It’s not going to change anytime soon but suggesting that direct political control of monetary policy or that the US should have no central bank as Ron Paul has proposed, would be better than the imperfect Fed, is potty.
We deal in facts at Finfacts and your quote from Woodrow Wilson is a fake.
The first part has been attributed to someone else at the Versailles peace conference.
The part beginning : “A great industrial nation…” is from a 1912 campaign speech - - 2 years before the Fed began operations - - according to the Woodrow Wilson Presidential Library.
The global market of Credit Derivatives is estimated to be around $650 trillion,and the Fed has recently created or added to its or the governments balance sheet around just $13 trillion to try and contain the implosion of CDS losses.
The CDS losses at banks have been moved off balance sheet to give the illusion the banks are solvent,and Bernanke reckons the Fed is going to steer the US economy out of this without creating inflation!.
If the losses are so enormous and the response so far is just a tiny fraction of those losses,imagine how much money is going to be created over the coming years to keep the whole system afloat.
Oh dear,here we go again at the pin,nit picking over a few trillion dollars .What I said was “the Fed has recently created or added to its or the governments balance sheet around just $13 trillion to try and contain the implosion of CDS losses.”
If you want to draw a distinction between who issues the debt,the Fed or the treasury I’m not bothered,big picture is the government is in debt around $13 trillion,whether the Fed prints the money or the treasury doesn’t matter in the real world,the dollar is going to zero if they try and bail out the banks,the housing market,cash for clunkers,GE,Fannie,Freddie,Medicare,Afghanistan,Iraq pay welfare to the 20% unemployed and not raise taxes.
Wait until next year and see the avalanche of teaser rate mortgages going bad,how many extra trillion of bonds -in addition to the above - will the Fed have to buy at the long end to keep interest rates down then?
I also notice a reticence on your part to overtly criticise the Fed - why would that be?
Ben Bernanke’s Hyperinflation And Economic Collapse
4 December 2009 6 Comments
Weimar GermanyBy Greg Hunter
Yesterday, Federal Reserve Chief Ben Bernanke was in front of the Senate Banking Committee trying to hold on to his job. Some Senators were complimentary on Bernanke’s job. Republican Senator Judd Gregg from New Hampshire gave the Fed Chairman a warm welcome. Judd said, “If you hadn’t been there, and hadn’t been willing to take extraordinary action last fall, last winter, and even early spring … it’s very likely we would be experiencing a depression…” I look at Bernanke’s performance during the financial crisis the same way I would look at a drunken bus driver who crashes and then stumbles around pulling a few children out of the wreckage. In my eyes, Bernanke is hardly a hero.
Republican Jim Bunning from Kentucky, on the other hand, couldn’t have given a colder reception if he greeted Bernanke in the North Pole. Bunning said, in part, “Rather than making management, shareholders, and debt holders feel the consequences of their risk-taking, you bailed them out. In short, you are the definition of moral hazard.” Bunning, a former Major League pitcher, hurled another fast ball at Bernanke’s head when he said, “Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives.” Senator Bunning vowed to do everything possible to stop Bernanke’s nomination and to “end the Fed’s failures.” (Complete video of Senator Bunning’s comments below)
Good speech,Bernanke smirks his way through it and then stumbles and mumbles his way through his response,no chance of a proper interrogation however and he is soon let off the hook as he always has been in the past.
Well that’s just the problem isn’t it?The Fed never sees asset bubbles at all.It creates them and then looks the other way.
Greenspan never saw the Dotcom bubble - it was “Irrational Exuberance”,he never saw the housing bubble,it was all “covered” by credit derivatives anyway after the guys in dark glasses got Clinton to repeal Glass Steagall which allowed the banks on Wall St to underwrite all the sub prime loans to help fund the non housing bubble, so it couldn’t possibly go wrong and if it did,the credit derivatives would cover them wouldn’t they?.
And now we have a commodities bubble and short dated treasuries with negative yields ie investors are paying the government to hold their money for them,ie they are in a bubble,but Benny boy doesn’t see any of it,no siree bob,no extreme mis-valuations sir.It’s all about perception,it’s impossible to determine a bubble exists,un-anchoring of inflation expectations…blah…blah…blah.
A remake of the great disaster movie of 2008 is already being planned,after critics thought they had killed off any chance of a remake,here it is in all its glory “Carbon Trading -this time its for real”.They had the chance to kill the banksters on Wall St and they blew it,now they are back,bigger,brasher and more defiant than ever - lose at carbon trading? - impossible,and anyway if they do,Washington will bail them out since they are ever bigger than they were before,and they were too big to fail then - right? Justified by the phoney global warming scam,here is the result,a trading scam run by Wall St banks who are running a carbon trading casino using derivatives - yes the very same products that completely failed to accurately price the risk in sub prime mortgages and consequently caused the almost total collapse of the worlds banking system,so you would think governments and regulators would be just a tad cautious at allowing another derivatives casino start up again so soon?Not a chance,we’ve only got a few years to save the planet - they are only doing it to save the planet.Oh,and maybe make a few billion dollars profit, didn’t I mention that?
Those charts may imply those targets,but Bernanke is never going to let long term rates rise,he is going to buy ALL the long bonds to keep interest rates for mortgages down, to prevent further mortgage defaults.The money to pay for them will be electronicaly credited at the treasury,money out of thin air.
Re-introduce the act that was brought in after the crash of 1929 to prevent a reoccurrence of the casino antics of the investment banks that brought down thw whole system!!!
Words like stable,horse…door… are coming to me…
Yes Glass Steagall, had it been in place, would have meant Wall St banks could not have geared up 40/50/60 to 1 on derivatives,but so what,even if it is re-introduced or something like it,they can always get the President in office at the time to repeal it again,like Clinton did a few years back.