Tuesday, January 26, 2010

The People Revolt!

Bernanke appears to be in trouble.

Who'da thunk it?

Well, me.

Before everybody who throws light upon the Fed's crimes celebrates, remember, if Ben is in trouble it is because the Fed's mostly foreign, private shareholders want his head. The People have no say. Congress is simply following orders.

So, why would the Money Power wish to do away with Ben?

Simple, he's probably trying to do the right thing. Ben is a hard core inflationist. The economy is sliding into a deep depression. Ben wants to move to 0%, finally lowering the Fed rate below the market rate for cash. He's on the record in countless places, suggesting he would use 0% without hesitation (try to forget his 2.5 years of hesitation). But that would actually make reserves cheap relative to the market rate for short term cash, possibly expanding the cash supply, and allowing macro prices to rise. The board won't let him do that.

A move to 0% would remove the Fed's BANK CRUSHING 1,000% suffocation premium (30 day Fed Rate of 0.25% / 30 day Market rate of 0.025%) on cash reserves for their finally-desperate competition. It is financial murder, playing out on a world stage before our eyes.

Remember, once the American golden goose is pronounced dead (= stops laying new credit eggs to buy Fed shareholders hookers and blow), the Fed desperately wants to deflate The Peoples' collateral prices against their inflated loan balances. The People must go bankrupt. That's how the Fed cartel seizes their stuff. It's an essential step in the Fed-owners' plunder of America. And believe me, that "exclusive club" of world crime king pins DOES NOT include little Professor Ben and his $2M estate.

If Ben is removed now, it's because the Fed plan calls for interest rates to go way up. This play has been called time and again, just as the Fed's non-cartel competition desperately needs cheap reserves.

If Bernanke insists upon 0%?



  1. FDR...Just in case you haven't already read it on Bloomberg

    "Fed Weighs Interest on Reserves as New Benchmark Rate"


  2. FDR I'm a little confused on your Bernanke take.

    Are we (owners of overpriced, over leveraged "assets") not collectively the "goose" laying the golden eggs in the form of interest payments and overpayments for the things we are deluded into believing are investments? It would seem to me a masterstroke to engineer the level of indebtedness we see around the world and its concomitant economic serfdom, at least from a bankers perspective. It would also seem that raising rates in some Volckeresque fashion would be the surest way at this point to kill the goose would it not? I'm all for a return to responsible lending but the economic patient is very ill and needs a long convalescence not euthanasia. For this reason I believe nominal rates (and economic growth) will be low for years however there will still be an ongoing withdrawal of credit privileges in the form of lower limits, higher down payments etc. Of course there will be some casualties along the way to Dow 3800 or 400 but the goose will continue to lay.

    In the end I do not believe it matters who gets the job of Fed Chairman although it does provide some nice theatrical cover for those now building large short positions. Specifically "everyone" thought a Republican win in Massachusetts would be market positive. Just like everyone thinks a Bernanke confirmation (while not a foregone conclusion - remember we need the theatricality) will be a market positive too. My guess is the market falls whether it's Bernanke, Volcker or the corpse of William McChesney Martin Jr.

  3. Has the Fed ever seized physical assets in the past? When? Where? Please cite examples and references.

    I won't be surprised if they have, but if they haven't then I'm interested in what your claim that they'll seize assets this time around is based on.

  4. You're getting some MSB press:



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