Tag: Federal Reserve

Damned If I Know!

For the last couple of days I have been studying Fed chief Bernanke’s latest press conference……and have come to the conclusion that he has NO idea what to do next to save the economy…..and the title says it all!

Michael Snyder has made an excellent point……

Is the U.S. economy improving?  That is what Federal Reserve Chairman Ben Bernanke would have us believe.  Bernanke declared today that the “recovery appears to be proceeding at a moderate pace” and that everything is going pretty much as planned.  Sadly, the mainstream media and most of the American people still seem to have faith in the economic pronouncements of Helicopter Ben.  They seem to have forgotten all of the Bernanke quotes from before the financial crisis.  Bernanke pledged that there would not be a housing crash and that there would not be a recession.  It is amazing that anyone still believes that Bernanke has any credibility left.

Bernanke for once was pretty honest with his analysis……(okay, that is sarcasm)

Brutally honest, Bernanke admitted that he had no clue what was actually causing the current fragility in the U.S. economic recovery. While the FOMC statement assigned blame outside of the U.S., pointing at Japan along with rising food and oil prices, Bernanke was put on the spot by a reporter who noted the inconsistency behind that explanation and a lowering of long term forecasts. Bernanke took the hit, admitting only some of the factors were temporary and that he didn’t know exactly what was causing the slowdown, but that it would persist. “Growth,” said Bernanke, “will return into 2012.”

Come on!  Bernanke knows damn well what is causing the lag in the economy……his policies as well as the spending frenzy that politicians have been on for 20 years has everything to do with the condition of the US economy……..there is only one thing that we should recognize……

Sadly, this is about the best that our economy is going to get.

What we are experiencing right now is “the recovery”.  As we move forward things are going to get progressively worse.

A lot of people don’t like to hear that we are in the middle of a long-term economic decline, but that is the truth.

The era of tremendous economic prosperity for America is coming to an end.

An economic nightmare is coming.

You better get ready.  (thanx to Michael Snyder)

Everybody Has A Plan

Daily we hear of the plans for the correcting of the economic problems we have here in the US….there are tax cuts…..there stims….there are infrastructure….there are …..on and on……everybody has a plan….Repubs, Dems, Greens, Libertarians, etc etc….and now the Fed chief has a plan for deficit reduction….

Bernanke speaks and his plan is…….

“Clear metrics are important, together with triggers or other mechanisms to establish the credibility of the plan. For example, policymakers could commit to enacting in the near term a clear and specific plan for stabilizing the ratio of debt to GDP within the next few years and then subsequently setting that ratio on a downward path. Indeed, such a trajectory for the ratio of debt to GDP is comparable to the one proposed by the National Commission on Fiscal Responsibility and Reform.To make the framework more explicit, the President and congressional leadership could agree on a definite timetable for reaching decisions about both shorter-term budget adjustments and longer-term changes. Fiscal policymakers could look now to find substantial savings in the 10-year budget window, enforced by well-designed budget rules, while simultaneously undertaking additional reforms to address the long-term sustainability of entitlement programs. Such a framework could include a commitment to make a down payment on fiscal consolidation by enacting legislation to reduce the structural deficit over the next several years.”

Spoken like a true intellectual……..all that geek speak means…..the debt ceiling should be raised…..a bi-partisan approach to spending and a long term plan…period.

Three Cheers For The Recovery

From the VOMITORIUM

Who will be claiming responsibility for the slowdown in the economy, slowed to 1.8%, below the expectations of all the economic wiz kids in Washington….but it is still growth, just at a slower pace….we will hear the experts say on the tube….look, the will say, inflation is down or holding steady……good one….that is because they do NOT figure in gas prices of food….if you throw that in then our inflation is about to run wild….every quarter we hear how well the economy is doing….then explain to the millions at are unemployed…..we hear that the markets are doing well,  so good that we have not seen growth like that since 2008….then explain it to the people who have lost their homes in the last month…..go ahead I will pause here for your explanation………(waiting…..waiting……)

Wait!  They have an answer!

