Monday, March 10, 2008

Smash the Presses Before Ben Bernanke Starts Printing

50millionmarkbanknote In about a year it will be the 90th anniversary of the establishment of the Weimar Republic, the nickname for post-WWI Germany and a moniker forever connected with the hyper-inflationary economy of Germany. That circumstance lead directly to the democratic election of Adolph Hitler and WWII.


In 1914, the German mark was worth about 25 cents, or four to the dollar. Nine years later in 1923, Germany had printed itself enough marks to make 50 million of them worth exactly one dollar.

Fed to Make $200 Billion Available To Lenders
Bank Seeks to Loosen Credit

(Neil Irwin and David Cho, Washington Post Staff Writers, March 8, 2008)

The Federal Reserve took strong action yesterday to restore order to frazzled lending markets while a new report showing unexpected job losses underscored the toll that credit markets are taking on the economy.

The world's financial plumbing is so clogged that the central bank sees a need for new steps to clean it out to prevent severe damage. Mounting panic in the credit markets is making it harder for Americans to get mortgages and is increasing the rates they must pay on credit cards and auto loans. Even solid businesses are finding it difficult to raise money to expand.

Bernankeben Ben Bernanke, who is the current chairman of the Fed is hardly a plumber. One can only wish he was.


Under his tutelage, we may as well take the book from the left hand of the Statue of Liberty and replace it with a can of gasoline. A torch in one hand, gasoline in the other, the perfect metaphor for an American economy so distorted and so finance-driven, it hardly deserves the name.


"Send us your investors, your huddled capital funds"


We are no longer a capitalist society and have not been one for some years now. We are an interest-rate dependent consumer society and the sole, wheezing, smoking engine left to support that house of cards is consumer confidence. Essentially, the American dream has become a confidence-game (noun: a swindle in which you cheat at gambling or persuade a person to buy worthless property).


The immediate problem is that a massive sub-prime mortgage fraud has sucked us dry of the basic fuel necessary for staggering on--confidence. There ain’t none left. The tank is dry.

Money Ben Bernanke is going to fill ‘er up on money. He and George Bush and Henry Paulson have connived between them a ‘stimulus package to bolster the economy.’ If you look up ‘bolster,’ one meaning is to support and strengthen and another is to add padding. I leave it to your judgment which definition most closely defines giving each taxpayer $300 to $1,200 of his own money to goose the economy in the sole interests of the above-named public officials' personal friends.


None but the Washington Post (deprived in these days of cutbacks of any true financial writer other than Steven Pearlstein) could possibly swallow without a fit of coughing, the swindler’s excuse that ‘the world's financial plumbing is so clogged that the central bank sees a need for new steps to clean it out to prevent severe damage.’ Who on earth fed WaPo that line? Certainly it was not vetted by Steve. I don’t doubt he choked on his coffee when he saw it.

The Fed said it will make $200 billion available to financial institutions in an effort to ease a crisis of confidence that is making it harder for families and businesses to borrow money.

"They're recognizing that financial markets aren't functioning well, and that that creates risks to the real economy," said Vincent Reinhart, a resident scholar at the American Enterprise Institute and a former senior Fed official.

Where do they get these people? Can I get a job at the Fed?

Whitecollarcrime Financial markets have been looted, Ben. Wake up. This is not about families and businesses, this is about pumping up the worthless investments hedge-funds created. It’s about papering-over the hole in the missing billions before their major institutional investors sue them for fraud and send the whole crop of $100 million a year criminals off to Sing Sing.


Bernanke’s $200 billion is merely the camel’s nose in the tent. He proposed to create (read that print) $100 billion a month to prop up the banks for at least a year, but essentially for as long as it takes. Another ‘surge’ in an unwinnable war--anything it takes to get George safely back at the ranch before this whole swindle collapses on his head. Every 12 months (unless it’s not enough), Bernanke proposes to add $1.2 trillion to a money supply that totals approximately $7 trillion.


DollareuroAnd the sworn duty of the Fed is to prevent inflation. Don’t cry for me, Argentina.

