well she is probably unaware of how real economies function. Time Preference Theory probably doesn't function on Pacific Islands unless it's Taiwan. If someone doesn't defer Consumption no Investment can take place
"Well she is probably unaware of how real economies function."
"Real?" economies? Isn't that an oxymoron?
Economies are VIRTUAL. They are a contrivance by humans, not the REAL world.
My wife's understanding of how things work is FAR more in-depth than your little demeaning slam is trying to suggest.
Thanks for displaying your ignorance.
WHEN THE MUSICS' OVER...TURN OUT THE LIGHTS!!
Seriously, working for them or whoever.....maybe....BOTTOM LINE HE IS NOT DUMB AND ACTIONS ALWAYS SPEAK LOUDER THAN WORDS...ALWAYS.....Let these fuckers die so we can go on healthier but no.....
BAN THE FED....NOW!!! FOR CHRIST'S SAKE......
senationally brilliant.....a virtuoso annhilation of the fucktarded broken window and we need a war economic theories....
of course the chairsatan is caught between a rock and a hard place....he has to serve the rockefeller-mic-yale-cia cabal that put him in power by bailing out every failed enterprise on which it embarked but he is sort of beholden to keep the titanic afloat by preventing the drunken sailor barry soetoro's monstrous debt from incurring vastly higher interest rates and simultaneously keep the crap on his balance sheet from cratering even further to the center of the earth....
The amount nonsense written about the Fed is a little disheartening. The Fed is a private corporation owned by the banks. This is not a conspiracy theory, it is a fact. This arrangement was sold to the public as a way to keep the Fed "above" the influence of politicians However, like all enterprises it is utterly beholden to its owners, the bankers. Its only real purpose is to bail out the banking system when it gets in trouble: to assure they can always privatize their gains and socialize their losses. The gains are promptly removed from the system in the form of bonuses.
Its secondary purpose is create the illusion that the government is charge of money printing instead of the banks, who actually create (out of thin air) 90%+ of the dollars in the world. Therefore the Fed, by its existence, is a form of propaganda, a smoke screen, a purveyor of disinformation. As such its chairman is a propaganda meister, a lightening rod for the banking industry; that is, he takes all the attention and blame for what goes wrong in the economy, while the banks continue behind his cloak.
So I am disappointed when I read the endless tirades against Bernanke in these comments. Because you're falling for their trick, you are walking the path they have set out for you. His JOB is to absorb your anger, and and deflect your attention away from the real criminals. The madder you get at him, the happier the bankers are, because they know you are still dangling at the end of their string.
Over 100 years the Fed has evovled into a fairly complex organization. The chairman is usually a PhD in economics, which allows him to goto Congress and in front of TV cameras bamboozle the hell out of everybody. He can intimidate anybody, especially the president, who threatens to think for himself about economics. Greenspan was truly amazing in this respect: he could talk for hours and make you think he was actually saying something. But this is all part of the propaganda machine. The Fed also promotes a very aprticular theory of economics, that supports the current structure of banking system. The Fed has the power to blacklist any economist that disagrees with its fundamental tenants. BTW: This theory of economics has no utiltiy apart from maintaining the status quo. It justifies the bankers coontinued pillaging the US people, but most importantly, pillaging the whole world.
This bogus theory of economics is why everything the Fed does appears to be wrong. But that's a matter of perspective. From the point of viewof the banks the Fed is just Fabulous. All their mistakes are being remonetized so they don't loose a nickle. Eventhough they are all insovent, and should be be broken up and put on the scrap heap of financial history, they are getting bigger and more powerful. Exactly as planned.
I can't tell you how all this is going to pan out. I do believe that Bernanke actually believes the bogus version of economics practiced by the Fed. After all, that's what he was taught at PhD school. But, I think he's sweating like a compulsive gambler at the tables, doubling down and hoping beyond hope for the right cards. But the cards aren't even in the deck, never were. The money he's printing is just sitting in the banks, and by the time he realizes he's printed WAY TOO MUCH, it will be too late. And eventually all that money will come spilling out of the banks, multiplied 30 fold with fractional reserve banking, to become more credit money than anybody thought possible. The only way to soak up all that money is by hyperinflating prices.
Or maybe an avalanche of defaults will overwhelm his printing before the banks can multiply it up. I don't know. Makes you wonder if this is going exactly to somebody's plan.
i blame woody guthrie.
The Ballad Of Pretty Boy Floyd
http://www.youtube.com/watch?v=AVUEqycfb5s&feature=related
.
Woody Guthrie - Pretty Boy Floyd
http://www.youtube.com/watch?v=JdeTr3lWPnY&feature=related
As in-depth that this is, and I agree with most of it, it's still superficial. That is, the issue goes MUCH farther. We're all floating up in the air talking about all this shit, while REALITY is back on the ground. This is Nature's issue to resolve: humans have no capacity, lest we cave in to someone else's dogma (all act like perfect robots, either by way of religion or secularism), and even then, if the notion of how to be physically sustainable isn't addressed, COLLAPSE!
"I do believe that Bernanke actually believes the bogus version of economics practiced by the Fed."