The first-quarter increase reflected growth in personal consumption expenditures, private inventory investment, exports and nonresidential fixed investment. Federal, state and local government spending fell. Imports, which negatively affect the calculation of GDP, increased.

See told you there was good news (sarcasm, in case you missed it)……

But there are few questions that need to be asked of Bernanke or Geithner or whatever Wall St. insider is at the helm of our economy…… American labor has issued a couple of questions they would like to be answered….and I think they have some excellent questions….

1. Where are the jobs and why are the implications of the Fed’s actions so far not leading to sufficient job creation?2. How is the Fed going to respond to continuing weak economic growth?

3. How is the Fed taking into account in its decisions the powerful headwinds facing the economy, including falling housing prices, rising energy prices and large-scale layoffs and wage freezes for public employees?

4. How will the Fed’s policies address the inadequate public investment in the United States?

5. What is the Fed’s plan for closing the gap between economic growth and job creation? Between productivity growth and wage stagnation?

6. Can we have a healthy economy until we deal with rising inequality?

7. Is there anything the Fed can do to revive our economy if government at every level persists in irresponsible, job-destroying budget cuts at a time of economic weakness?

We will know just how f*cked we are…these questions will Not be asked by anyone in the media….and there will be NO answered offered up by the government….so we will continue to be subjects of the elaborate con job that is economic recovery……

And the disconnect does not stop there…..a recent poll shows that majority of the people feel that the economy is going badly…..the disconnect is that the media reports on macro-economics and Main street lives with micro-economics….and Main Street could give 2 shakes in Hell about the debt…..their personal debt concerns them…food prices concerns them…..being unemployed concerns them…..macro-economics concerns them not…they do not care that Samuelson basically invented the study of the macro field…they do not care…their only concern is their family and their livelihood……

One Trick Pony

Daily Agitator

American capitalism can be called a “one trick pony”……I know I am one of those hidden “Marxists” that Glenn Beck is so afraid of in his continuous rants and raves……please……I can talk about the failures of capitalism without being a Marxist or a Communist or a Socialist….and if you are afraid to talk about the shortcomings of capitalism, then stop reading here and turn your attention to either Limbaugh or Beck….I am sure they are on the air someplace in the country…..

The long-time descent into totalitarian capitalism and neglect for anything but corporate profit has just about finished its course. The party is over. Bankruptcy is next. What we don’t know yet is how far-reaching this economic freefall is going to be.

We the people are not supposed to be aware of how we are being treated like dregs to be discarded. The powers that be imagine that, as long as we are not told the truth about how we are being cheated out of our birth rights, we will lie down like whipped dogs and lick the feet of our torturers.

How far we have come from the somewhat civilized society that the Founding Fathers had in mind for the people of the thirteen states can only be measured if we consider the abysmal lack of basic needs and basic rights that is now the norm in the United States. In fact, there are no areas left in the year 2010 that have been spared from the general decline, cultural, economic or humane. Human rights are in tatters, the standard of living for the vast majority of American families can go nowhere but further downhill, the voices of the people are left unheard, the standard of cultural institutions, quality education and all the privileges that are linked to it are being starved out of existence.

Capitalism, the way it is playing out today, is incompatible with true democracy. This insanity, this absurd form of capitalism is altogether negating a humane system of running the world with any consideration at all for the people on the planet.
Free-market capitalism can not possibly go along with true democracy. The concepts represent opposite poles in the running of the economic systems of the world. The most outstanding mark of run-away capitalism is its denial of any civic and human rights to the working people. Privatization, which is the principal gospel of this decadent world order will eventually make us pay for the air we breathe and the polluted water we drink.

From Siv O’Neall…….

The Free Market was set up with unilateral power for the giant in the West and unheard of wealth for the very few as its unique goal. The tools would be the International Monetary Fund (IMF) and the World Bank, which were working on the single track of stealing the national resources of the greatest number of countries possible and squeezing money out of financially strapped nations by lending their governments money at a high interest rate. The ultimate condition for the nations in dire economic straits, was always the cutting back on social services, devaluing the national currency and increasing taxes on the already half-strangled people, thus starving the beast. Such is the ever-present major strategy of these Washington henchmen; the super-tools for U.S. world domination. And, of course, along came the accumulation of further wealth to add to the already astronomic wealth of the corporations.