The dollar this administration has contrived to devalue by approximately half during its brief term in office, is now to be further demolished by stimulating, diddling, futzing with and printing their way over the edge of the cliff.  The printing press is to monetary policy as Viagra is to maintaining an erection. The one gives you a sore dick, but the other turns the United States into Argentina.

"A lot of what we've done has been mostly just to offset the tightening of credit that has arisen because of the financial situation," Fed Chairman Ben S. Bernanke said in congressional testimony last week.

Instead of simply cutting interest rates further, the Fed responded to this latest crisis yesterday with carefully targeted measures. The central bank said it will auction $100 billion to financial institutions, injecting money into the banking system by trading cash for troubled securities. The Fed will also make another $100 billion in cash available in exchange for securities issued by Fannie Mae and Freddie Mac, trying to restore confidence to the market for home mortgages.

The problems are the latest wave of a crisis in debt markets that began in August and reappeared again in November and late February. This crisis is one major factor in a pullback by consumers and businesses that has driven the economy to the brink of recession, or possibly over it.

  • Lie #1: Offsetting the tightening of credit is (for Ben) easier than tightening the handcuffs on the criminals who profited from this fraud on the taxpayer.

  • Lie #2: Measures were not carefully targeted, but recipients were. Wall Street will get its plumbing unclogged and you, dear taxpayer, will get the bill for it. (Before all this manipulation was factored in, your personal share of ‘unfunded debt,’ including tax breaks to the rich and an untaxed war, is—as of 8pm today-- $30,967.40. Family of four? Pony up $123,868.96.)

  • Lie #3: No one is injecting anything. They are not ‘trading for troubled securities,’ they are buying bad debts with your tax money. They are bailing out criminals, so that no one will call them at their game, which has been to fleece the American public and blame it on ‘market conditions.’

  • Lie #4: Bailing out Freddy Mac and Fannie Mae does nothing to restore confidence to the market for home mortgages, it merely supports fragile government backed institutions, who have been part of the game—again, with your dough. The same money you don’t have to pay child-care and health-insurance.

  • Lie #5: There was no August crisis in debt markets. In August, we had the first indications of a purposeful financial fraud, committed against investors by a consortium of co-conspirator mortgage salesmen, mortgage bankers, bond rating companies, investment banks and hedge-funds. This will probably turn out to be the largest and most damaging Wall Street fraud ever to bring down an economy—far larger than the 1929 crash.

  • Lie #6: A misnamed and lied-about ‘crisis,’ cannot possibly be a factor in anything other than the continuing cover-up of massive financial fraud.

Six lies is a lot of lies to pack into three paragraphs and 161 words. Amazingly, the WaPo failed to call a single one of them. No major newspaper in the United States has been carrying this as the widespread crime that it is. Steven Pearlstein has come the closest, which is why he no doubt spit coffee all over his office when he read the piece.

Repwaxmanhenry There is a cure for all this sickness and greed and fraud, but it will not be found in the halls of Congress, the meeting rooms of the Fed or within a new administration, no matter how much ‘change’ is promised.


Attempting to repair a half-century of financial malfeasance is as dreary a chore as trying to ‘fix’ communism. Just as Ronald Reagan never ‘won’ the Cold War (the wheels finally came off, while he happened to occupy the office), Bernanke, Paulson and Bush haven’t a clue about what to do. Other, that is, than run around with a torch in one hand, gasoline in the other, trying to calm crooked markets.

"The Fed has been running around putting fingers in dikes," said Diane Swonk, chief economist of Mesirow Financial. "Without that, the dike would have imploded, and water would have been spilling in."

Diane is closer to the truth than any of them. The dike will indeed implode and therein lies the only viable cure. An international crash.


The world danced around the Argentine problem, the Mexican difficulty and the Asian unpleasantness, but the financial capitals of the planet are not strong enough or flexible enough to waltz their way past an American crash.