I'd say that he believes it only in so far as it allows him to be held above the earth. Greenspan played the game while he was pulling levers, so to, I suspect, is the case with Bernanke.
Yes, this is superficial. But there are so many commenters that just rail against Bernanke and the Fed, when their anger should be directed behind the curtain.
One of the insidious things about the Fed, is that all the PhDs believe a version of the hype. That keeps them going. The bankers know its BS. But I don't think know what's right, they just know the existing system makes them rich, period. Of course, its the OWNERS of the banks that are really in charge, not the managers. And it isn't just US banks, but all the international super banks and their owners.
So who's behind the curtain? There are all kinds of conspriacy theories about jewish bankers like the Rothschilds, which is just anti-semitic tripe. However, the basic idea is right, its just that the owners of banks are hidden behind so many layers of shell corporations, we'll never really know who they are. And of course, they all would steal from each other just as quickly as they steal from you and me, it's just that we're easy pickin's.
Which means, the only solution is:
...
1. money == physical gold ONLY.
2. absolutely positively NO fractional research practices.
3. a permanent total end to recognizing fictions as real.
To begin with, "government" and "corporations" are fictions. They are not real. They do not exist (except in the mind of deluded fools). This is just like Santa Claus... an idea that exists in the mind of fools, but has no referrernt. The other two common formulations of "government" and "corporations" are correct. One is called "DBA" (doing business as), and the other calls them "fictitious entities" (which is fundamental principle of long-standing fundamental law).
predators DBA "government" (fictitious entities)
predators DBA "corporations" (fictitious entities)
predators DBA "central banks" (fictitious entities)
And, of course, fiat money is another fiction.
The state of mankind will forever be totally screwed as long as the fictions are not removed. I guarantee that, and anyone who takes the time to think about how fictions control the vast, vast, vast, vast, vast majority of mankind will come to agree with this.
The only kind of reality that works is real individual people performing real [intellectual and] physical labor to create real, physical products that everyone needs and wants to survive, prosper and enjoy their life... plus trade of real, physical goods for other real physical goods (gold and silver coins quite possibly being popular real, physical goods to accumulate).
ALL the rest is pure, unadulterated fiat, fake, fraud, fiction, fantasy. It is inherently impossible for any human being to have any authority over any other human being. Everyone should understand this. You are born. Another dude is born. You got into existence the same way. By mere symmetry and consistency nobody has any authority over you, and ditto in reverse. Thus the ENTIRETY of government of all levels is PURE FRAUD. Which means, governments that bear any resemblance to what are called governments today must be eliminated... utterly, totally and completely eliminated.
The scam of fiat money and fiat debt and fractional reserve perversion is merely the most deadly form of mass delusion fiction that impacts the world. The rest must go too, otherwise mankind is FINISHED. And that is not an exaggeration, though it may take a few more years to be completely obvious to everyone.
Human beings are by far the most deluded species. No other species would EVER even consider defending the predators that prey upon them. But fictions are precisely what let the predators-that-be and predator-class delude humans into paying the predators who prey upon them for the priveledge of being their prey, and defend the predators who prey upon them from assault or even criticism.
Humans are revolting. They better wake up soon, or they are so, so finished.
PS: My opinion is, the vast majority of humans are toast... they will never wake up. What is so sad, and probably the death of mankind, is the lack of a new frontier where the tiny minority of realists can go and simply be left alone to move forward on their own. Without a frontier, mankind is finished. That's why the predators-that-be made sure the space program went nowhere in 40 years (for practical purposes) after going from zero to the moon in 9 years. No frontier, no mankind. Kaput.
Bernanke has done this one thing.
He has bought the United States time to not be the first major economic power to fail/default.
That fate will no doubt fall to our European friends.
But make no mistake the collapse of the United States economic/banking system will not be too many years behind.
Bernanke can only kick the can down the road for so long.
Though I don't like Bernanke, and I'm certain his actions are doomed to fail, I don't fault the man ideologically for doing the best he can with what he has.
Since the advent of TARP and TBTF in 2008 there have only really been two outcomes of the current scenario... default or hyperinflation.
It is well known that The Politicians and The People (alliteration intended) have no stomach for the former, which simply will eventually leave us with the latter.
It's heartening to read numerous comments here that Bernanke has been a complete success at his real goal. Even though that real goal may be tangentally identified, close is good in this case, it shows people are seeing past the great bamboozling by the MSM.
I see his real goal as stealing as much wealth as possible from the American people, giving most of it to his banker controllers / owners, some of it to the government (for playing along), the rest to various crony insiders.
It's all done under the banner of "monetary policy" and ZIRP and QE to "get the economy going again", a typical "we're doing it to help you" cover story ...which after 3 years of massive benefit to Wall Street and massive harm to the economy (like USD losing 1/3 of its value in 3 yrs), is starting to lose its believability among people who have the slightest interest in such things ...which isn't many actually.
In pursuing that goal Bernanke has been a resounding success, draining trillions of dollars of wealth from the American people (and a few foreign nations foolish enough to buy and hold Treasuries, MBS, and similar devaluing paper assets), and now his latest accomplishment, directly ripping off $1+ billion from brokerage account holders in the (pre-planned) MF Global bankruptcy.