Free Market capitalism, the Chicago School of Economics professor, Milton Friedman’s brain child,  globalization, the catchword for the Empire’s total domination over the rest of the world, Washington’s New World Order, enriching the very few and strangling the masses – call it what you like but it’s a fantasy that is now finally crumbling. It all amounts to ‘screw the people’ and ‘greed is the power that makes the world go round’. The religion in the U.S.A. is greed and it’s the only true religion there is.

With all that said, there is Bernanke, chairman of the Fed, is doing the same things that caused the original bubble back a couple of years ago…..Greenspan has been condemned for causing the economic meltdown by keeping interest rates low and now Bernanke is doing the exact same thing and in doing so….he is re-creating the bubble that almost brought the end of the US economy…..low interests are suppose to make cash more readily available for investments in the economy….the problem is….so far there is NO investment only accumulation…..no jobs creation….no investment…..no recovery……

American capitalism is a One Trick Pony and that pony is diseased without new economic medication…It Will DIE!

BTW….GOP…..where are the jobs?

Are Banks The Anti-Christ?

The Anti-Christ?  an interesting word…..people have being seeing this boogey man since the term was first used….people, places and things have been accused of being this problem….so I thought I would join in the fun…..

If you listen to the news or read a newspaper or site, then you are well aware of what is being said about the banks….stuff like……and we can throw the Fed in there also…….

  • It concentrated the nation’s financial strength in a single institution.
  • It exposed the government to control by foreign interests.
  • It served mainly to make the rich richer.
  • It exercised too much control over members of Congress.
  • It favored northeastern states over southern and western states.
  • Banks are controlled by a few select families.
  • Banks have a long history of instigating wars between nations, forcing them to borrow funding to pay for them.

You have heard all the accusations…..and the way they are behaving they seem to be true….but look at the list again….see anything unusual?

No?  Those accusations are not something made up a couple of weeks or months ago….but rather back in the 1830’s or so….those were the arguments that Andrew Jackson made as a justification to why he vetoed the charter of the national bank……

Interesting, huh?

Seems that after about a 170 years not much has changed when it comes to banks…they were screwing the American people then and they are screwing us NOW!

Of course they are NOT the anti-Christ….but if one looks for a villain in the current economic crisis…..the look no further than the big banks….and what they have gained from taxpayers money……

When will we ever learn?

The Shark Is Circling

Oh…that should be the “mama grizzly” is circling….I am talking about our chief protagonist in this conserv political drama….one Sarah Palin….her endorsements in the mid-terms did not fare as well as she had hope and now she has found another thing to moan about….the Constitution is no longer that important….now it is the Federal Reserve and Bernanke…..she spouts:

In Palin’s prepared remarks obtained by The National Review, the former vice presidential candidate said the policy “deeply concern[s] her.”

“If it doesn’t work, what do we do then? Print even more money?” Palin will say.

“What’s the end game here? Where will all this money printing on an unprecedented scale take us? Do we have any guarantees that QE2 won’t be followed by QE3, 4, and 5, until eventually – inevitably – no one will want to buy our debt anymore? What happens if the Fed becomes not just the buyer of last resort, but the buyer of only resort?”

She is a Repub and she will most likely try her toes in the presidential waters come next year….and since she is a Repub there is something that she should be aware of…..

When Bernanke was running for re-confirmation of his post at the Fed…the Repubs could have changed all that……

If you dissect the vote, you find something very interesting: had the Republicans chosen to do so, they could have killed the nomination. The numbers come out 48 Democrat ayes, 22 Republican ayes, 12 Democrat nays, 18 Republican nays. Democrats alone did not constitute a majority of ayes. Thus, if those 22 Republicans had voted nay instead of aye, we’d be looking for a new Fed chair right now.