From the ashes, we may be sufficiently humbled and perhaps even wise enough to do the things we haven’t courage enough to accomplish now;


  • Oversee the absolutely uncontrolled hedge-fund industry that triggered this mess

  • Disconnect business and industry from the IPO as a borrowing mechanism and send them back to traditional loans at traditional banks

  • Do away entirely, completely and irrevocably with leverage

  • Disabuse the investor of the charming fairy tale that uncontrolled growth is anything other than the definition of malignancy

  • Return corporate stock certificates to their intended purpose of investment, rather than speculative instruments

  • Make criminal the offer of stock options as incentives to management

  • Consider laws initiating minimum-term (3-6 month) investment requirements to reduce the volatility of markets

  • Tax capital gains as ordinary income

  • Do away with the income tax

  • Re-institute logical trade tariff policy

Those would be a few things that could be successfully accomplished following a crash. Add to those massive government investments in infrastructure, schools, public transport, alternative power sources, the de-corporatizing of agriculture and re-planning of our auto-centric and dehumanizing suburban sprawl.


Taking back control of the investment community would prevent the flight of scarce capital from the have-nots to the haves. Infrastructure investment, reorganizing agriculture, instituting tariffs and killing off the income tax are positive ways of creating good jobs at good wages. There is simply no political will to accomplish any of these goals, otherwise they would hardly have gained the half-century momentum that set us up for the current financial landslide, avalanche, tsunami or metaphor of your choice.


Meanwhile, someone please take the keys to the currency-printing presses away from Ben Bernanke.
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Media comment;



8 comments:

  1. Get with the program.
    Just ask Ben for money. We are the greatest super power on earth; we make the rules on economic policies. We can print as much money needed because who is going to stop us. China? Ha. Ben has a computer and a couple of key stocks whala 29 billion here 200 billion there. Billion, trillion, quadrillion. Our debit can go to quadrillions but who cares we have an unlimited blank check. The War, Medicare, Ben has deep pockets I suggest every American should be getting more tax cuts, more stimulus checks. I also want Ben to give me money so I can get into the stock market action.
    So get with the program there is an endless supply of money

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  2. Mortgage RevolutionApril 8, 2008 at 2:02 PM

    Mortgage Revolution
    Endless supply of money being given to banks and we the people have to pay for the bail out. It is time that the people take back our power. All people who have mortgages should not pay our mortgagees for 6 months. Let the Feds print more money and pay our mortgage for 6 months. Lets be honest the banks lend us money that they don’t have and make more money on interest then the house is worth. Have you notice that the mortgage rates have not aggressively went down as the sub prime did. Banks have now recovered and hit bottom, now it’s time for the people to get in on the Fed’s money hand out.
    Just stop paying our mortgages for 6 months, the money we save can increase consumer spending, thus get the economy going.
    If we have hit bottom for the sub prime problem, why are the Fed’s still injecting money for banks?
    Iraq. WMD? No it is because Saddam was causing the Middle East to become very volatile. We own Iraq. We now have a base in the Middle East. We own the oil revenue to help pay for the war. Oh yeh, we are right next door to Iran.
    The economy is going to pick up? Humm when it dose we need a tax revolt. One year tax free. Let the oil revenue from Iraq pay for that.
    Also, we need a market correction, some stocks are way over valued and a good correction will clean things up. Only the strong survive

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  3. There is no Recession
    The company earnings are fantastic, stock market booming. I am making around $120,000 a day. Thank you Fed and tax payer for allowing me to keep my housekeeper and chef. I Can’t believe Citigroup posted a $5.11 billion quarterly loss and the stock still went up. I love making money!!!
    I am going to get my houseman to start up my Porsche. I havn’t drove it for ove 6 months.
    If the market kept going down I would have to lay off my chef and sell a couple of my vacation homes.
    Keep printing money Fed’s and stay in the market. Bush is doing the right thing before he leaves office.
    There is no slowdown!!