Bernanke didn't do it you say? I disagree. Thanks to recent legislation the Fed has total regulatory control over financial firms including brokerage firms. It happened on Bernanke's watch. He's doing nothing to correct it. He's responsible in my opinion.
Assuming that's his real goal, expect more of it. More printing. More wealth theft via currency debasement. More bank bailouts. And more outright looting like MFG.
The economy? Jobs?
He couldn't care less.
I don't buy into the theory that they're trying to get it ALL. These people aren't stupid. If they have everything, then they really have NOTHING. Here's the reasoning...
TPTB don't do actual work. The drones do it. If they take everything from the drones then the drones are almost certainly going to revolt, refuse to do work for their masters. Up until this point there's been "enough" to scatter around to keep the drones OK with the situation. This is changing. And, yes, there are greedy bastards out there who don't care- such people always end up over-stretching and getting their heads chopped off.
We're discovering that everything does in fact work on very small margins. This is the reality in nature. ALL growth eventually is offset by a reversal, somewhere along the line, with or without a Bernanke, with or without capitalism (be it of the theoretical PhD level or the out-of-the-lab kind)...
I don't buy into the theory that they're trying to get it ALL.
I don't believe I said ALL of it.
Geezer:
I think you misunderstand that the problems Bernanke inherited were not of his own making.
The problems with the U.S. banking system arguably started with Nixon and the end of the gold standard.
The banks bought off Nixon and lots of other folks in the past 40 years or so in the name of greed and the unbridled desire for never ending profit growth.
Along the way we have plenty of other folks to thank:
Greenspan - for his free money policies
Clinton, Gramm, Bliley - for repealing the guts of the depression era reforms and unleashing the banks to wreak havoc based on greed in 1999.
The Congressional Committee that overturned/suspended Mark To Market and allowed the big banks to become effectively ghost entities with no accountability, no transparency and no losses.
You are naive to think that this problem is Bernanke's fault, at all.
I challenge you on the notion that the collapse was spawned from the Nixon era.
You would have to PROVE that there would have been an alternative available, that some other policies would have been possible.
I argue that it has been predestined since we decided that it was a good idea to promote perpetual growth on a finite planet. This isn't some theoretical mumbo-jumbo, this is all concrete fact-based stuff.
If you can demonstrate how and when it was ever possible to alter this paradigm THEN, and ONLY THEN could you ID a point in time.
The Nixon area was only a milepost, albeit a glaring one. It was ALWAYS on our projected pathway; the only matter was WHEN we'd encounter it.
Fair enough Seer :)
There could be no scenario such as the United States faces today if the gold standard was still in existence.
It is the printing of money that is not tied to gold that allows The Banksters to print all the money they want and now renders us awash in unrepayable debt.. except by eventual hyperinflation.
That's why the banks had to put an end to the gold standard.. simply put, they could never make enough money if every dollar had to be tied to the value of an ounce of gold.
The Nixon Buyoff was the beginning point at which the big banks usurped control of the United States government, and, as is common knowledge, they own it to this day. One only need look as far as the current GOP Gyrations (alliteration intended) to see that Romney (the candidate hand picked by the banksters) is completely in the pocket of the banking lobby, as was Obama. There are no real choices that currently exist in US government, with the possible exception of the continuously marginalized Ron Paul. For a real, tangible example of the Banksters power read this:
http://www.pbs.org/wgbh/pages/frontline/warning/interviews/born.html
The banksters make more money off of the derivatives than any other source, approximately 60% of bank profits come from derivatives. The derivatives market is COMPLETELY unregulated by ANY government entity. The link above shows what happend when the SEC tried to regulate the then fledgling OTC derivatives market.
The problem arises when the banks are allowed to become greedy. Enter Clinton, Gramm, Bliley. The Depression era patriots saw (and knew first hand) what the banks could become in the absence of severe restrained government regulation. Unfortunately, as of 1999, that was all erased and forgotten.
Some might argue that the Fed is the real culprit, being seen as a tool of the banks, however I disagree. The Fed, if used properly could have been used (not now obviously) to give the banks some breathing room (and hence prevent a banking catastrophe) in the advent of certain types of crises. Believe me, I'm no fan of the banks. They are a necessary evil.
I believe that was a part of the original reason for the founding of the Fed. The Fed has been quite twisted in it's mission since that time, as we know.
And so we find that the greatest fear of the Big Banks is not massive losses but rather the reinstatement of the gold standard by those who must one day wrest control of the United States government back from The Banksters.
Dare I say that perhaps the only path to such a reform might be some sort of popular revolution.
I really hate to be so dramatic about it.
Really.
You are naive to think that this problem is Bernanke's fault, at all.
I don't believe I said it's all Bernanke's fault.
What matters though, is the Fed has full authority over the banking system, and the Fed is doing NOTHING to stop all the fraud and looting, quite the contrary, they're allowing it to continue, going right along with it.
THAT is where Bernanke is responsible.
Geezer:
You are naive to think that the Fed has full authority over the banking system.
The current economic/banking problem does not have it's roots with the Fed.
That's my point.