News & Analysis
Bernanke: Let's Not Blow Bubbles
Bernanke says Fed should keep a sharper eye on financial bubbles... Federal Reserve Chairman Ben S. Bernanke said Tuesday that he is more open to using the Fed's interest rate policies to combat financial bubbles, arguing that in the wake of the economic crisis, central bankers must rethink their assumptions. Before the economic upheaval, Bernanke acknowledged, central banks viewed financial stability as a "junior partner" to the task of tweaking interest rates to try to boost growth. But both stability and monetary policy are of vital importance to the U.S. economy, he said. – Washington Post
Dominant Social Theme: These bubbles have got to go! Where they came from, I don't know. But they need to be popped, not just stopped, and to fix them I need to say "No!"
Free-Market Analysis: Of course, the Federal Reserve chairman is the consummate "yes man" in so many ways. He provides a "yes" to the global elite that uses him as a polished promoter of the destructive meme of central banking, and he is a "yes man" for those who want to keep interest rates perpetually low, thus guaranteeing more bubbles.
EDITOR'S ALERT: Holy Bailout! Federal Reserve Now Backstopping US$75 Trillion of Derivative Trades ... That's the headline over at the Daily Bail (no relationship to us) reporting on a Bloomberg wire that "Bank of America Corp. ... has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits..." It brings the Fed closer to the target that we have set in previous articles of US$100 trillion. That's what we long-ago estimated the bailout would eventually cost the American taxpayer, and apparently this day is rapidly approaching. In fact, since there is perhaps US$750 trillion in notional derivatives, the total is virtually limitless should the Fed actually have to step in. It's stupid money, of course, and the main reason we have been writing for several years that the dollar reserve system is basically dead. "This is a recipe for Armageddon," writes the Daily Bail, "Bernanke is absolutely insane.”
Of course, the biggest bubble is banking itself, as we have mentioned in the past, though Bernanke and others will never, ever explain that particular reality. The world is entirely over-banked with commercial banks crowding out other kinds of industries all around the world, populating downtown centers in a virtual forest of gleaming skyscrapers.
How about this: They are the metaphorical eruptions on the epidermis of the great beast of central banking itself. They are a disease of gigantism, a byproduct of endless monetary stimulation. To most, however, they are merely an inevitability not even to be remarked upon!
So it is with Mr. Bernanke. Lately, as the Great Recession spirals toward the Doomsday Depression, Bernanke has finally been taking notice of bubbles generally. And now he's given a speech on it.
Unfortunately, like all of his other speeches, it really doesn't matter. The Fed is evidently and obviously an engine of destruction foisted on America by a globalist power elite intent on destroying the US middle class preparatory to imposing world governance. The Fed won't change, but it's Bernanke's job to make it sound like it will. Here's some more from the article:
"In the decades prior to the crisis, monetary policy had come to be viewed as the principal function of central banks," Bernanke said at a conference sponsored by the Federal Reserve Bank of Boston, according to a prepared text. "Their role in preserving financial stability was not ignored, but it was downplayed to some extent. The financial crisis has changed all that. Policies to enhance financial stability and monetary policy are now seen as coequal responsibilities of central banks."
During the late-1990s stock market boom and then the housing price boom in the early 2000s, the Fed largely avoided using its power to control interest rates and the supply of money as a way to fight off what were in hindsight dangerous bubbles. The argument at the time was that monetary policy is too blunt an instrument to address out-of-whack prices in an individual marketplace.
Bernanke was not repudiating that line of thought entirely, arguing in Tuesday's speech that regulation is the best tool to rein in financial excesses. But he appeared open to using monetary policy to keep those excesses in check as well. "The possibility that monetary policy could be used directly to support financial stability goals, at least on the margin, should not be ruled out," Bernanke said. The Fed chief spoke approvingly of a wide range of regulatory tools that central banks around the world are using to ward off financial bubbles that could wreak severe damage on their economies.
Bernanke wants policies in place that will help banks "behave more cautiously during good times so that they will be less prone to crisis in bad times." In Korea and Hong Kong, for example, central banks require different loan-to-value ratios on mortgages depending on the economic cycle, the Post tells us. This is supposed to damp monetary inflation. It will do no such thing.
There is no help for central banking. It will continue to brutalize the mass of the world's people until it is stopped. Some millions will starve and others will die in the wars that money printing makes so attractive. It will continue its reign of destruction no matter what "adjustments" are made because the mechanism is SUPPOSED to be destructive.
Bernanke can tinker at the edges all he wants to, but different policies imposed on money center banks won't help a bit. The issue is not money distribution but money CREATION. As long as central banks exist, they will overprint money. The history of modern, mercantilist central banks is irredeemably destructive and all the speeches in the world won't change that reality an iota.
