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Posts Tagged ‘Alan Greenspan

Central scam artists downgraded: Greenspan – Bernanke – Federal Reserve

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GoldSilver.com
Posted August 8, 2011

It seems Alan Greenspan, the Ex-Chairman of the US Federal Reserve and mentor of his protege in crime, current Fed Chairman, Ben Bernanke, should get their fables straight before they appear on television.  Check out how brazenly dangerous Alan Greenspan conducted himself this past Sunday morning on NBC’s Meet The Press:

 The United States can pay any debt it has because we can always print money…
Alan GreenspanAugust 7, 2011


Wait a second, perhaps Alan should check with Ben on their story because according to Ben’s interview late last year on CBS’ 60 Minutes, the US is not printing money and the monetary base is not expanding all that much:

One myth that is out there is that what we are doing is printing money. We are not printing money… The money supply is not changing in any significant way. –Ben Bernanke, December 5, 2010


It looks like Alan and Ben need to get on the same page when it comes to money printing and what is officially happening to the monetary base of the US dollar:

Finally there is the instant classic of Ben Bernanke’s recent denial of historical facts, common sense, and basic economic laws. Check out Ben’s ridiculous retort when asked by Ron Paul on July 13, 2011 as to whether or not gold is money:


Central bankers and the lies they tell are the antithesis of gold. When they blurt moronic statements in large public forums like the aforementioned examples, gold, the true money of mankind tends to explode to the upside. The central scam artists can say whatever they want.  The fact is that the dollar, euro, yen, franc, pound, peso etc. are and will continue to bow to true free market monies, gold and silver.

For this reason we continue to convert our paper debt based cash and fiat currencies into physical gold and silver bullion long-term. With central bankers like these, it is making the inevitable wealth exchange happen at breath taking speed with a real possibility of the move going parabolic. Are you ready?

Too stupid for words – If this doesn’t convince you hyperinflation is upon us, nothing will!

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by Andy Hoffman (Ranting Andy)
Posted August 8th, 2011

LAST NIGHT I CAME ACROSS AN ARTICLE DEPIECTING SUCH A LEVEL OF STUPIDITY, MORAL HAZARD, and chutzpah, that I had to reread it several times to make sure it wasn’t satire.  I figured there is no way such “luminaries” in the eyes of the doting public could possibly give such moronic, and destructive soundbytes, particularly during the most significant sovereign threat the U.S. has faced since Pearl Harbor.  But they DID anyway, and weren’t even challenged by the press.

I initially sent a brief email stating my loss of words, but as any of my readers know, that condition rarely lasts long, particularly when pertaining to an opportunity to castigate two of the people I hate most on EARTH, Alan Greenspan and Warren Buffett.  I had also gone essentially a whole day of sleep, but now that I’m refreshed the creative juices are again flowing. No need to list the Hall of Shame accomplishments of these clowns, particularly Greenspan who, unlike Buffett never earned a dime in the “legitimate business world” (sorry, I had to steal that phrase from Dr. Phillip Bombay in “Back to School”, my all-time favorite comedy).

Given the ongoing, and now accelerating, COLLAPSE of the U.S. financial system, sometimes one really needs to EMPHASIZE how far down the rabbit hole we have gone to realize that the odds of escape are no better than a ray of light in a black hole.

This weekend, amongst perhaps the most intense GLOBAL episode of “Sunday Night Special” ever, in an attempt to assuage investor fears, the puppet media trotted out their two biggest shills, Greenspan and Buffett, to give worldwide investors their sage advice.  But rather than to even hedge their comments, they straight out stated ‘all is well, nothing to see here.

Greenspan, in my mind THE NUMBER ONE PERSON RESPONSIBLE FOR THIS MESS, whom in his retirement years has been subtlely hinting that he remembers his roots as advocate of REAL MONEY (i.e. gold), decided to do a 180 and return to the Greenspan of old, fearless of “irrational exuberance” and ever-willing to implement the “Greenspan put” with a few strokes of his money-printing keyboard.

