News & Analysis
Central Bank Narrative Grinds On via AP
Ben Bernanke makes strong defense of Federal Reserve's rate policies ... Chairman Ben Bernanke offered a wide-ranging defense of the Federal Reserve's aggressive policies to stimulate the still-weak economy. The Fed needs to drive down long-term borrowing rates because the economy isn't growing fast enough to reduce high unemployment, Bernanke said in a speech to the Economic Club of Indiana. The unemployment rate is 8.1 per cent. Low rates could also help shrink the federal budget deficit by easing the government's borrowing costs and generating tax revenue from stronger growth, Bernanke argued. – AP
Dominant Social Theme: The Fed is doing what it can; the economy is doing what it must.
Free-Market Analysis: We cover elite promotions that support expansive government, and no single such meme is more important than the necessity for central banking.
It is central banking that evidently and obviously funds the push toward world government. The same never-mentioned elites (in the mainstream press, anyway) who control central banking via the centralized Bank for International Settlements have used the astounding volume of Money Power to build a global governmental infrastructure.
At the beginning of the 20th century there were very few central banks. Now there are 150 plus the Bank for International Settlements.
This story from AP, one of the central mechanisms of elite media control, illustrates once again how the central banking meme works.
The article is devoid of any significant frame of reference. It simply reports Ben Bernanke's point of view without referencing what many economists believe to be true – even Keynesian ones – that absurdly low interest rates create bubbles.
Here's more from the article:
The chairman cautioned Congress against adopting a law that would allow it to monitor the Fed's interest-rate discussions. The House has passed legislation to broaden Congress' investigative authority over the Fed -authority that would include a review of interest-rate policymaking. The Senate hasn't adopted the Bill.
Bernanke warned that such a step would improperly inject political pressure into the Fed's private deliberations and affect the officials' decisions.
His speech follows the Fed's decision at its September 12-13 meeting to launch a new mortgage-bond buying program. The goal is to try to drive low mortgage rates even lower to encourage home buying. Increased home sales could help spur hiring and accelerate economic growth.
The average rate on a 30-year fixed-rate mortgage is already 3.4 per cent, a record low. But some economists think home loan rates could fall further, in part because long-term Treasury yields are much lower: The rate on the 10-year Treasury is just 1.62 per cent.
After its September meeting, the Fed said it would keep buying mortgage bonds until the job market showed substantial improvement. It also decided to keep its benchmark short-term rate near zero through at least mid-2015.
What the article is referring to here is the just-announced easing that the Fed has embarked upon in which mortgage bonds are purchased, thus shrinking supply and presumably lowering long-term rates.
This is just part of the larger money manipulations that the Fed is involved with every day. Central banks around the world have injected tens of trillions into the global economy since the crisis of 2008. Effectively, the NEXT great economic disaster has been seeded by the insanity of this money printing.
In the US, the Fed basically has a monopoly on money printing and money circulation. As there is one currency and one financial system, rather than competing interests, the power wielded by those behind the money system is absolutely extraordinary.
It would be bad enough were this system merely emplaced as "business as usual." But there is plenty of evidence that those running it regularly expand and contract credit to further centralize power and authority in the current system.
By driving entrepreneurs out of business, those at the top make sure that competition is lacking. Those who do make it to the top, like Bill Gates, are eventually intimidated into going along with the program of monetary centralization.
Gates was famous for stating as a young man that he didn't intend to disburse his fortune before his death. But after his company, Microsoft, was sued by the government over so-called monopoly practices, Gates's behavior changed.
Following the course apparently laid out for him by his high-powered attorney father, he became friends with Warren Buffet and set up a charity that was endowed with his entire fortune.
Buffet himself is traveling around asking other high-powered moguls to place their money in trust for charities. But if one is inclined to accept a Money Power paradigm almost nothing about these requests directly involve charity. Rather, they are a way of separating people from their fortunes. There can only be one Money Power.
To ensure that top people "get the message," Gates has been put very publicly in charge of a vaccine charity that disburses "jabs" around the world. This is made to look like Gates's idea but in reality, large, charitable programs are efforts that enforce elite priorities and benefit greater government far more than the greater good.
Large vaccine programs promote public health policy despite questions about the implementation of many of its programs. Additionally, public health promotes yet more centralization of government.
