June 9, 2009

Ben Bernanke (with straight face, taking the world for fools): "The Federal Reserve will not monetize the debt."


Ben Bernanke is a liar.

Period.

The Federal Reserve, acting in conjunction with the Obama administration and Treasury, will indeed monetize the debt.

Because they HAVE to.

But they can't admit it. They won't admit it. That would unleash fresh financial anarchy. But not admitting it doesn't mean they're not doing it.

They're doing it.

Because they HAVE to.

It hath been foretold.


Monetizing Debt: The Grandest of Larcenies

“Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation,” said Ben Bernanke in response to a question posed by a member of Congress. Then, he added…

“The Federal Reserve will not monetize the debt.”

That last sentence has a ring to it. It reminds us of Richard Nixon’s “I am not a crook.” Surely, it is destined to make its way into the history books, alongside Bill Clinton’s “I did not have sex with that woman” and the builder of the Titanic’s “even God himself couldn’t sink this ship.”

Monetizing the debt is precisely what the Fed will do. But it will not do so precisely. Instead, it will act clumsily…reluctantly…incompetently…accidentally…and finally, catastrophically.

25 comments:

Afterthought said...

They are already doing it now.

Here's how: they print money out of thin air, and give it to floundering "private" institutions; they tell the "private" institutions to take half of it for them selves and then use the other half to buy treasuries.

All this so that it still appears that there is demand for US debt.

Of I forget: recession over.

Not where I live. There are more for sale sign now than ever.

There are more boarded-up shops now, than ever.

There are NO new businesses.

There is NO new construction, but a ton of projects lay abandoned.

Don't confuse epinephrine with a healthy heart.

Tamarindo said...

Keith... bond market is saying to him "I dare you to try it"

I know who wins this one. Too bad we stacked all our debt to the front end of the curve. Ask Metallgesellschaft how that worked out. Oh it's funny watching these academic kids trade. Proves me right for never letting economists near my desk.

Oh and until the losses are taken (now unfortunately shifted to the public sector) THIS AIN'T OVER!!!! USA about to get rolled!!!!!!!!

Anonymous said...

Not making any excuses for Heli Ben or Turbo Tax Timmy, but they HAVE to say this. He knows he lying, we know he's lying, and the Chinses know he's lying too. If he were to admit they are going to do what mathematically has to be done, the dollar would collapse overnight. At least this way, it's hopefully slow and somewhat organized (like evacuating a burning airliner).

Anonymous said...

Bernanke may not do it in an obvious, big way. His successor as Fed Chairman, Larry Summers, will do the dirty work with a smile.

This will trigger a coup attempt by the Clintons in 2011. They and some military guys will step in and try to "rescue" the country from the incompetent Obama administration.

Out of the frying pan and into the fire...

Sir Harold said...

Remember this the US is the bald eagle and this is what it does,

http://www.youtube.com/watch?v=VklTs-Tid_I

and that is the US in a nutshell

the US, the dollar as of the next century will never go down, but those that speak against it and get on the radar of the govt will end up in hell on earth and wish they never spoke about it,

http://www.youtube.com/watch?v=VklTs-Tid_I

just toast, no jam said...

The US could also become a world leader of "hemp based industries" such as fuel pellets, textiles, building substrates, etc. as well, but noooooooo!

That would create too many new jobs, factory start-ups and new cash crops for farmers.

Just remember...
our US government officials says:
2 + 7 = 3

Just ask them! They will baffle you with bullshit!

We are sooooooooooo doomed, regardless of their fvcking charts.

Got food?

Anonymous said...

Bernanke will do exactly as he is told to do, Or ELSE.

The invisible hand will continue to direct the economy into the ditch and the smiling loquacious mulatto President will do as he is told to assist the Brotherhood Of Darnkness in setting up a New World Order.

Palin and Gingrich will ensure the GOP will be out of power for the next 50 years, or more, pormpting a really nasty little facsist regime with a dictator at the top.

You ARE owned and have no say whatsoever about what will happen.

Live with It. or Not.

More cheese doodles, soda and high fuctose corn for you and your fat, dumb kid. Drive to Wal Mart in the SUV for some a NASCAR action figures made from chinese lead. Stop on the way back for an extra large order of fried dough dipped in pure sugar and a gallon of regular soda.

America you're so Dead you cannot even fathom what is coming down the Road At YOU.

Summer of Rage '09 to begin soon.

FTW

pwnd said...

realtor

http://farm3.static.flickr.com/2460/3605053258_eed7637911_o.jpg

Anonymous said...