In response to a Meet the Press question regarding the validity of S&P’s decision to downgrade U.S. Treasury debt, he vociferously defended his former employers by stating  “The United States can pay any debt because we can always print money to do that. So there is zero probability of default.”  Yes readers, he actually said that, in front of a GLOBAL audience, fully believing this would be a comfort to bondholders, creditors, and rating agencies alike.

Even better, everyone’s favorite government sell-out and insider trading expert, Warren Buffet, had the gall to not only attack S&P, but add that a new rating of AAAA should be instituted so the U.S. could be UPGRADED!

Readers, we are entering a VERY, VERY DANGEROUS TIME, unprecedented in human history.  The largest, most destructive fiat Ponzi scheme of all time is on the verge of certain collapse, and frankly at the pace things are going such a cataclysm could occur at any moment. Bill H., also of GATA fame, penned a great missive this morning comparing the time frames of a mania versus a panic, driving home the conclusion about how fast things can plummet when CONFIDENCE is lost and FEAR takes over, as opposed to the slow-motion inflation of a GREED-based bubble.  That loss of confidence is picking up steam as we speak, and comments like this are the type that could potentially start an avalanche at any time.

Yes, Greenspan is an old, senile coot, but he has had more influence over world monetary policy than any man in history.  And more importantly, we now have the past TWO Fed Chairmen, Greenspan and Bernanke, who have cumulatively destroyed the dollar for 24 of the 40 years it has reigned as “reserve currency”, giving similar statements about ‘helicopter drops’ in terms of the arsenal available to them. With protests and in some cases riots going on all over the world in response to rising inflationary pressures (Egypt, Libya, Tunisia, Algeria, Bahrain, Greece, and now more civilized nations such as Israel and the UK), such massively hyperinflationary statements from the reserve currency’s LEADERS can only bode for potentially horrific near-term outcomes, in my view.

Sorry for the light humor about Back to School, as frankly this is no time for humor of any kind.  At the GATA conference, Jim Rickards spoke about the psychology of complex systems such as financial markets, noting that every system has its own threshold of pain, and that at any time we could witness the “straw that breaks the market’s back.”  Once the hyperinflationary genie is out of the bottle (and it’s pushing FULL FORCE at the cork right now), the 1971-2011 worldwide status quo will be GONE FOREVER, replaced by a MUCH SCARIER reality, the type that has inspired insidious fictions such as 1984, V for Vendetta, and Atlas Shrugged, as well as more diabolical realities such as Stalinist Russia, Fascist Italy, and Nazi Germany.

Holding any material portion of your “wealth” in DOLLARS, POUNDS, or EUROS appears SUICIDAL, particularly if held in insolvent BANKS in the U.S., UK, or Europe.  All one needs to do is look at the chart of Bank of America, THE LARGEST AMERICAN BANK, (http://www.ffiec.gov/nicpubweb/nicweb/top50form.aspx), which has been bailed out perhaps a half dozen times (on its own and via Merrill Lynch and Countrywide Credit), to realize that NO AMOUNT OF PAPER, ACCOUNTING CHICANERY, OR PPT SUPPORT, will ultimately be able to save the system.

NOW IS OFFICIALLY NOT SOON ENOUGH to PROTECT YOURSELF from the tsunami which is about to wipe out the Western financial system once and for all.  The receding of the waters is long past, and now the wave is within spitting distance of the shore

The Fed Uncertainty Principle

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by Mike “Mish” Shedlock

 

THE FED, BY ITS VERY EXISTENCE, HAS COMPLETELY DISTORTED the market via self reinforcing observer/participant feedback loops. Thus, it is fatally flawed logic to suggest the Fed is simply following the market, therefore the market is to blame for the Fed’s actions. There would not be a Fed in a free market, and by implication there would not be observer/participant feedback loops either.

Corollary Number One:

The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn’t know (much more than it wants to admit), particularly in times of economic stress.

