Category Archives: Ben Bernanke

09.14.13
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Silver Bear Cafe: The Truth of the Federal Reserve System – The biggest financial crime in the history of the United States

In this short article I will discuss the basic mechanics of the biggest financial crime        in the history of the United States and some elements of how this crime, conducted by the        Federal Reserve System, is cheating all Americans every day out of the wages which they        receive for their labor. A future article will discuss how the savings which Americans are        putting aside for their future are being slowly and steadily stolen by this same group.        But there is first a even more important question to ask : While you have recently seen        the media discuss the financial scandal regarding the Enron corporation why haven’t you        heard one word about what I am about to discuss which in size makes Enron look like a ant        compared to Mount Everest?

From the beginnings of our nation there was a great debate and battle over many years        regarding a basic question of how the nation will function : Who shall issue the money of        the nation? The answer to the question of who shall issue ( make ) the money of the nation        boiled down to 2 possibilities –

  1. The government shall use the sovereign powers granted to it via the Constitution to          issue money.
  2. A private corporation, established via legislation, shall take over the function of          issuing money.

While a fuller understanding of the history of the battles over this issue can be found        at the various forums and websites to which we will refer you to for greater information        the quickest summation of the answer to the problem is that :

  1. Government issue of money is constitutionally, monetarily, and financially the soundest          policy for the prosperity of the nation.
  2. The issuance of the money of the nation by a private corporation leads to the draining          of the resources of the nation to the private corporation which controls the issuance of          money.

The summated result of this action is that the private corporation, unaccountable to        the people of the nation, controls the nation as it controls the flow of money within the        nation. As part of a mountain of evidence that the private corporation controls the nation        I refer you now to the following website : http://www.algaoaktree.com/MoneyMenu.htm

You will be taken to a website which has the best explanation of the money situation  that I know of and it is here where you will learn of the total corruption of the Federal  Reserve System, the private corporation which currently controls the issuance of money  within our nation.

Please take your time and read the many extremely well written articles at this site        completely. After reading the articles on this site you may ask one of the questions which        I did upon learning the truth of our monetary system : Even though the subject of money is        a somewhat technical one, why isn’t the information found on this site more well known to        the citizens of our nation?

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Click below for the full article.

http://www.silverbearcafe.com/private/09.13/criminalfed.html

08.25.13
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Reason.com: Delete the Fed

Who should run the Federal Reserve System when chairman Ben Bernanke’s term expires next year: Vice Chair Janet Yellen or former Obama adviser Lawrence Summers?

Neither.

Who then?

No one.

The fact is, we need the Federal Reserve like we need a hole in the head. Contrary to folklore, the Fed is not needed to stabilize the economy or to prevent unemployment. As the Fed heads into its second century, we ought to realize that its record is terrible. Even if we don’t count the interwar period (which some economists call the new Fed’s practice round), America’s central bank is a flop. Monetary economists George A. Selgin, William D. Lastrapes, and Lawrence H. White wrote in “Has the Fed Been a Failure?”:

Drawing on a wide range of recent empirical research, we find the following: (1) The Fed’s full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed’s establishment. (2) While the Fed’s performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I.

The authors support that generalization with details. On inflation: “Far from achieving long-run price stability, [the Fed] has allowed the purchasing power of the U.S. dollar, which was hardly different on the eve of the Fed‘s creation from what it had been at the time of the dollar’s establishment as the official U.S. monetary unit, to fall dramatically” — by 95 percent.

Selgin, Lastrapes, and White also show that the central bank has given us longer recessions and slower recoveries.

But without the Fed, who would set interest rates to guide the economy? The first answer is that government policy and Fed manipulations can create the very recessions that the Fed then tries to reverse. If the politicians and their court economists would get over their hubristic belief that they are stewards of the economy, macroeconomic crises would disappear.

Besides, the Fed cannot set interest rates, not even its narrow federal-funds rate for overnight interbank loans. At most, it targets that rate by buying and selling government securities, but it doesn’t always hit its target. The idea that the Fed can even heavily influence mortgage and other interest rates ignores important facts.

First, the Fed’s operations are small compared to the complex U.S. and world economies. Writes monetary economist Richard Timberlake,

Traditional economics properly teaches that many complex market forces — countless investment and savings decisions not dependent on monetary factors — are essential in determining interest rates. The Fed funds rate that Fed policy can influence through its monopoly over the quantity of money is inconsequential in shaping most short-term and long-term rates in capital markets, unless that moneymaking power subsequently promotes a pervasive price inflation. [Emphasis added.]