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  4. The economic GuyJune 1, 2008 at 8:10 PM

    WE MUST ATTACK IRAN!!!
    We have just allocated 300 billion to the housing crisis, again we print more money. Was this money coming from? Just pick an amount and type it on the keyboard and whla print it.
    Why is oil going so high? I guess because you actually have to work for it. You know pay for exploration, find it, drill it pump it, export it.
    And yes we will run out. Not like money where George Bush uses his magic wand to produce any amount of money.
    It is simple economics the more money we print the higher inflation.
    Just like Food you actually have to plant it, harvest it transport it. And the same with any commodity you have to physically work for it. But in a virtual world all we have to do is type an amount and get a good statistician to
    WE MUST INVAID IRAN. Russia and China are getting to friendly. They may switch to the Euro dollar. Let’s be realistic Europeans are more responsible with their money.
    We own Iraq and that makes us a member of O.P.E.C. George Bush should stop asking O.P.E.C. to increase production and TELL them to. They better increase production and get the price down or else we will put them back to desert nomads tending to their camels.
    All countries know we rule the world. We can make Russia and all of South America bankrupt again. We can place China back to planting rice.
    Again this is why WE MUST INVAID IRAN

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  5. The Bank’s and the Fed’s have no moneyJune 5, 2008 at 8:53 PM

    The Bank’s and the Fed’s have no money. The Fed’s don’t make us money that’s not their job. Their job is to spend it wisely. But they seem to think they have an unlimited credit card. We pay taxes to the Fed’s they lend it to the banks with low interest then the banks lend the money to us with high interest. I think we are getting the shaft here.
    Oil is way to low it should be 150.00 – 200.00 a barrel. And what about the oil witch hunt? Nuts. I think we should go on a Fed witch hunt. Show us your balance sheet.
    Oil is physical and cannot be produced with the Fed’s magic wand. I think Mr. Bush said something about gas and a magic wand. Yes, you actually have to invest capital and work to produce oil as where money … pouf magic wand and paper money backed by paper.
    Now oil is need to heat our homes, run Industrial companies, transportation, additives for paints\ plastics and the list goes on.
    I think the Fed’s treat money as oil….. Unlimited supply
    The dollar was back by gold… Good collateral to have to support a countries currency. But not any more... The best choice would be Oil.
    And why is the Euro so strong. Why are they not lowering interest rates and printing money …. Maybe they learned something from Germany way back then? I don’t know I didn’t live through that time of hyperinflation and money printing. http://www.economist.com/diversions/millennium/displayStory.cfm?story_id=347363
    I think this is why Europe doesn’t print money out of control.
    I think the Fed’s should print lots more money and start buying Euros and top off the Oil Reserves.
    Now Today I have 1,000,000.00 one million U.S. I made from my oil business and I am going to Europe to spend it tomorrow as soon as I get off the plane my million dollars is worth 641,553.69. I just lost 358,446.31
    Now my question is
    Let’s take HP. The second quarter, earnings on sales of $28.26 billion. But if HP converted to Euro dollars. 18,041,555,164.61 you just lost 10 billion. Humm maybe that’s factored in somewhere.
    Job report comes out tomorrow it will be the new buzz word “better than expected.” Everything is better than expected. If everything is better than expected then why the Fed is’s printing so much money?
    Funny about HP buying EDS.
    EDS outsourced Bank of America’s IT help desk call center to India.
    Bring our jobs back home Bank of AMERICA. Or name it Bank of Indmerica
    Some good news.
    The Stock market is Hot lots of money to be made. Wall-Mart almost 60.00 but I found a stock with a repeat pattern. Anyone can make some easy money on this one. I suspect a rookie market maker or the Fed’s are in this one. CTSH on the NASDAQ has this pattern a teenager spotted and he calls it an up up. The stock will open up and continue going up 70 to 100 pts. Then on other days it will do what he calls a Down Up. The stock will go up then go down below the open and hang out there for a while then shoot up and close past the Open. It doses these patterns all the time except for the odd up down but it always goes up. I know that it will reach 40.00 easy soon. But after that I don’t know I have noticed that it drops very fast. But Easy money to be made. A 15 year old spotted this.
    About the Stock market Sir Isaac Newton:
    The Universal Law of Gravitation