So maybe instead of chastising the Dems and Bernanke….she should scold her GOP colleagues for they could have prevented this situation altogether if they had shown some balls and voted against Bernanke…….she may be trying to show that there is more to her than a few tag lines that she uses over and over….but this is NOT the place to start your education in the American economic sphere……Sarah, honey…baby steps then move up to the more complicated stuff……

But for once, I agree with her about Bernanke and the Fed…..(pause here to check if Hell is Freezing)

The Virtuous Cycle

What the Fed has done by promising to buy up $600 billion in US bonds, besides also promising to print more money, is what is called the virtuous cycle in economics…..

The most acceptable definition is……..One good thing leads to another. That is, a situation in which improvement in one element of a chain of circumstances leads to improvement in another element, which then leads to further improvement in the original element, and so on.

Now the Fed is praying like a maniac that this infusion of money will start some sort of spending by industry……which will create improvements in the economic condition of the country……

My problem with this whole thing is that this will not create an opportunity just as NOTHING the Fed has done to this point has created anything but more profits for companies and more unemployment for the people…….also we will be spending money we do not have on the wish and the prayer….with all the talk about the national debt and yet this will be allowed to go on is proof positive of the real function of the Fed is NOT the good of the working class or the middle class, if you will….but rather the interests of the Banksters that continue to steal our money with the permission of the government….all the government…both sides of the political spectrum……

Think I am wrong?  Then where have you heard any opposition to this outrageous plan?  Have the Repubs bitched about the add on to the debt?  Not a peep so far!  Have the Dems bitched that this will NOT help the average worker?  Not a peep!  And I bet you still think that there is not a veiled class war (an upcoming post)  going on as we speak…..right?

Fed Throws A ‘Hail Mary’

Yesterday the markets just exploded and ALL the pundits are so confident that this is the beginning of an explosion on Main Street, that prosperity is returning….but is it?

The rally was touched off late Wednesday by the announcement by the Federal Reserve Board that it would pump another $600 billion into the financial markets over the next eight months through the purchase of Treasury bonds. It was further fueled by signals from the White House that the Obama administration is about to capitulate to Republican demands for an extension of Bush-era tax cuts for the rich.

A headline on CNNMoney’s web site summed up the Fed’s action as a “$600 billion gift” to Wall Street. The US central bank is ensuring that corporations and banks have easy access to low-cost funds, even while working people and small businesses find credit unaffordably expensive, if available at all.

So this is basically a ‘hail Mary’ pass…..the Fed has little options left in its bag of tricks to stop a downward spiral of the economy….this action helps NO one but those thieves on Wall Street that have had nothing but good fortune during this economic crisis….the government has done everything it possibly could to keep these firms above water……none of this will increase demand….it does however make the liquidity of the firms involved more stable….but I do not see why this would do anything to help the economy recover…

How will this help anyone with their problems with jobs, housing or whatever else afflicts the common person?

Stop The Presses!

College of Political Knowledge

Federal Budget Deficit Series

In a speech somewhere West of the Mississippi, Federal Reserve Chairman, Ben Bernanke, it was aimed at the Wall Street bunch, trying to calm the markets after a couple of dismal days and in this speech he gave them the laxative, oh sorry, sedative they needed……

Bernanke downplayed concerns that the economy might slip back into recession, predicting a modest expansion in the second half of this year, with the pace picking up in 2011.

If that forecast proves overly optimistic, however, he said the Fed has sufficient ammunition left and could support growth by purchasing more government debt or by promising to keep rates exceptionally low for a longer period than currently priced in by financial markets.

In other words, he said that if things went badly he would turn on the printing presses….that is right!  He basically, said that he would print enough money to keep everything on track.  After that I expected the Repubs to re-start their bitching about the debt and the deficit and the deficit and the debt….but so far….NOTHING!  Why is that?

Is it fiscal responsible to print more money at this time in the country’s economic life?  I wait for the Repubs to jump on this and try to use it for political advantage…after all it is the election season and all things are legal in the game…..

I pray they do NOT use this as an election ad….why?  Very simple……

When Bernanke was confirmed as head of the Fed…the Repubs could have saved the country from Bernanke…how?