Well I for one don't feel sad for the Chinese. They were stupid enough to continue investing in our treasuries. Even when the writing was on the wall.

So they get exactly what they deserve.

EL Loco..who else? said...

What is Gold good for?
Honestly what is it used for?
Any industrial or nuclear applications? Medicine? Aviation?
Or just speculation....

Bernanke will monetize the US dollar and will base the value on the Trust of the United States institutions and goverment.

So he will start the printer and let;s hope that he has lots of ink.. or as he said in "60 Minutes"....a few computer clicks.

gutless and lazy said...

Wise investment advice for today: Hamlet.

http://tinyurl.com/nkxuz7

Honica Jewinski said...

What's the big fuckin deal here????

Is this supposed to be news, or outragous or something????

No, this is just Ben doing what Ben does...... Being the big jew telling the big jewish lie to you worthless American fatasses. Eat it up you ignorant fucks, everything'll be just fine, the big jew at the jew con-trolled Fed Reserve says so....

Anonymous said...

EL Loco..who else?,

Gold is rare enough and malleable enough to be a good choice for a medium of exchange. Yes a barrel of oil has more practical uses, but it's ahrd to make change...

Of course with modern technology you can easily make change with anything, by pushing numbers around in a computer. Instead of e-gold, think e-oil or e-wheat.

But tradition lasts longer than you think, look at the current value of the US dollar as an example of how long things last even though they make little sense. Gold has been money for thousands of years, it won't stop being so overnight.

vanilla ice said...

I hate that guy, Bernanke. No one realized how much they're being ripped off.

"What is Gold good for?"

It makes for a great electrical conductor. It has also proven good for capping teeth, especially if you're a rapper.

vanilla ice said...

"Last week, according to Freddie Mac, the average 30-year mortgage had a fixed rate of 4.9%. This week it’s 5.27%. At the margin – which is where most people live – this extra cost of financing pinches would-be homeowners. Either they buy a smaller house…or they pay less for it."

Ha ha!

Anonymous said...

Another idiot at Milken Institute and FT.com think home prices have to go up forever and moral hazard be damned:

How to Rebuild US Home Prices and Fix the Economy

Ross DeVol and Michael Klowden
June 5, 2009
FT.com

There are tentative signs that the US housing market is approaching a bottom but it is premature to declare that recovery is under way. Mortgage rates are low and tax credits to first-time buyers and lower prices are raising interest in home buying.

But as long as home prices keep plummeting, many potential buyers will sit on the sidelines. And homeowners who are underwater, with negative equity, might throw in the towel and default, putting more homes on the market – thus pulling down prices even more. Foreclosures and distressed properties already accounted for more than half of existing home sales in March.

If we want to create a broad-based housing recovery we must stop this downward spiral in prices. A number of government programmes have helped but have not yet stopped the bleeding. We suggest a new approach: give homeowners who owe more than their house is worth a financial incentive to stay in their homes and keep up repayments, by offering them a path to positive equity. Call it the homeowner principal forgiveness vesting plan.

More on this in a minute. But first, let’s look at what’s being done right now. The Obama administration’s homeowner affordability and stability plan is a step in the right direction to slow home-price declines. But it does not go far enough in addressing one of the fundamental problems: millions of homeowners owe more than their homes are worth. We estimate that 16.3m were underwater at least 10 per cent at the end of March; 6.5m more than 20 per cent; and 1.3m more than 30 per cent.

The first part of the administration’s plan allows homeowners to refinance with a loan-to-value ratio of up to 105 per cent through Fannie Mae. If you have negative equity of more than 5 per cent, you don’t qualify and must move to part two of the plan – loan modification. If stringent income and credit guidelines are met, the interest rate can be reduced to as low as 2 per cent. This will lower monthly payments and help many stay in their homes.

*snip*

Let’s say you’re one of these homeowners. Even if you qualify for a loan modification and can afford the new lower monthly mortgage payment, why would you keep paying it if you don’t have any hope of having equity in your home for at least a decade? Only those who are compelled by an old-fashioned sense of obligation might continue making payments.

To fix this conundrum, the Obama administration should add the homeowner principal forgiveness vesting plan to its program. Here’s how it works: After a valuation of the property and proper income and credit verification, two separate loans are made. The first loan, from Fannie Mae, would be for the current value. A second, interest-only loan, from the Treasury Department, would make up the difference between the current home value and the original mortgage.