Money Power seeks greater government because it uses government via mercantilism to realize its goals. It is the conflation of the public with the private that gives Money Power its ever-growing, behind-the-scenes authority.
The most powerful tool in the power elite arsenal is undoubtedly central banking itself. The reason that Bernanke is allergic to interference with Fed affairs is because the Fed is evidently and obviously run for the benefit of those who control it.
There are many who will take the academic approach and point out that the Fed is ultimately supervised by its board of directors and Congress but this avoids the reality of the BIS in Switzerland and the way the system has been set up. A larger intelligence is obviously operative.
The lack of mainstream insights into the way central banking really operates is compounded by lack of criticism over the "economics" of central banking.
At its heart, central banking is nothing more than brutal price fixing. It is incredible that in an acting academic of myriad thousands of economists around the world, none choose to write what is obvious:
A handful of men in numerous countries meet every few days to designate the price and value of money. This sort of price fixing over time creates great booms and ruinous busts. We are living through one such today.
Nonetheless, you will not find these issues regularly referred to in the bought-and-paid-for mainstream press. They will be mentioned occasionally in the editorial pages but that's about all.
The main media mechanism for topic avoidance is simply to report on the "facts" of the news when it comes to money without mentioning the larger frame of reference that is so important for understanding what's really going on.
This is one reason that news and media reports generally seem so schizophrenic. While issues relating to what's actually taking place are often written about and opined upon, mainstream news has been rigorously disciplined into a kind of self-censorship.
Conclusion: This allows the powers-that-be to continue to flog a preferred narrative without fear of interruptions. One can comment on the news but the narrative itself flows along unimpeded.
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Posted by dotti on 10/03/12 05:03 PM
Danny, I'm pretty much done working for today and accessed the two links. I am totally amazed. I had not clue. Is this being reported by the MSM at all?????
I had to point out what seemed the most amazing part at the very end of the second article:
"I'll leave you with this, from today's Journal editorial: 'Imagine the uproar if, barely a month before Election Day, the Bush Administration had responded to a terrorist strike-on Sept. 11 no less-in this fashion.'
There certainly is a different standard.
Thanks for the links. Please continue to post if you get more info!
dotti
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Posted by dotti on 10/03/12 12:18 PM
@Danny
Thanks for your reply.
Re: As far as America stepping up as debtor, I find that hard to swallow.
My sentiments exactly. Self-serving to say the least.
Re: Socialism negates the work ethic. So, here we are,,, broke and deluded.
I remember when the Japanese were "ruling the world" and they supposedly wanted to curb the work ethic of their populace, I said, be careful what you wish for. Although I do not think that is what caused their problems, it is a slippery slope.
I don't think that Ayn was a psychic, but she knew human nature and understood the development of cultures. I don't know how to avoid the pitfalls. Our US Constitution should have given us the best hope. So much for that.
I haven't checked out the Bengazi story yet. Wanted to reply to the other two comments.
Thanks.
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Posted by Danny B on 10/03/12 10:16 AM
Dotti, there are claims that there was never a consulate in Benghazi.
Click to view link
There is supporting evidence.
Click to view link
The West is determined to trash Syria. Iran knows that they would be next in line so, they have been very generous with arms. Russia can't let Iran fall.
As far as America stepping up as debtor, I find that hard to swallow.
If you take any given country, their main problem is to grow their economy to keep pace with rising population. With mechanization of agriculture, this became more attainable. With birth control, it became even easier to keep a balance and raise the standard of living.
Industrialization and birth control raised the standard of living, not finance.
That's why china is rushing headlong into industrialization and birth control.
Fiat currency is a chimera at worst and a tool at best.
GDP per person is the only thing that you can "eat"
The West promoted democracy knowing that it would gradually morph into socialism.
Socialism negates the work ethic. So, here we are,,, broke and deluded.
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Posted by dotti on 10/03/12 04:47 AM
Here is the source:
Click to view link
debkafile's exclusive sources report that an administration team has hurriedly put together a list of 20 endangered countries where US diplomatic, military and economic may be targeted for al Qaeda attack.
The list is prioritized according to the level of risk and US security capability for protection.