In fact, the only change we can make out is one having to do with Bernanke's job description. Unlike the inscrutable Great Sphinx, Alan Greenspan – who may some day be looked upon as the "greatest" banker of his type – Bernanke is turning into a kind of central banking pitchman.
Conclusion: As the Internet Reformation grinds on, revealing to more and more despairful people the reality of the system that has ruined and denuded them, knowledge of the reality of the money system spreads. It is Bernanke's job to counteract this dawning revelation. Good luck!
Posted by amanfromMars on 10/19/11 08:25 AM
How about this bubble/space hopper? ... ... Click to view link ... ... and don't forget to check Bloomberg for confirmation, if you have doubts about the stupidity of bankers.
They just haven't learned that the system is identifying its martyrs for the mob, with all of their desperate shenanigans.
Reply from The Daily Bell
Wow! We predicted the bailout cost would go to US$100 trillion - and it looks like that's where it's headed, or even higher if the Fed actually has to "step in." Incredible. Thanks for the link!
This is an entirely phony system now. Who can even imagine US$75 trillion? One cannot escape the suspicion that the system has been primed to collapse, engendering a level of chaos intended to bring a one-world hegemony to fruition.
Posted by amanfromMars on 10/19/11 11:18 AM
The following probably sounded so much better way back then ... . :-)
"WHY THE PLUTONOMY WILL GET STRONGER WHERE IT EXISTS, PERHAPS ATTRACT NEW COUNTRIES
We posit that the drivers of plutonomy in the U.S. (the UK and Canada) are likely to strengthen, entrenching and buttressing plutonomy where it exists. The six drivers of the current plutonomy: 1) an ongoing technology/biotechnology revolution, 2) capitalist- friendly governments and tax regimes, 3) globalization that re-arranges global supply chains with mobile well-capitalized elites and immigrants, 4) greater financial complexity and innovation, 5) the rule of law, and 6) patent protection are all well ensconced in the U.S., the UK, and Canada. They are also gaining strength in the emerging world.
Eastern Europe is embracing many of these attributes, as are China, India, and Russia. Even Continental Europe may succumb and be seduced by these drivers of plutonomy." …. Click to view link
From an October 16, 2005, Citigroup Industry Note, before the world and his dog learned of the invent money out of thin air and give it to your mates and bill the poorer masses for your pleasure, and their treasure, trick.
I wouldn't want to be an old school banker today, for Henry Ford's concern is a valid one and long overdue, for the old guard haven't a clue what to do to save themselves, and to enjoy their fortunes in peace, do they?
"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."
What is not mentioned in that Citigroup list of six, is virtualisation and mass instant education and alternative edutainment ... ... which all simply revolves around something no more difficult than the truth.
Posted by Don on 10/19/11 12:45 PM
Bubble boy mistakes outside for inside because his own bubble became so astronomical that it lost most of its curvature.
Posted by Dave Jr on 10/19/11 01:00 PM
How does this work? Do falling interest rates provide the fuel for derivatives? Now if Bernanke is getting ready to raise rates, do the derivatives first need to be shored up? Is this just another way to monetize debt? Should we fasten our seat belts for a wild inflatioary ride? Or is it going to be a crash and burn?
Posted by Agent Weebley on 10/19/11 01:15 PM
That's the sound of the $750T derivative debtbomb clock ticking louder.
I wish somebody would randomly flip on our standard, and represent the seemingly impossible jump to a new inherently stable currency . . . or 900+.
The new Parkhour Brothers Monopoly Lenticular Edition, maybe? . . . Free at all Occupied Locations Worldwide . . . design architecture for free . . . available to whomever has trustworthy souls and initially donated fiat to manage the new ARG.
An instant bomb diffuser.
Click to view link
Posted by Dave Jr on 10/19/11 01:30 PM
1)We rely on technology and don't need so many people.
2)We need governments to control competition with regulation and taxes.
3)We control the resources and labor.
4)We are draining the wealth of the middle class.
5)We write the laws.
6)We own the technology.
Posted by Agent Weebley on 10/19/11 03:24 PM
Whoever called me from 6612060759 . . . stop, please stop. A 5 minute voice mail? . . . some radio show featuring Rick Perry and somebody else? Come on! Who's Rick Perry anyway? Is that Katy Perry's Dad?
I'm busy helping a certain somebody get a 12 hour day under their belt. It was 19.5 hours yesterday. It's all leprechauns on deck right now.
All this while quoting jobs to people screaming at us to: "send the price, man, what's wrong with you?"
