The colorful and insightful Bill Bonner of The Daily Reckoning discusses the economic crisis, speculating on how it plays out. As always, his views are entertaining and worthwhile. Mr. Bonner’s Views [...]
Bernanke
Jan 112012
We are living through the death throes of an empire. For those citizens who understand what is occurring, the process is akin to being trapped in a taxicab where the meter is on and running at an infinite pace. We cannot get out; nor will we be able to pay when the bill is submitted.
Government Duplicity
The duplicity and outright lies of government are becoming more apparent. There are too many to list here. Here are a few:
- Favorable forecasts regarding the economy are cruel jokes to everyone, but especially to those unemployed and underemployed. The country is told that the economy is out of the woods and on its way, recovering from the worst recession since the 1930s. No one with an IQ higher than room temperature or the ability to see should believe that.
- The Obama Administration stumbled badly with their first major promise. We were told that if the stimulus package was passed, unemployment would not exceed 7%. It was passed and unemployment soared over 10%. The package had no promised shovel-ready jobs and turned out to be the biggest pork bill ever. Virtually nothing went to Main Street to help individuals. Unions, government employees and other Democrat constituents were the primary beneficiaries along with the banking industry. President Reagan, like President Obama, inherited a difficult situation when he entered office. To the right is a comparison
of what happened under Reagan and under Obama. The chart compares unemployment rates. Changes in the manner in which unemployment is currently measured favorably distort the unmitigated disaster that is Obama’s economic policy. Adjusting data to the same basis, would make the comparison even worse. - To issue such an unemployment forecast, the Obama Administration had to be either desperate, economically illiterate, lying or just stupid. Feel free to pick from multiple categories is making your judgment. If that one forecast were all that was involved, there would be little need to harp. Yet every subsequent pronouncement or projection has similarly been wrong, often in similar magnitude. I have not checked all the statements, projections and claims, but I do not recall a single major economic promise or projection being correct. Many have resulted in additional outright lies to cover the impotency of this administration.
- The projections of Federal Reserve Chairman Ben Bernanke are no better. He is the only one who might be able to compete with Administration economists for worst forecaster of all time. Again, without checking every major item, I think he is batting 1,000 in terms of incorrect projections. YouTube and other websites provide ample evidence, mocking his dismal forecasting record.
Despite record stimulus, both fiscal and monetary, the economy has not improved. The declaration of the end of the recession was reminiscent of George W. Bush’s premature claims of victory in Iraq but was a necessary part of of the pretend and extend game that government must play. There is no escape from an economic apocalypse, hence much of the duplicity.
An Economic Collapse Is Unavoidable
It would not be too late to avoid this collapse if this were a corporation operating in a free market. In that case, a hard-nosed, savvy turnaround specialist could come in and save the company by slashing spending mercilessly. But we are dealing with a political entity run by political animals who are neither very smart nor very brave. In such a situation and especially today where leadership is absent in either political party, there will be no solution. Competing interests and entitlements are too entrenched. Politicians behave only to get re-elected and no one has ever run for office successfully by promising to cut programs. Imagine the slogan: “Vote for me and this is a list of things I will take away from you.” Thus, it is impossible to avoid the coming disaster.
The economy continues to worsen because we have squandered and continue to squander valuable resources in an attempt to avoid doing the right things. The political class has chosen to protect their positions by pretending that matters are getting better. The economic system is now so burdened with debt, price distortions and asset mis-allocations that we are on the verge of an economic collapse. When this happens or what of the many incidents that might trigger it is anyone’s guess.
The best efforts of both government and their media cronies are devoted to covering up Continue reading »
Dec 082011
This article from Unelected.Org should get your blood pressure up. If you have a problem in this area, perhaps you should not read it.
Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts
unelected.orgThe first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the right), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.
What was revealed in the audit was startling:
$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.
“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.” - Bernie Sanders (I-VT)
When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.
Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.
The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all placesView the 266-page GAO audit of the Federal Reserve(July 21st, 2011): http://www.scribd.com/doc/60553686/GAO-Fed-Investigation
Source: http://www.gao.gov/products/GAO-11-696
FULL PDF on GAO server: http://www.gao.gov/new.items/d11696.pdf
Senator Sander’s Article: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
Nov 032011
The talking heads on CNBC this morning are excited about the ECB rate cut. I assume it is because they are paid to generate viewership, although ignorance and/or stupidity should never be ruled out as an alternative or joint hypothesis.
Jim Cramer is one of several who believes this rate reduction improves the outlook. Soaring markets seem to agree with his position. But nothing of substance has changed. The underlying economic problems of Greece, the other PIIGS, Europe or the US for that matter have not been addressed. Today’s market euphoria is akin to celebrating the provision of more alcohol to an alcoholic. Temporary pleasure has been purchased at the cost of worse suffering ahead. The hangover from hell has been deferred, not avoided.
Michael Krieger interpreted the action properly:
Nothing has changed and absolutely nothing has been accomplished. There is no “solution” to the crisis that will not result in massive pain, confusion and wealth decimation. The reason is patently obvious. At least half the continent is completely and helplessly bankrupt. There are only two outcomes to the entire situation. Either the sovereign debts are written off aggressively and the banking system declared insolvent and restructured or the ECB decides to turn on those printing presses to the tune of trillions and destroys the purchasing power of the union in Zimbabwe-like fashion.
The belief that more credit will solve problems created by too much credit qualifies Continue reading »
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