Bernanke Has Lost All Credibility

On June 3, 2009, Fed Chairman Ben Bernanke made a simple statement before Congress, under oath: “The Federal Reserve will not monetize the debt.” Oops. If any doubt remained that the Fed will do just that, Dallas Fed President Richard Fisher squelched it last Friday when he bluntly stated in a speech , “For the next eight months, the nation’s central bank will be monetizing the federal debt.” Zing. As I see it, there are two possible explanations for Mr. Bernanke’s mis-statement : He lied. He’s a vacuous bank-puppet with absolutely no business running a donut shop, let alone the Federal Reserve. I can’t decide which is worse… Either way, a good old fashioned impeaching is definitely in order. It won’t happen, of course. But a man can dream, can’t he? The good news is that Bernanke’s credibility is stretched razor-thin at this point. If you aren’t convinced yet, watch this video on YouTube. Eventually, the banksters will be exposed and restrained. Hopefully that happens sooner rather than later. Unfortunately, we’ll need a big catalyst to spur real change; that catalyst will probably not be something pleasant. At least we won’t have to suffer through more ridiculous editorials about Fed “exit strategies.” There is no exit strategy— only a desperate fight to prop up TBTF banks at all costs. Extend and pretend, the bonuses must flow. Wall Street firms will pay out a record $144 billion of them this year, by the way. Savers and retirees will continue to bear the brunt of this greed and recklessness, another point Mr. Fisher slammed home in his speech: But I take no comfort, and see considerable risk, in conducting monetary policy that has the consequence of transferring income from the poor and the worker and the saver to the rich. Senior citizens and others who saved and played by the rules are earning nothing on their savings, while big debtors and too-big-to-fail oligopoly banks benefit from their subsidy. It is refreshing to see such blunt criticism coming from a sitting Fed President, but Mr. Fisher and his hawkish allies are hopelessly outnumbered by doves at the Fed. Bernanke and William Dudley (NY Fed Pres, Goldman alum) run the show for now. As long as they do, the beatings printing will continue. When inflation rears its ugly head, they’ll sheepishly defend their actions as “necessary to prevent yet another Great Depression”; that they “couldn’t have seen it coming,” and things would have been unfathomably worse, had they not acted. It’s a easy argument for them to make, as it is impossible to disprove. The precious metals owner’s conundrum As much as I despise the…

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Bernanke Has Lost All Credibility

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