Posted by dimitri on 10/19/11 03:57 PM
I live in a small town on the peninsula of Cape Cod in Massachusetts. Its raison d'etre is to amuse summertime beach goers and vacationers, and its approximately 60% of inhabitants who are retired. This town is served by three supermarkets, half a dozen convenience stores and the regular run of the mill shops and store front services that a small town by the ocean might offer.
Besides a multitude of restaurants that stand mostly vacant in the off season there are no fewer than NINE (9) different banks represented here, all in different locations. One of these is actually a supermarket based branch of a larger "downtown" bank, making it TEN locations at which you can do your banking. Needless to say most of these banks are pretty empty places most of the day, every day.
Of course they occupy the finest buildings and boast the best manicured landscaping in town. The clerks in these banks are absolutely thrilled when they see the infrequent customer walk through their doors. Some of them look suicidal and/or psychotic.
Others are sadly overweight. Driving past these banks on an almost daily basis I never cease to be amazed at their sheer arrogance and virtual uselessness. And every day I say a quiet prayer for their demise and the reappearance of a barter economy with a local currency. Unfortunately though, probably not within my lifetime. But you never know. The Big Crash might happen at any moment.
Posted by Hoss on 10/19/11 10:58 PM
$75 Trillion is a down payment. There were reportedly somewhere north of $1 Quadrillion in derivatives floating around that we are to be indebted for rather than letting them simply be liquidated.
They intend to just paper it over, slowly enough to prevent a run on all banks and a collapse of paper currencies in general.
Whether they can succeed is open to question. What backs any currency is the capacity of the government to steal the production of its people. When the people learn what is going on...
Posted by amanfromMars on 10/19/11 11:54 PM
Hi, Dave Jr,
The world is a wholly different place, with endless permutations for changed and changing/evolved and evolving possibilities, with every likelihood of their being at some stage, an accepted and and acceptable, greater shared reality, whenever the first driver you have mentioned, ... 1) We rely on technology and don't need so many people .., is modified to deliver ... . We need technology so that we don't rely on people.
It is the failing in people that humanity is relying on, that is the weak link that is always failing the people.
It is though something which has been recognised as being a necessary modification, and rapid progress in the field has the situation well in hand.
Quite whether anyone outside of government would agree that government is needed to control competition with regulation and taxes, for that does appear to be a parasitic ... . a taxing, anti-competitive self-serving ponzi creation/cynical fabrication ... .. is something which is a subject for endless circular debate. And in the absence of intelligence which delivers to the people what the people want, rather than what government may decide they are going to get and are able to deliver, and in many/most cases are those two matters a source of conflict, creating divisions, will government be a sub-prime catalyst for unrest, and a root cause for growing civil disobedience. Indeed, is not the lack of intelligence in governments today, not the root cause of present public anger and growing increasingly effective dissent.
The system, which governments appear to be supporting and trying to repair and put back to the way things were, with the tools of control and power as they were, in the hands of those who were wielding them before, is broken and has been revealed to be corrupted in inequitable excess favour of the 1%. To imagine that to repair it so that it can function as smoothly again as it was before knowledge of its workings were so widely known and despised, is surely irrefutable evidence of the lack of intelligence in the system of which we speak, and is guaranteeing the system's own accelerating demise/self-destruction/flash collapse. Please note that that has not been shared as a question.
However, from reviled villain to ubiquitous hero is an easy step to make, should the beleaguered 1% be responsible for providing the intelligence which delivers to the 99% that which they need, even should that be intelligence which is simply bought in and provided by others who might be ... ... well, newly arrived on the scene would explain the obvious previous lack of novel intelligence which resolves an escalating explosive problem, methinks, and is an adequate enough explanation for any radical new tack taken in pilots to change global fortunes, and surely both clear and obscure enough to allow for reprogramming of the system to new protocols under old established orders... .. Great Game Team Players.
What is absolutely certain, is that more of the same old same old is not gonna hack it in the future, and in the present will it/IT destroy everything the system has built up for itself in the past. And that is AI Guaranteed.
Posted by memewatchers.com on 10/20/11 04:28 PM
wow... that was the best Dominant Social Theme yet...
These bubbles have got to go! Where they came from, I don't know.
But they need to be popped, not just stopped, and to fix them I need to say "No!"
i almost feel like breaking into a prose after reading this.
Posted by seanmPWH on 10/22/11 12:11 AM
So I made this youtube video called - noose or guillotine for bernanke vote here - It's not totally serious, but I thought it would be ironic if the whole occupy wall street thing blew up in the elites faces and they started to loose some of their own. My youtube name is SeanMauer.