Second, the Fed can’t lower rates through monetary inflation beyond the very short run. Why not? Because lenders will respond by raising their rates to avoid being screwed by price inflation –unless the Fed prevents the inflation, as it’s been doing, by effectively borrowing back the new money from the banks at interest.

Moreover, as monetary economist Jeffrey Rogers Hummel points out,

Globalization, with the corresponding relaxation of exchange controls in all major countries, allows [investors] easily to flee to foreign currencies, with the result that changes in central-bank policy are almost immediately priced by exchange rates and interest rates. Add to this the ability to purchase from many governments securities that are indexed to inflation, and it becomes highly unlikely investors will be caught off guard by anything less than sudden, catastrophic hyperinflation (defined as more than 50% per month) — and maybe even not then.

While inflation is not the threat it once was, the Fed is not harmless. “Bernanke has so expanded the Fed’s discretionary actions beyond merely controlling the money stock that it has become a gigantic, financial central planner,” Hummel writes.

No one should have such power.

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Click below for the full article.

http://reason.com/archives/2013/08/25/delete-the-fed

 

08.04.13
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Forbes: Bernanke Tells Congress: I Don’t Really Understand Gold

While Ron Paul is no longer part of  the Congressional committees that grill Ben Bernanke twice a year, the Fed Chairman was forced to answer questions about gold on Thursday again.  Asked about the falling price of gold, which is down nearly 25% this year, Bernanke admitted he doesn’t understand the yellow metal.

“No one really understands gold prices,” Bernanke told the Senate Banking Committee, adding he doesn’t get it either.

Gold prices, which have been under intense pressure since at least last September, were actually up on the day, gaining 0.5% to $1,284.20 an ounce by 12:47 PM in New York.

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Click below for the full article.

http://www.forbes.com/sites/afontevecchia/2013/07/18/bernanke-tells-congress-i-dont-understand-gold/

07.25.13
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Motley Fool: Bernanke’s QE Magic Trick

In May of this year, Federal Reserve Chairman Ben Bernanke suggested to a congressional panel that the Fed could taper its policy of Quantitative Easing (QE). The obvious happened — the stock market took a quick hit, and interest rates spiked.

So Bernanke pulled a quick change, saying the Federal Reserve will continue an open-ended policy of QE, which artificially suppresses interest rates but immeasurably helps the housing, bond and stock markets. This was a calculated act to test the reaction of the markets.Their negative response validated what Bernanke already knew to be true, that the Fed is trapped in its magic policy of Quantitative Easing, and it’s going to be much harder to make it disappear than anticipated.

Bernanke will be exiting the Federal Reserve stage at the end of his term in January 2014, and returning to academia. I imagine he is glad to do so, leaving the possible tapering of QE to his successor. And, with only months left in his tenure as chairman of the Fed, it’s understandable that he would not want to show his hand and risk rocking the stock market.

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Click below for the full article.

http://beta.fool.com/oglove/2013/07/25/bernankes-qe-magic-trick/41523/?source=eogyholnk0000001

07.17.13
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Marketwatch: Bernanke says tapering not on ‘pre-set’ course

The Federal Reserve’s proposed timetable for tapering its bond-buying program is not set in stone, said Federal Reserve Chairman Ben Bernanke on Wednesday. “I emphasize that, because our asset purchases depend on economic and financial developments, they are by no means on a preset course,” Bernanke said in remarks prepared for delivery to the House Financial Services Committee. Bernanke repeated his guidance from mid-June that the Fed anticipates it will be appropriate to begin to moderate the pace of purchases “later this year,” and end them “around midyear.” The Fed chairman said the central bank would react to developments. If economic conditions were to improve faster that expected, the pace of asset purchases could be reduced “somewhat more quickly.” But if the outlook were to become relatively less favorable, or if financial conditions were seen as too tight, “the current pace of purchases  could be maintained for longer,” Bernanke said. The chairman’s prepared remarks were fairly dovish. He said the economy remained vulnerable to shocks and there was a risk that a dispute in Congress over the debt ceiling could hamper the recovery.

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Click below for the full article.

http://www.marketwatch.com/story/berrnanke-says-tapering-not-on-pre-set-course-2013-07-17?siteid=yhoof2

05.06.13
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Business 2 Community: U.S. Dollar to Become the Next Yen?

In its latest meeting minutes, the Federal Reserve said it will continue with quantitative easing, creating $85.0 billion in new money monthly, in order to bring economic growth to the U.S. economy. (Source: Federal Reserve, May 1, 2013.)