Corollary Number Two:

The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Corollary Number Three:

Don’t expect the Fed to learn from past mistakes. Instead, expect the Fed to repeat them with bigger and bigger doses of exactly what created the initial problem.

Corollary Number Four:

The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it’s easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.

It’s the unfunded wars and the financial fraud, and the unwillingness to reform

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from Jesse’s Café Américain
Posted August 7, 2011

YES, THE US HAS SOME VERY REAL LONG-TERM ISSUES WITH SOCIAL SECURITY AND MEDICARE. Social Security is being strangled by the refusal to raise the income limit on the Social Security withholding tax in response to the gradual creep of inflation. If this limit was raised periodically the Social Security ‘problem’ would be resolved. 

Medicare and in particular the drug portions of the program added by the Bush II administration are driving costs much higher. And this is more of a problem because of the structural cost problems in US healthcare system. Big Pharma in the US is a powerful lobbying force, and Americans pay MUCH higher costs per benefit for their health care services.  This is inhibiting the steps that are needed to restructure the US healthcare system.

But Social Security and Medicare, without the drug program, have not substantially changed since the 1990’s, when the US was running a budget surplus, and then Fed Chairman Greenspan was reassuring the public that the Fed had a plan to deal with the lack of debt.

So what changed?

The repeal of Glass-Steagall and the growth of unregulated financial products, the co-opting of the regulatory agencies, the growth of corporate influence in Washington, and two unfunded and very costly wars of long duration, founded largely on lies and distortions following a despicable terror attack by a small group of people, coupled with tax cuts for the wealthy.

There is relatively little discussion, much less investigation, indictments and convictions, from one of the largest financial frauds in history.

And within twelve months of the crisis breaking, Wall Street bonuses were back to record levels, even as the rest of the country began its long downward spiral into debt, downgrade, and despair.

That is the long and short of it. And it bodes ill that these issues are so infrequently mentioned in the political and economic discussions circling Washington and New York today. Rational discussion and factual analysis has been overwhelmed by a well funded program of propaganda and sloganeering, and bought and paid for politicians and media which serve to direct the discussions according to the program of the monied interests.

And this is why the outlook for the US is so negative. Governance has failed, the system has been thoroughly corrupted or co-opted, and the planning and discussions cannot gain traction. Some have recently referred to Obama’s clarity gap because it is so unclear what he stands for, what principles he is willing to fight for.

The politicians of both parties, the media, and the business leadership are caught in a credibility trap in which the root causes cannot even be discussed, must less addressed, because they have all been involved in or benefited from a massive injustice in the financial frauds. They are complicit, and cannot act openly and honestly for fear of losing control of the debate, and of subsequent discovery.

“Every thing secret degenerates, even the administration of justice; nothing is safe that does not show how it can bear discussion and publicity.” – Lord Acton

And who do we see on American television this morning, providing economic advice and promoting the Wall Street prescription for a cure through a return to more bank deregulation? The angel of economic death, Alan Greenspan, a man without shame or honor as one of the great authors of the misrepresentations and mismanagement that led US into the financial crisis which rewarded the few at the expense of the many.

“The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.” – Patrick Henry

The real issue at the end of the day is reform. The US has been led down a dark alley and strangled in what history may recognize as a financial coup d’etat, and a campaign of economic war against the common people. The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.

“We are on the verge of a Great, Great Depression”

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by George Washington
Posted originally June 1, 2011

THE NEWS THAT FREQUENT CNBC GUEST Peter Yastrow of Yastrow Origer (and formerly with DT Trading) told CNBC that “We’re on the verge of a great, great depression. The [Federal Reserve] knows” is going viral today. But this is not news to anyone who has been paying attention. As I pointed out Tuesday, billion dollar fund managers agree: the government never fixed the underlying economic problems, so we’ll have another crash. I provided details last month: As noted in January, the housing slump is worse than during the Great Depression.

As CNN Money points out today: Wal-Mart’s core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday. “We’re seeing core consumers under a lot of pressure,” Duke said at an event in New York. “There’s no doubt that rising fuel prices are having an impact.”

Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in. Lately, they’re “running out of money” at a faster clip, he said. “Purchases are really dropping off by the end of the month even more than last year,” Duke said. “This end-of-month [purchases] cycle is growing to be a concern.

And – in case you still think that the 29% of Americans who think we’re in a depression are unduly pessimistic – take a look at what I wrote last December. The following experts have – at some point during the last two years – said that the economic crisis could be worse than the Great Depression:

States and Cities in Worst Shape since the Great Depression

States and cities are in dire financial straits, and many may default in 2011. California is issuing IOUs for only the second time since the Great Depression. Things haven’t been this bad for state and local governments since the 30s. Loan Loss Rate Higher than During the Great Depression

In October 2009, I reported: In May, analyst Mike Mayo predicted that the bank loan loss rate would be higher than during the Great Depression. In a new report, Moody’s has just confirmed (as summarized by Zero Hedge): The most recent rate of bank charge offs, which hit $45 billion in the past quarter, and have now reached a total of $116 billion, is at 3.4%, which is substantially higher than the 2.25% hit in 1932, before peaking at at 3.4% rate by 1934.

Here’s a chart summarizing the findings:

Indeed, top economists such as Anna Schwartz, James Galbraith, Nouriel Roubini and others have pointed out that while banks faced a liquidity crisis during the Great Depression, today they are wholly insolvent. See this, this, this and this. Insolvency is much more severe than a shortage of liquidity.

Unemployment at or near Depression Levels

USA Today reports today: So many Americans have been jobless for so long that the government is changing how it records long-term unemployment. Citing what it calls “an unprecedented rise” in long-term unemployment, the federal Bureau of Labor Statistics (BLS), beginning Saturday, will raise from two years to five years the upper limit on how long someone can be listed as having been jobless.

The change is a sign that bureau officials “are afraid that a cap of two years may be ‘understating the true average duration’ — but they won’t know by how much until they raise the upper limit,” says Linda Barrington, an economist who directs the Institute for Compensation Studies at Cornell University’s School of Industrial and Labor Relations.

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This is not economic theory; this is simple common sense

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from Jesse at Jesse’s Café Américain
Posted originally June 3, 2011

THE RECOVERY WILL NOT BECOME ORGANIC and sustainable until people receive a living wage, able to buy a lifestyle consistent with a democratic republic based on their labor without onerous rents from debt. 

This is not economic theory; this is simple common sense. If you want to have a consumer based economy, you cannot debilitate the consumers until they become serfs, because then one has obtained a different form of governance. Unless of course one can persuade the many to love their servitude and think hell is a heaven. The public policy argument revolves around the relationship between the distribution of power, and therefore the accumulation of economic power, as it always does throughout history. That is another matter. I am treating the economic argument and prognosis.

As for employment growth, the longer term ‘trend’ has not yet turned lower, and seems consistent with a stagflationary outlook. It is obviously in danger of rolling over, but it has not done so just yet.

America had been adding jobs for over twenty years with stagnant wage growth. And this was a result of the partnership between corporate America and the wealthy few with the government policy makers, especially including the Greenspan Federal Reserve. Warren Buffett called it a class war and there is no need to guess which class controls the discussion through the concentration of ownership in the mainstream media. The public cannot even mount a serious reform effort without it being quickly co-opted and used against their interests by a well-heeled propaganda machine.

As Simon Johnson famously observed, there was an economic coup d’etat in the States and it is still having its way with the public and much of the world at large. The financiers have breached the walls, and are sacking and looting the city. Neo-liberalism is little more than a resurgence of the corporatism of the earlier twentieth century, with the jackboots more selectively deployed overseas, at least for now.

And the global reaction against the Anglo-American banking cartel, and their infamous economic hitmen, is the substance of the ongoing currency war, the long standing struggle against colonialism. It is remarkable how with all the change, nothing of substance really changes, at least in regards to human behaviour.

A structural reform of the system is what is required, not short term stimulus or austerity at least for now. And in particular not austerity or more tax cuts for the wealthy which is the hallmark of an intellectually bankrupt theory.