If you dissect the vote, you find something very interesting: had the Republicans chosen to do so, they could have killed the nomination. The numbers come out 48 Democrat ayes, 22 Republican ayes, 12 Democrat nays, 18 Republican nays. Democrats alone did not constitute a majority of ayes. Thus, if those 22 Republicans had voted nay instead of aye, we’d be looking for a new Fed chair right now.

I beg the Repubs NOT to use Bernanke as some sort of political weapon against the Dems….they are as much to fault for the actions of the Fed as anyone….be wise…keep your mouth shut……

Should He Stay Or Should He Go #2

My avid readers will already know that I think the secretary of the treasury, Geithner, needs to go….he has not done anything but help those that have caused the meltdown….time for him to depart…..

This post is about Bernanke, the head of the Federal Reserve, personally I think he should do us all a favor and resign….yes I have my reasons…….

In my opinion…he was dumb to the fact that a economic tsunami was approaching back in 2008….he kept telling us all that the economy was fundamentally sound….he was caught with his pants down….he has done fairly well since the crash…but my confidence is not ther any longer…

The faculty of Univ, of MO-KC have an excellent post:

When first nominated as chairman of the Federal Reserve, Mr. Bernanke promised a greater degree of transparency than his predecessor, but has completely stonewalled anybody seeking to obtain clarification of the events surrounding the credit crisis and more specifically, the role of the Federal Reserve. Any information disclosed would have facilitated a proper assessment of Bernanke’s job performance (which is probably one of the reasons the Fed chairman doesn’t want it released) and, more importantly, would have created a foundation for useful forensic work to prevent recurrences going forward.

The Fed chairman claims unique expertise on the grounds of his scholarship of the Great Depression. Few have actually challenged him on the basis of these academic credentials, yet Bernanke holds these out as if they are manifest proof of his appropriateness for the position as head of the Federal Reserve. Ironically, even though Bernanke drew heavily on the work of both Milton Friedman and Anna Schwartz for his own scholarship of the period, Ms Schwartz herself has been enormously critical of the Fed’s conduct both pre-crisis and in seeing providing liquidity as the primary solution. She also warned explicitly against drawing comparisons between the gold standard era Depression and now. Additionally, Bernanke’s reading of the Depression (which is pretty conventional, that the Fed blew it by not providing more liquidity) ascribed little significance to fiscal policy, which has led Bernanke toward wrongheaded “solutions” such as “quantitative easing” and an alphabet soup of lending facilities, none of which did anything to enhance aggregate demand. Consistent with that, the Fed chairman been on the wrong side of fiscal policy, urging the Congress to balance the budget, at least longer term, which suggests that he learned nothing of the fiscal successes of the New Deal.

Bernanke’s consistent advocacy of “quantitative easing” perpetuates the silly notion that the Fed has had something to do with the economic “recovery” (a line which Time Magazine had readily embraced in its selection of the Fed Chairman as “Person of the Year”). He has ascribed little importance to the existence of the automatic stabilizers and indeed has persistently fed the misguided notion that the Federal government had limited fiscal resources.

The Fed chairman continues to demonstrate a tremendous conceptual confusion at the heart of the current crisis, particularly in regard to the banking sector. He actively supported TARP on the grounds that repairing the banks balance sheets would somehow “unblock” credit flows and thereby enhance economic activity. The whole notion of repairing bank balance sheet is a lie and misdirection. The balance sheets we should want to see repaired are household balance sheets. Banks have failed us profoundly. We want them reorganized, not repaired. This will never happen as long as this apologist for Wall Street remains head of the Fed. A world in which the banks are all fixed but households are still broken is worse than what we have right now. Too-big-to-fail banks restored to health are too-big-to-fail banks restored to power. The idea that fixing legacy banks is prerequisite to fixing the broad economy is a lie perpetrated by, amongst others, the Federal Reserve Chairman.

The critique above is about the best analysis I have seen on the performance of Bernanke…..and I agree….it is thime for him to GO!

Unfortunately, he will be reconfirmed…why?….Wall Street wants him there….he is their best friend for now…….and we ALL know how much influence Wall Street has bought over the years….so yes, Irene, he will return as the head of the Fed…….and the people wait!