The Federal Reserve, once again, didn’t provide any clear indication as to when it will end the quantitative easing; rather, the central bank stated it will continue to do the same “until the outlook for the labor market has improved substantially in context of price stability.” (Source: Ibid.)

The Federal Reserve has already increased its balance sheet to over $3.0 trillion, and if it continues its quantitative easing at this pace, its balance sheet will balloon even more, possibly even reaching $4.0 trillion—or even $5.0 trillion—in a very short period of time.

This is troublesome news, dear reader. The more money created out of thin air via quantitative easing, the more the fundamentals of the reserve currency, the U.S. dollar, deteriorate.

As I have mentioned in these pages before, we only need to look at the Japanese economy to see quantitative easing is not a viable option for us.

The Japanese currency has plummeted since the Bank of Japan revved up its quantitative easing. Just look at the chart below of the Japanese yen compared to other major currencies in the global economy; it seems as if the currency has fallen off a cliff. If we keep up with all this money printing, the U.S. dollar may eventually look the same!

U.S. Dollar to Become the Next Yen? image xjy japanese yen philadelphia index1

Chart courtesy of www.StockCharts.com

A falling U.S. dollar will drag down the buying power of Americans even further, as they are already struggling to keep up with their expenses. What we could purchase for $1.00 in the year 2000 now costs us $1.35. (Source: Bureau of Labor Statistics, last accessed May 3, 2013.)

I have yet to see any real economic growth in the U.S. economy as it was promised when quantitative easing was first introduced after the financial crisis. Quantitative easing is working to make big bank balance sheets strong and to create inflation, but I don’t see any economic growth being created by it.

I am looking at the Japanese economy as the best example of a country failing with long-term quantitative easing and what might be next for the U.S. economy and the dollar due to all this newly created money.

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Click below for the full article.

http://www.business2community.com/finance/u-s-dollar-to-become-the-next-yen-0486009

05.01.13
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Reuters: Fed holds steady on stimulus, worried by fiscal drag

Chairman of the Federal Reserve Bank Ben Bernanke attends the Treasury Department's Financial Stability Oversight Council in Washington April 25, 2013. REUTERS/Gary Cameron

The U.S. Federal Reserve said on Wednesday it will continue buying $85 billion in bonds each month to keep interest rates low and spur growth, and added it would step up purchases if needed to protect the economy.

Expressing concern about a drag from Washington’s belt-tightening, the Fed described the economy as expanding moderately in a statement that largely mirrored its last policy announcement in March. Fed officials cited continued improvement in labor market conditions and did not change their description of inflation, saying it should remain at or below the central bank’s 2 percent target.

But policymakers reiterated that unemployment is still too high and restated their intention to keep buying assets until the outlook for jobs improves substantially.

“Fiscal policy is restraining economic growth,” the U.S. central bank’s Federal Open Market Committee said in its policy statement at the close of its two-day meeting. “The Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation.”

Some economists were surprised that the statement did not contain a clearer acknowledgement of a recent weakening in the economic numbers.

Until recently, analysts had expected the Fed to buy a total of $1 trillion in Treasury and mortgage-backed securities during its ongoing third round of quantitative easing, known as QE3, with expectations the Fed would start to take its foot off the accelerator in the second half of this year.

Now, things are looking a bit more shaky.

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Click below for the full article.

http://www.reuters.com/article/2013/05/01/us-usa-fed-idUSBRE94003X20130501

04.24.13
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Daily Ticker: The Economic Argument Is Over — And Paul Krugman Won (Big Surprise, Some Keynesian Claims Victory)

For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.

On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This “stimulus” spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.

On the other side were economists and politicians who wanted to cut spending to reduce deficits and “restore confidence.” Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and “confidence” would return.

This debate has not just been academic.

Those in favor of economic stimulus won a brief victory in the depths of the financial crisis, with countries like the U.S. implementing stimulus packages. But the so-called “Austerians” fought back. And in the past several years, government policies in Europe and the U.S. have been shaped by the belief that governments had to cut spending or risk collapsing under the weight of staggering debts.

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Of course Keynesians are claiming victory.  When the bill comes due on the national debt, inflation goes wild, and a dollar crisis happens, what will they claim then?  What do you think about this writers victory claim?

Click below for the full article.

http://finance.yahoo.com/blogs/daily-ticker/economic-argument-over-paul-krugman-won-150247189.html