Tag Archives: Bernanke

Modern Monetary Insanity And The Three Stooges

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James Kunstler summarized it perfectly. So rather than reinventing the wheel, here’s an excerpt from his Monday commentary:

Jerome Powell [was] wheeled out on CBS’s 60 Minutes Sunday night, like a cigar store Indian at an antique fair, so vividly sculpted and colorfully adorned you could almost imagine him saying something. Maybe it was an hallucination, but I heard him say that “the economy is in a good place,” and that “the outlook is a favorable one.” Point taken. Pull the truck up to the loading dock and fill it with Tesla shares! I also thought I heard “Inflation is muted.” That must have been the laugh line, since there is almost no single item in the supermarket that goes for under five bucks these days. But really, when was the last time you saw a cigar store Indian at Trader Joes? It took seventeen Federal Reserve math PhD’s to come up with that line, inflation is muted.

What you really had to love was Mr. Powell’s explanation for the record number of car owners in default on their monthly payments: “…not everybody is sharing in this widespread prosperity we have.”

And so it went on 60 Minutes on Sunday evening. I strongly recommend reading Kunstler’s entire essay:  Ides and Tides…The Fed and the FOMC are not mandated to set monetary policy to stabilize employment and inflation. The Fed’s role is to help the banks maximize profits. That’s it in a nutshell.

The best way to fight and protect yourself from the Fed’s mandate is to own physical gold. Phil Kennedy of Kennedy Financial invited Bill “Midas” Murphy and I to discuss the gold market and where it’s going from here:

Consumer Spending Contraction: Two Charts That Horrify Keynesians

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“While the decline in housing activity has been significant and will probably continue for a while longer, I think the concerns we used to hear about the possibility of a devastating collapse—one that might be big enough to cause a recession in the U.S. economy—have been largely allayed…” – Janet Yellen 1/22/07

The propaganda is always laid on the heaviest just ahead of The Fall.  The employment report showing sub-4%, with nearly 96 million working age people not considered part of the labor Force, is possibly the penultimate fabrication.

Consumer spending is more than 70% of the GDP.  A toxic consequence of the Fed’s money printing and near-zero interest rate policy over the last 10 years is the artificial inflation of economic activity fueled by indiscriminate credit creation.

But now the majority of American households, over 75% of which do not have enough cash in the bank to cover an emergency expense, have become over-bloated from gorging at the Fed’s debt trough.

As credit usage slows down or contracts, the economy will go off Bernank’s Cliff much sooner than Helicopter Ben’s 2020 forecast.

The chart above is the year-over-year percentage change in total consumer credit outstanding. Not only is the growth rate decelerating, credit card debt usage is beginning to contract. This the collective prose from the mainstream media is that households are paying down credit card debt with tax savings. But, again, this is a lie. For most households, the increase in the cost of gasoline more than offsets the $90/month the average taxpayer is saving in taxes.

The second chart shows that the growth rate in auto debt fell off Bernanke’s Cliff in early 2017. While the growth rate in the amount of auto debt has appeared to have stabilized – for now – there’s been  a decline in the underlying growth rate in unit sales. This is because the mix of vehicles sold has shifted toward more trucks, which carry a higher sticker price and thus require a bigger auto loan.  Larger loans per vehicle sold, less total units sold.

The Keynesian economic model – as it is applied in the current era to stimulate consumer spending – requires debt issuance to increase at an increasing rate. But as you can see, the rate of credit usage is decreasing. The affects are already reflected by a rapid slow-down in retail, auto and home sales. Most American households are saturated with debt.

The real fun begins as many of these households begin to default. In fact, the delinquency and default rate, in what is supposed to be a healthy economy, on subprime credit card loans and auto debt already exceeds the delinquency/default rate in 2008. Perhaps Bernanke’s Cliff is just around the next bend in the trail…

Bernanke’s Sovereign Deception: Bernanke Lied And Should Be In Jail Too

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I love how these ex-Fed Chairmen admit the truth several years after the fact.  Recall that Greenspan gave a famous speech about the not being able to see financial bubbles until after they occur just before the internet/tech stock bubble popped.