*snip*

Yes, this plan would be expensive. If 1.5m homeowners were kept from foreclosure, it would cost the Treasury an additional $75bn (€53bn, £46bn) to $100bn. Many Americans might criticise rewarding people who made bad decisions, thereby creating a moral hazard. But it’s not just homeowners with subprime mortgages who are suffering. More than 60 per cent of homes that have been purchased since 2004 are underwater. Sure, the market could correct these problems on its own in time but it would be painful and disruptive. Besides, the moral hazard issue has been thrown out of the window thanks to troubled asset relief programme funds being issued to banks that originated or securitised many of these bad loans.

*snip*

This is a win-win programme that allows homeowners to keep their homes, raises home values, increases GDP and creates jobs. Even the biggest critic of government bail-outs can forgive those results.

http://tinyurl.com/ndgfs3

swannster river said...

>Twilight Zone Lobbying

>The fact that the Fed's image needed restoring is bad enough, but hiring an Enron lobbyist and expecting it to improve one's image is straight out of the Twilight Zone.


http://globaleconomicanalysis.blogspot.com/

RICO said...

The Fed has *evolved* into an Enron-like entity.

Bernanke is up to his neck in deceptive practices and collusion with the Wall Street boyz.

He's undoubtably been assured by the PTB that his 'actions' will be lawfully condoned under the banner of National Security and an accompanying legal immunity provision that provides for his participation as a National Crisis Situation Management Team Member.

In other words, he's been told to lie his ass off to buy enough time to cover up the massive fraud perpetrated by the banksters.



“I take full responsibility for what happened at Enron. But saying that, I know in my mind that I did nothing criminal.”

-Kenneth Lay

yoski said...

"What is Gold good for?
Honestly what is it used for?
Any industrial or nuclear applications? Medicine? Aviation?
Or just speculation....
"
It is used for money. It's relative scarcity, durability and divisibility make it ideal for use as money to accomodate the exchange of goods and services. What else would you want to use for money? Sea shells, rocks, IOUs or paper?

Your Jewish boss said...

Well, Well.

Lookie lookie.

Our very own resident low life bigot Honica jewinski is back foaming at the mouth.

Putz!

Your little ‘jew con-trolled’ mind will cause you misery till your last stinkin breath.

JaneZ said...

Palin and Gingrich will ensure the GOP will be out of power for the next 50 years, or more, pormpting a really nasty little facsist regime with a dictator at the top.
------------------------------

As personal circumstances get worse and worse for Americans they will probably do what most humans have done throughout history.

Get religion.

The Republican base loves Palin and Gingrich. As the religious numbers grow due to personal tragedy, so will the popularity of Gingrich & Palin.

Could go that way also.

Anonymous said...

The very closest one can come to the truth is to simply run official proclamations through an inverter.

Chinese students howl with laughter at our bald-faced lies.

Anonymous said...

EL Loco said...
What is Gold good for?
Honestly what is it used for?
Any industrial or nuclear applications? Medicine? Aviation?
Or just speculation....


Gold is a material that is accepted by most as a store of wealth (wealth being an accumulation of work/labor produced). Gold is accepted by most because it is impossible to cheat (i.e., print gold). If you could manufacture gold, it would be worth as much as sand. These are concepts that have been understood by humans for thousands of years, and only recently forgotten.

Anonymous said...

Keith,

Let's see if you catch my drift.

The Fed can print all he wants, and attempt to monitize all the debt he wants, but right now, the banks are sitting on top of this shit load of money and they aint lending it. No matter what the Fed does, they are not and will not lend it any time soon. Why? Simple, people, businesses, governments are going broke, poof, whatever you want to call it. There is no need for more credit.

Okay. We hope we got that squared away.

With that said, there will NOT be any hyperinflation. We are still in a deflationary period as I told you over a year ago when you were ranting about Schiff's prediction that the dollar was going to collapse and other countries were going to de-couple from the US. I see you and Schiff were right. If you followed Schiff's advised, you got your head handed to you, and I know you did Keith, I know you did.

Okay, another one squared away. Not to say that at one point we may not see inflation come back. Of course it will, it's just a matter of time. But for the time being, everyone is broke. As Calculated Risk put it, we're all broke now.

So you see Keith, hyperinflation is not coming, and the dollar will not collapse any time soon.

Suckers.....

Dny

Anonymous said...

let them rebuy those houses at 70 percent off as i have seen a few places at that much of a discount" and put an "idiot" on their permanent record.....