This is an important video focused on what the German demand for repatriation of its gold from Bernanke’s FRB/Central Bank really means. Well worth taking the time to watch. Blessings ~G
Voltaire said in 1729: “All paper money eventually returns to its intrinsic value – ZERO.” WE were warned – almost 3 centuries ago. Bernanke announced QE3 on September 13, 2012 – the next step in the process of pushing the dollar down toward its intrinsic value. Not only is the Fed making a commitment to purchase $40 Billion per month of MBS (mortgage backed securities) from large banks with “newly printed money,” it is also making an open ended commitment – there is no end date. Ultimately this is highly inflationary for the American public and very beneficial for the banks holding what is often referred to as “toxic waste” (MBS) that can be dumped onto the Fed at full face value. Hopefully the bailouts to the banks will allow them to loan that newly created money into the economy so it benefits real people and “Main Street.” Regardless, we have been warned about the consequences of printing money and the resulting consumer price inflation.
QE3 looks like a desperate act to feed money to large banks, offload MBS toxic waste from their balance sheets, and devalue the dollar against houses, commodities, and other currencies. There will be significant collateral damage but apparently funneling money to the banks is more important.
It was inevitable that such action created an abundance of commentary. I have quoted a number of respected economists and critical thinkers on the subject of QE3. All links are listed at the end of this article.
Peter Schiff is a best-selling author and famous for calling the housing bubble when almost everyone thought he was an extremist and utterly wrong. History has proven he was correct then, and I believe he is correct now. He stated:
“In the meantime, the implications for American investors should be clear. The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he won’t turn off the spigots even if things noticeably improve. In other words, the dollar is screwed.” (Operation Screw)
Daniel Amerman wrote regarding Bernanke, QE3, and the effort to devalue the dollar:
“This building crisis of a strengthening dollar and rising unemployment called for emergency action, and that is exactly what Bernanke is doing. He is effectively calling in a B-52 strike on the US dollar, monetizing for the world to see, and pledging to monetize for as long as it takes – until the US dollar is driven down to a level where American workers can once again be globally competitive.” (Unraveling Why A Fed President Just Suggested Doubling QE3)
Peter Schiff also wrote on Bernanke, QE3, and the necessity for a poor memory in the economics profession:
“Instead he explained how the new stimulus would be focused directly at the housing market through purchases of mortgage backed securities. He made clear that this strategy is intended to spark a surge in home prices that will in turn pull up the broader economy. Such a belief requires a dangerous amnesia to the events of the last decade. Despite the calamity that followed the bursting of our last housing bubble, economists feel this to be a wise strategy, proving that a poor memory is a prerequisite for the profession.” (The Fed Plays All Its Cards)
Legendary oilman T. Boone Pickens famously calls America’s oil imports ‘the greatest transfer of wealth in the history of the world.’
Pickens is referring to the money that is paid each year to oil exporting nations, particularly those in the Persian Gulf which raked in around $100 billion last year.
No doubt, this is an enormous transfer of wealth. But it’s a drop in the bucket compared to the TRILLIONS that Ben Bernanke gives the world’s elite.
Over the past few years, central banks have created trillions of dollars, most of which they loaned to commercial banks at 0%. The commercial banks then loaned this money to their best customers (and governments) at a slightly higher rate.
The end result is that a huge chunk of those trillions ended up in the pockets of asmall handful of people. The banks and their best customers get sweetheart deals to make even more money, while the vast majority of people get screwed with inflation.
For example, the banks here in Singapore loan investment capital to their wealthiest customers at astoundingly low rates, between 0.25% and 1%! And with borrowed funds, they buy cash-producing assets which make even more money– stocks, real estate, and high-yield bonds.
Federal Reserve boss Ben Bernanke told ABC’s Diane Swayer on Tuesday that gas prices will continue to skyrocket through the summer.
Bernanke told Sawyer gas prices “are a major problem” and he admitted they are “a hardship for lots of people.”
During the interview, he tried to pawn off the fallacy that gas prices are responsible for inflation, which he said will escalate over the next few months.
By inflation Bernanke means price increases. As Ron Paul notes, blame for this can be placed at the doorstep of the Federal Reserve.
“Most economists fail to understand that inflation is at its root a monetary phenomenon,” Paul wrote last March. “There may be other factors that contribute to price increases, such as famine, flooding, or global unrest, but those effects are transient. Consistently citing only these factors, while never acknowledging the effects of monetary policy, is a cop-out.”
Watching the financial channels yesterday, I could not tell you how many times the word “recovery” was used. Sure, the stock market is up, but that is compliments of the Federal Reserve. Since the 2008 financial meltdown, we’ve had a money printing extravaganza. There was QE1, QE2, Operation Twist, dollar swaps with Europe and 0% interest rates (on a key rate) through 2014. Of course the stock market is up, it loves free money. Wall Street may have recovered, but Main Street is still in the dumper. (Actually, Wall Street has just broken even since the 57% plunge it took up to March of 2009.) Professional commodities trader Dan Norcini said, this week, on his blog, “. . . the FED IS TERRIFIED OF RISING INTEREST RATES.” Norcini explains, “. . . the US federal debt is at banana republic levels and any, I repeat, any rise in interest rates, will suck more of the incoming federal revenue into servicing the cost of this debt (paying the interest on it), leaving less for the spendthrift class to buy votes with. Bernanke and company cannot afford to have a stock market that stops moving higher because if and when it did, the entire facade of an economy on the mend would come crashing down with it.”
Caroline Salas Gage, of Bloomberg, writes a very misleading article on the Fed, in which she claims that Bernanke’s Fed has somehow proved the critics wrong. “The numbers are proving Federal Reserve Chairman Ben S. Bernanke’s critics wrong.”
This assertion can be easily debunked. It also distracts the reader from the greater vulnerabilities within our fractional reserve banking system. No where in her article does she mention that the “Federal Reserve” is as “Federal” as the “Federal Express”.
This is a classic lame stream media ploy. Distract people with the symptoms, while neglecting the root cause of the problem; I will go on to say more about that in a bit, although I’m sure I am preaching to the choir.
She goes on to discuss the Republican presidential candidates, and their varying degrees of opposition to the Fed and Bernanke. Ron Paul being the most out spoken critic the Fed, and Gingrich and Romney both claiming that they would only remove Bernanke.
“Even though the economy is showing signs of strengthening and inflation appears in check, Republicans Mitt Romney and Newt Gingrich, who also are running for president, have said they wouldn’t keep Bernanke, 58, when his second four-year term as Fed chairman expires on Jan. 31, 2014. Gingrich said in September that Bernanke was “the most inflationary, dangerous and power-centered chairman” in the central bank’s history.”(Caroline Salas Gage)