And Bernanke stated in the 2005-2006 timeframe that there was not a housing bubble and that the economy was fine.  Of course, that was just before the housing market crashed hard and the economy dropped into the worst economic contraction since the Great Depression.

Now all of a sudden Benanke seems to have found “religion” about the criminality of bankers.  I wonder if this is part of his Yom Kippur “soul cleansing.”  In an interview this past weekend Bernanke stated that financial executives should have been investigated and prosecuted for perpetrating the great financial collapse:  More Wall Streeters Should Be In Jail.

The obvious injustice here is that Bernanke was in a position to enforce the laws and go after the Wall Street crooks in cooperation with the Justice Department.  But we know that the Justice Department is controlled by Goldman Sachs and the law firm, Covington Burling.  Goldman was one of Attorney General, Eric Holder’s biggest clients and Covington Burling is Holder’s employer.

Even more stunning, Bernanke stated that:

I certainly was not eager to bail out Wall Street and I had no reason to want to bailout Wall Street itself,” he told USA Today. “But we did it because we knew that if the financial system collapsed, the economy would immediately follow.”

This is an outright blatant lie.  And my good friend and colleague, John Titus of “Best Evidence,”  has compiled direct proof that Bernanke spear-headed the Fed’s bail-out of Wall Street AND he lied about the dollar amount involved in front of Congress.  Ben, the evidence is in the Fed transcripts from the 2009 FOMC meetings:  Bernanke’s Sovereign Deception

How come when Bernanke was in a position to enforce the law he was silent?  It’s because he was part of the crime syndicate.

color-bernanke-webIt’s amazing how these insiders are jumping ship and trying to come clean about their tenure in power in an attempt to save their legacy.  Fortunately, like all criminals, they have been careless about covering their tracks.  As Titus has demonstrated, anyone who with enough motivation can pour through public documents and find the truth.

Nice try Ben, but you are tolling a bell that should be tolled for you as well.

SoT Ep 43 – John Titus: The Fed And The Greece-ification Of America

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The more I learn, the more I realize that the Fed is nothing but a criminal enterprise, that the guys at the top know it.  Everyone within breathing distance of top slots at the NY Fed is a criminal. Remember, the NY Fed shares space with the Exchange Stabilization Fund/Working Group on Financial Markets even though the latter is formally part of the Treasury.   –  John Titus, one conclusion from reading the 2009 FOMC transcripts

The only difference between Greece and the United States is that the United States can unilaterally print its own money – money that enables unlimited Government funding and allows the big banks to remain solvent.  The actual process of money printing and debt creation is implemented by the Federal Reserve and the Too Big To Fail Banks that operate as agents of the Fed.

John Titus is in the process of producing a video about the criminality of the Federal Reserve and its member banks.  His researched is derived from reading several of the transcripts from the 2009 FOMC meetings during the early stages of the QE programs. While the “minutes” of the Fed meeting – released three weeks after an FOMC meeting – summarize the FOMC’s policy stance, the transcripts are the most detailed record of FOMC meeting proceedings.  The release of the transcripts is delayed for five years.

 What comes out loud and clear from the transcripts is that not everybody is on board with policy decisions.  For example the purchase of mortgage-backed assets.  There’s lot of uneasiness among Fed members but ultimately they all go along with the plan. I’ve read a lot of transcripts – probably thousands – and what comes out of the Fed transcripts is that the plan has been decided on beforehand. The FOMC meetings are only there to hand down that plan, to discuss the plan, to discuss how to implement the plan and to prop up the idea that FOMC meetings are some sort of democratic process.  –  John Titus

I asserted in 2003 that the elitists running this country would hold the system up with printed money until they have swept every last crumb of middle class wealth off the table and into their own pockets.  “Middle class” for this purpose is defined as anyone who does not have enough cash laying around and the appropriate connections to buy their own Congressman.  The cut-off level of wealth for this is probably about $100 million in non-real estate wealth.