The highest-risk locations have been quietly evacuated - either to the US or West European countries - leaving only a skeleton staff behind for emergencies. A senior American source told DEBKAfle Tuesday that Tunisia, Libya, Mali, Nigeria and Egypt have been virtually denuded of a US presence.
Middle East intelligence observers have told debkafile that they don't recall US diplomatic military and intelligence personnel, businessmen and technical staff with their families being withdrawn from the region on this scale or at comparable speed.
President Obama made American retreat his order of the day after refusing to heed calls for a US military operation against AQIM and its head, Abdelmalek Droukdel. It was Droukdel, according to accumulating intelligence who, acting on behalf of Zuwahiri, orchestrated the Libyan Ansar al-Shariah militia's murderous attack on the US Benghazi consulate.
The Washington Post reported Tuesday, Oct. 1, that Obama also decided against a punitive attack against al Qaeda's stronghold in Mali.
Don't know how reliable this information is.
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Posted by dotti on 10/03/12 04:39 AM
Hi, Dave.
Yes. I think you are right. Right now we are far from the "worst case scenario" that I believe is unavoidable at some point.
I don't do MSM, but saw somewhere that many of our embassies are being evacuated. It made me think what my parents would have thought of that. In their era, it would have been totally unthinkable. Now I even wonder if it is true. It seems to get so little notice.
Danny, as a purely intellectual endeavor, I have sometimes tried to go back to some point in time and say: that is where it all began. I have seen many references to 1971 and Nixon taking us off the gold standard. However, there was a reason that he took that action: we were already in trouble. USA was already spending above our means.
I have actually seen someone espouse the view (probably from academia) that USA boldly stepped up and accepted role of debtor in order to fund the economic advancement of the world. Hmmmmm.
If I were to pick a point, it would be far earlier than 1971. Probably at least with the formation of the Federal Reserve.
Someone here at the DB put the starting point as 1860 or so. I am not a historian, but I could certainly believe that was a critical time in our history.
I notice that gold/silver are the only two commodities in the green at 4:26 EDT. It's probably not meaningful. Only a slight difference.
Oh, well. At this time of the morning, I'm just looking for what the day will bring.
Wondering if I should submit myself to the aggravation of watching the presidential debates. Wondering if any of it matters.
I feel a sense of resignation. I think many people do.
Dave, you mentioned on another thread something about responsibilty to the truth. I guess that would be Truth, with a capital "T". The only way I would be bold enough to try to dissiminate truth as I see it--not sure of what Truth is right now--would be under the influence of alcohol. My better judgment is usually in control and I don't rattle people's cages. In my younger days, I would have. I long for a group of like minded folks, but DB is my only outlet for that type of discussion.
I'm waxing waaaaaaayyyyyyy too philosophical here. Time to give up and try to go back to sleep.
Thanks to all for your contributions to this forum. Especially to DB for providing venue.
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Posted by mark on 10/03/12 03:19 AM
DB. Why do you keep referring to CBanks fixing the price and value of money. Surely they fix the price and volume of currency(ies). They may also affect the price of money (gold and silver bullion). Why do you not distinguish between currencies and money?
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Posted by dave jr on 10/02/12 11:02 PM
dotti,
You are close to the way I understand it. The gambles were done in the 90's boom. The winners won and the losers are being bailed with QE. When it is all settled, we (you and I) will find out the price of the QE settlement with rampant inflation. It has only begun.
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Posted by dave jr on 10/02/12 10:43 PM
Perhaps the Bernanke would command more respect if he grew his hair out, combed it up and colored it red. I know he is only another actor, but what does Bozo the Clown's antics reveal of the screen writers?
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Posted by Danny B on 10/02/12 09:41 PM
At the heart of everything, I believe that the FED wants to survive. When the U.S. started losing manufacturing market-share in the 90s, Greenspan blew a bubble to compensate. He was a smart guy and he knew what happens to bubbles. He had to find a replacement from academia,,,, somebody with their head in the clouds.
As each bubble popped, a bigger one had to be created. The banks were forced to trash their lending standards to create an adequate bubble.
The latest bubble is a reflation of asset prices. The FED reflated asset prices hoping to reflate housing. It didn't work because housing prices are a result of wages, NOT asset prices. Wages are falling because of global wage arbitrage and declining consumptive power.