The US economy is severely distorted after years of managerial abuse with an outsized financial sector and a bias towards domestic jobs destruction through an abandonment of long term public policy decisions and investments in favor of short term corporate profits and the public be damned. And there is no reform because the political administration of the system and those who observe and report on it has been generally captured and corrupted, and is stuck in a credibility trap.

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Above taken from a longer article originally entitled About the Non-Farm Payrolls and the Birth-Death Model–Credibility Trap

 

US Stocks in a Pivotal ‘Decision Square’ – the Fed as Outlaw

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by Jesse
Posted Café Américain 27 May 2011
http://jessescrossroadscafe.blogspot.com/

THE STORY OF THESE MARKETS IS A SLUMPING ECONOMY and a debilitated middle class versus currency debasement and excess liquidity, selectively spread amongst friends. And also an undercurrent of manipulation of prices and information, to extract wealth and shape perceptions. The management of perception is a facet of government, always. To think otherwise is to naively ignore history and the practicalities of leadership.

But when that management becomes a more powerful and self-serving impulse than the written law, than the public good and the very fabric that binds people together into a society, then it becomes an end unto itself, an extra-legal excess, literally outside the law, that invalidates the legitimacy of what had been an otherwise legitimate organization.

This phenomenon is most often seen in organizations with a long standing individual leadership by strong personalities, and an embedded bureaucracy that is excluded from effective oversight and the customary balances of power. One example of this is the late stage Hoover administration of the FBI, which began to turn in on itself and its own ends, and use its control of private information to control and subvert the political process.

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”– Charles Mackay

Of course these herds of the misguided often have a thought leader whose own perspective, and sometimes even delusions, become an almost unshakable set of core assumptions expressed as slogans and tenets of fundamental belief, the center of the whole, the familiar and comforting orthodoxy, and trusted filters of knowledge for a profession.

In the case of the Fed, it is based on similar principles as the efficient market hypothesis and of dogmatic deregulation, which are the natural goodness and incorruptibility of a highly educated and privileged elite, not subject to transparency and oversight, public checks and balances. These fatally flawed assumptions have been the cause of much misery in the last 30 years.

Power indeed corrupts all, and their thinking, even in the well intentioned.

And this is what I fear the Federal Reserve is becoming, or more likely, has already become. And so I would not necessarily argue that an independent central bank is a bad idea per se, although such an argument can certainly be made.

But I would propose that the Greenspan-Bernanke Fed itself has outlived its lifespan as an effective organization, and is in dire need of reform and refocusing, and it must come from outside the group think of their bureaucracy. And the Congress and the Executive seem insufficient to the task having been severely compromised over the years through participation in the Fed’s decisions and its control of money flows.

So the question of reform is problematic. The current government, both Republicans and Democrats, seem to be up to their elbows in the muck, beholden to a powerful elite and their vested interests that operate behind the scenes, and too often outside the law.

Terrible thoughts in their implications, and so most cannot bear to even think them. In times of the big changes people may desperately cling to the familiar, even if it is a rotting corpse of what it had once been. Reform is hard and often tedious work, never easy, and it has it own dangers. The cure may be as dangerous as the disease, and so it bears much thought and careful action. But action is required, it must be done.

Transparency and disclosure are always a first step, if not a prerequisite, to expose the true dimensions of a problem and the impediments to its resolution, and the flaws and conflicting priorities, and too often corruption and coverup, that always seem to underlie such systemic failures. ‘Let justice be done though the heavens may fall’ is a principle not in favor amongst those embroiled in a corrupted system. And so they rush to push out ineffective and superficial solutions in order to control the impulse to reforms and control the subjects of the debate in their own favor.

And this is what is paralyzing an effective response to the financial crisis in the US today.

“The control of information is something the elite always does, particularly in a despotic form of government. Information, knowledge, is power. If you can control information, you can control people.” – Tom Clancy

Let’s see which way the market breaks, perhaps before the long American holiday weekend.