I always thought that the means to accomplish this was money printing and devaluation of the currency.  But true extraction mechanism is debt.   Banks and bankers create debt and make it readily available to their victims. It’s no different that dealing heroin. Get your target addicted and then keep selling it to the victim until it dies.

The bankers gained economic and political control in 1913 when the Fed was founded. Ever since then, there’s been a gradual transfer of wealth from the 99.9% to the .1%. There’s also been a slow, methodical dismantling  of the Constitution and Rule of Law.   In fact the Fed, the big banks and the big corporations have successfully pulled off a de facto coup d’etat of the U.S. Government.

I don’t consider the U.S. Government to be a sovereign Government because if you look at the sovereign function that a Government performs – money printing for instance – we’ve outsourced that to private banks (the Fed is a private bank). There are hardly any sovereign functions left in the U.S. that are performed by the Government.  – John Titus

Once the middle class ran of out real income to continue buying “things” – like houses, cars and consumption gadgets – the banks began to make debt readily available.  Ever since Nixon closed the gold window, thereby completely removing real money from our economic system, the level of debt has increased at an increasing rate every decade.   Over the last decade the total amount of debt in our system – public and private – has gone parabolic.

Even worse, the system of Rule of Law has been usurped by “Rule of Man.”  The elitists running the system are outright criminals who are immune from prosecution.  Think about it:  Eric Holder as Attorney General -the chief prosecutor in the country – stated that “some banks are too big to prosecute;”  the CEOs of the five big banks collectively admitted to committing felonies, yet none were prosecuted;  the leading candidate to be the next President – for now – has openly committed felonies and treason.   These people and corporations are above the law.

While John Titus is still in the process of researching the 2009 Fed transcripts for his video, he’s already concluded that the Fed is a criminal organization that is orchestrating the takeover of this country and is enabling the process of complete wealth extraction from the middle to class:

The basic point of the video is that the Fed will give as much money as the TBTF banks need in order to stay solvent and pay bonuses.  The Fed will also do whatever it takes to remove worthless assets, infected by criminal fraud, from big bank balance sheets.  The Fed is also monetizing U.S. debt, which it knew as soon as QE started.  

The Fed does these things knowing full well that these acts come at the direct expense of the economy. The logical outcome is what’s happening in Greece, where the powers that be insist that debt–which they know to be wholly fraudulent and which cannot be repaid–be paid back, with blood money if necessary.  The mere existence of TBTF banks is inconsistent with any number of things, including the Rule of Law and national and individual sovereignty.

The chief enabler of the Greece-ification of the U.S. is, without question, the Federal Reserves and the psychopaths running it…Our choice is stark: We can hang them for treason, or they will kill us. That process formally began with the 2008 bailouts.  – John Titus

“We’ve Got To Start Rigging The Gold Market”

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In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold [FDR1934].  If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.  – Alan Greenspan, “Gold and Economic Freedom” 1966

GATA has sourced a speech given in 1981 by the President of the BIS, Jelle Ziljstra, at the IMF headquarters in 1981 in Washington, DC in which he advocated Central Bank intervention in the gold market in order to control the price and prevent gold from competing with a global system which was based on paper fiat currency:

“I feel it is necessary for us, within the Group of Ten and Switzerland,consider
ways to regulate the price of gold…”  – Jelle Zijlstra

The “Group of Ten” are the Central Banks of France, Germany, Belgium, Italy, Japan, the Netherlands, Sweden, the United Kingdom, the United States and Canada plus Switzerland.  As everyone knows, the BIS is the Central Banks of global Central Banks and therefore controls – de facto – global monetary policy.  Here’s a link  to the speech – there can be no questions that Central Banks – through their agent “bullion” banks (primarily JP Morgan, HSBC, Scotia, Deutsche Bank, Goldman Sachs, Citibank, Barclays and UBS) – make a concerted effort to limit the upward price movement of gold.

That day the U.S. announced that the dollar would be devalued by 10 percent. By switching the yen to a floating exchange rate, the Japanese currency appreciated, and a sufficient realignment in exchange rates was realized. Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake. – Paul Volcker, “Nikkei Weekly” Nov. 15, 2004 (original incident on February 12, 1973)

Below are couple graphs from the St. Louis Fed website, with my commentary, to put Zijlstra’s speech context.