"Without a rise in incomes across the board there will be no sustained housing recovery. Period. Instead we'll have an economy like that of any other third world country"
Bernanke hoped that the investor class would spend more and lift general wages. There really wasn't any hope to lift wages at the same time that whole sectors were outsourced.
Congress is talking tough to the FED because they want more control,,,,, or at least, more printing. Bernanke tries to clearly show congress that printing won't solve all the problems.
"Many other steps could be taken to strengthen our economy over time, such as putting the federal budget on a sustainable path, reforming the tax code, improving our educational system, supporting technological innovation and expanding international trade," he said."
Click to view link
This is an excellent article;
Click to view link
"the crash has left US households with a collective $6 trillion hit to household assets and most of that is home values. So we have positive wealth effects for the rich and negative wealth effects for everyone else"
Eric Janszen believes that the bond market will blow all to hell.
"the effect of the Fed and Treasury herding all of us en masse into a wealth destruction pit."
Congress has indirect control over the FED. I believe that they want direct control.
I think that it is safe to assume that the PTB want fascism for profit and collectivism for control. Mises delineated it pretty well; Socialism can never work.
Click to view link
I suspect that a blowup of the bond market will destroy the dollar for external use.
Stay tuned for the next episode fiscal follies.
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Posted by Clive Edwards on 10/02/12 08:21 PM
Being able to manipulate the financial system is the economic equivalent of a snake eating a rabbit, with the same results: a fat snake and a dead rabbit.
]In the US, the Fed basically has a monopoly on money printing and money ]circulation. As there is one currency and one financial system, rather than ]competing interests, the power wielded by those behind the money system is ]absolutely extraordinary.
]It would be bad enough were this system merely emplaced as "business as usual." ]But there is plenty of evidence that those running it regularly expand and ]contract credit to further centralize power and authority in the current system.
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Posted by dotti on 10/02/12 05:52 PM
DB: At its heart, central banking is nothing more than brutal price fixing. It is incredible that in an acting academic of myriad thousands of economists around the world, none choose to write what is obvious:
A handful of men in numerous countries meet every few days to designate the price and value of money. This sort of price fixing over time creates great booms and ruinous busts. We are living through one such today.
I have seen this explanation and realize its power, but I see more here that I want to add.
If there is a table of gamblers, say poker players, and some are offering up a limited amount of money in the form of chips and others are simply tossing in pieces of paper in the form of IOUs, the "risk" is being placed only on the players who are using real money. There is no risk to setting out an IOU because it is an unlimited resource.
Federal Reserve Notes are nothing more than IOUs. And the world governments are forcing us to accept those IOUs as real money. They are discriminating against "savers" and redistributing newly created money to their cronies. "Savers" are being coerced into putting their money into equities, as a means of enriching the Wall Street Crowd.
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Posted by Dilence Sogwood on 10/02/12 03:57 PM
So the Bernake says savers can't save unless they have a job.
Premise #1 - you need Quantitative Easing to have a job (or to have your specific job)
Premise #2 - Savers need current W2 employment
Both premises are wrong.
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Posted by earnst on 10/02/12 03:23 PM
"The CBO,BIS, and IMF have concluded that the US balance sheet "is in flames and it's fire department is asleep at the station house."" - Bill Gross CNBC today 10/02/12. Perhaps it's too much to hope there might be some dissension toward reserve at the reserve? No, no a replacement must be found.
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Posted by Adam on 10/02/12 02:28 PM
DB: 'Nonetheless, you will not find these issues regularly referred to in the bought-and-paid-for mainstream press. They will be mentioned occasionally in the editorial pages but that's about all.'
"What the people manning the printing presses - and their political masters - had yet to really grasp is that they weren't just producing money here, they were producing inflation."
'Stephanie turns her attention to the radical free-market economist Friedrich Hayek. Travelling from London to Vienna and America, she unravels the extraordinary life and influence of the only free-market thinker whose reputation has grown post-crisis.
'With contributions from Central bankers, politicians and a Nobel laureate, she explores why despite his enormous influence, no government has ever dared to fully implement Hayek's solution to the problems of capitalism - set it virtually totally free from state control.'
YouTube: BBC: Masters Of Money 2/3: Friedrich Hayek
Click to view link