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  6. Sitting in my big SUV waiting in the drive through with 10 other cars in front of me.
    I was going to park and stand in line but I herd that the Saudis are going to pump more oil, so great I don’t have to get out of my SUV and don’t have to sell my Hummer.
    I also want the US to subsidize gas like China. We print enough money we will never pay off the debit so go for it
    We made the world shook in fear when this comment was made.
    “Henry Paulson, the U.S. Treasury Secretary, said Monday that he had not ruled out any policy options, including intervention in the foreign-exchange market, to prop up the dollar.”
    Intervention, we are Masters of the Universe. Economic text books are being re-written base on our policies.
    I knew OPEC would take our demands seriously and pump more oil. And Iran will also take our proposal he! We will build you tame nuclear power plants, almost free.
    You just won’t be able to make nuclear bombs. He, North Korea listened to us.
    The problem with printing more money is Hyper-inflation, but that won’t be a problem for us as we control everything.
    The problem with pumping more oil is we will run out faster, but that won’t be 30 to 40 years.
    The problem with solar energy is that, it’s not profitable. How do you charge for the sun’s ultraviolet rays? And how do you tax the sun? It’s not a commodity, it’s free
    The FED’s want to regulate the futures market, oh I mean manipulate the futures market.
    If I think that there could be flooding on the corn crops I buy corn futures, if I think that there might be hurricanes in the gulf and shut down some drilling rigs.
    I should have the FREEDOM and LIBERTY to invest in the market on that speculation without the government’s Intervention.

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  7. SCARY!!! Obama VERY SCARY!!!!! “The Bail out Bubble”
    Has anyone questioned or considered the consequences of the unlimited printing of virtual money?
    Hyperinflation? Oil back to 150 a barrel?
    US dollar plunge below $0.50 as the more stable British pound or Euro dollar becomes the standard?
    People withdraw vast amounts of money to purchase Gold? Only if The Gold Confiscation of April 5, 1933
    From: President of the United States Franklin Delano Roosevelt
    to: The United States Congress
    Dated: 5 April, 1933
    Presidential Executive Order 6102 Is not brought back. Then gold is a safe bet.
    Obama is creating 3 million jobs.
    Let’s do the math
    Employ engineers, consultants, project managers, trades, and laborers.
    Average it out to $55.00 per hour * 3 million per hour = 165,000,000 per hour
    Times this by a 40 hour work week = 6,600,000,000 per week
    Times one year 52 weeks = $343,200,000,000 for one year
    This dose not include the material costs I would guess one 100 Billion per year
    Total of 443,200,000,000 for 2009 not bad
    4 year project times 4 = 1,772,800,000,000 of virtual money
    A funny side not…I used my fathers old calculator and it didn’t have enough zeros to do the calculation.
    It is simple economics Supply and demand. There is too much supply and no demand.
    I don’t see anyone I know buying a new computer, TV, Auto, house, renovations for another 2 to 4 years. And I and people will not buy a Ford, Chevy. Or Chrysler due to the quality and resale value. They better start on merger plans.
    Action must be NOW
    LET Israel destroy Iran’s nuclear facilities come on have a backbone, this is the best opportunity to act
    If Hamas can shoot rockets what do you think Iran is planning.
    If North Korea can produce a bomb it must be so easy for Iran to.
    Lets be honest do we really want Iran to be an Arab nuclear power?
    Saudi Arabia, U.A.E. and Israel are a short target...
    I just have a very bad feeling about irresponsible printing of virtual money. I call it “The Bail out Bubble”

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  8. Can't handle the truthApril 13, 2009 at 8:22 PM

    Arabs, Chinese’s, and Russians buy my debt
    Heh! I am buying a GM car and a new big screen TV also a new smart phone.
    Thanks Arabs, Chinese’s, and Russians for buying my debt
    Oh, I have a lot more debt for you and the government. Enjoy
    We have an unlimited credit card so don’t mess with US

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