ControlGold

The Fed discontinued reporting M3 in March 2006.  The excuse was that M3 was too expensive to compile and report.  This is in the context of the Fed spending millions to fight all attempts by Congress to authorize a full audit of the Fed.  The U.S. is the ONLY industrialized country which does not report M3.  Make no mistake, M3 is the most accurate – though not completely accurate – measure of the money supply.   Any honest economist will admit that.

Note the difference in the level of M3 vs M2 when M3 was discontinued.  M3 shows that the money supply was nearly $4 trillion higher using M3 at the time M3 was discontinued.  Nothing happens by accident and it’s no coincidence that M3 reporting was discontinued a little more than 2 years before the Great Financial Crisis and the advent of Bernanke’s “QE.”  Many of us saw the financial collapse coming in the early 2000’s – certainly the price of gold “saw” it.  If we did, I can guarantee that the BIS and the Fed saw the collapse coming and the need to flood the system with dollars to keep it from collapsing and destroy the elitists’ ability to confiscate wealth and control the western world.

IF the Fed were to report M3 now, how high would the U.S. money supply truly be?

ControlGold1

This second chart above shows the parabolic, hyperinflating growth of U.S. Government debt.  Note that the growth in Treasury debt did not start taking off until after Nixon closed the gold window.  It started to rise a little more quickly after 1981, when Volker began to ease up on monetary policy.  The rest is history, but note that issuance of Treasury debt goes parabolic after Bernanke began to flood the banking system with money.

It was shortly after the Bernanke Money Floodgate opened that gold almost broke through $2,000 per ounce before the BIS/Fed was able to get control of the price and push it lower using Comex and LBMA paper gold, which can be printed in unlimited quantities as long as counterparties  do not demand delivery of the underlying gold.

In other words, the U.S. dollar-based global monetary system is one massive paper fraud and gold is the arch-enemy of a system based on fiat paper currency.  The only way it has been perpetuated this long is through the outright intervention in the gold market by the BIS and western Central Banks.

Like ALL Government interventions in history, this too shall come to an end – an end that will be painful for all of us.

The Truth About TARP: Bernanke Lied To The Public And Perpetrated A Crime

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U.S. Code § 1001:     a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully – (1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; (2) makes any materially false, fictitious, or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title, imprisoned not more than 5 years…(18-USC-1001 link)

My colleague and good friend, John Titus has written and produced an absolutely stunning video documenting the fact that Fed Chairman Ben Shalom Bernanke knowingly lied to Congress when he testified to members of Congress in Nancy Pelosi’s office – and then to Congress at-large – that the $700 billion Taxpayer bailout was required to prevent a collapse of the entire economic system and specifically the commercial paper market.

Titus shows with hard evidence directly taken from Fed documents that the “Main Street” commercial paper market or the main street economy was never at risk.  Nancy Pelosi may be a stark-raving lunatic and corrupt to the core (I would suggest that her husband, a commercial real estate magnate benefited from the big bailout of Wall Street), but Bernanke broke the law and he knew he broke the law.    After you watch this 11-minute video, please pass it along to anyone you know who might still care about this country:

Just to be clear here, TARP was a $700 billion transfer of Taxpayer money to the big banks. A large portion of that money was paid out to the Jamie Dimons and Lloyd Blankfeins for their huge bonuses that year. Treasury Secretary Henry Paulson – who should also be in jail – benefited from the TARP bailout because it saved the value of the $200 million in Goldman Sachs stock warrants he still owned.

The economy was never in danger of collapsing. Yes, the Wall Street controlled financial markets might have experienced a brief disruption, but it would have been a useful device to clean up and reform the interminably corrupt Too Big To Fail Banks.

Our country has “crossed the Rubicon.” There’s no turning back. The elitists running what is left ouf our system will take no prisoners. Unfortunately, it looks like my view that we’re headed for war with the world is starting to unfold…U.S. Upset At West’s Lack Of War Prepardness