Caught In A Lie: Bernanke Promised Congress The Federal Reserve Would Not Monetize The Debt But Now That Is Exactly What Is Happening
by ilene - November 7th, 2010 2:39 pm
Caught In A Lie: Bernanke Promised Congress The Federal Reserve Would Not Monetize The Debt But Now That Is Exactly What Is Happening
Courtesy of Michael Snyder at Economic Collapse
On June 3rd, 2009 Federal Reserve Chairman Ben Bernanke promised the U.S. Congress that the Federal Reserve would not monetize the debt of the U.S. government. On November 3rd, 2010 the Federal Reserve announced a massive quantitative easing plan which will involve the purchase of 600 billion dollars of U.S. Treasury securities by the middle of 2011. Creating 600 billion dollars out of thin air and using them to buy up U.S. government securities is monetizing the debt. So Federal Reserve Chairman Ben Bernanke has been caught in a lie. Will we ever be able to trust a single word that he says ever again?
Monetizing the debt is a desperate act. It is a signal that we are rapidly reaching the end of the game. Slamming interest rates all the way to the floor did not revive the U.S. economy. Hundreds of billions of dollars in extra government spending did not do the trick either. The U.S. economy is still dying and the U.S. government is now beginning to find it very difficult to locate buyers for all the debt that it is constantly issuing.
So the Fed apparently hopes that this new round of quantitative easing will be a way to finance the exploding U.S. government debt and spark an "economic recovery" at the same time.
But didn’t Bernanke promise that the Fed was not going to do this?
Didn’t he pledge to Congress that the Federal Reserve would not monetize the debt?
Yes, he did. The following is video footage of Bernanke from June 3rd, 2009 promising that the Federal Reserve would not monetize the debt….
So much for keeping his promises.
But what else can Bernanke do?
The truth is that we are reaching the end of the economic rope and the Federal Reserve has already played all of the other tricks that they have in their bag.
Buying up massive amounts of U.S. government debt and showering the U.S. economy with money is a desperate attempt to keep the shell game going for a few more rounds.
Once upon a time, the U.S. dollar was the strongest currency on the planet. The rest of the world loved to use it as a reserve…
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The Last Half
by ilene - September 11th, 2010 11:37 pm
The Last Half
Courtesy of John Mauldin at Thoughts from the Frontline
The Last Half
But It’s More Than the Deficit
Not Everyone Can Run a Surplus
Pity the Greeks
The Competitive Currency Devaluation Raceway
Amsterdam, Malta, Zurich, Mallorca, Denmark, and London
There are a number of economic forces in play in today’s world, not all of them working in the same direction, which makes choosing policies particularly difficult. Today we finish what we started last week, the last half of the last chapter I have to write to get a rough draft of my forthcoming book, The End Game. (Right now, though, it appears this will actually be the third chapter.) We will start with a few paragraphs to help you remember where we were (or you can go to www.investorsinsight.com to read the first part of the chapter).
But first, I recorded two Conversations yesterday, with the CEOs of two biotech firms that are working on some of the most exciting new technologies I have come across. I found them very informative, and we will post them as soon as we get them transcribed.
For new readers, Conversations with John Mauldin is my one subscription service. While this letter will always be free, we have created a way for you to "listen in" on my conversations (or read the transcripts) with some of my friends, many of whom you will recognize and some whom you will want to know after you hear our conversations. Basically, I call one or two friends every now and then; and just as we do at dinner or at meetings, we talk about the issues of the day, back and forth, with give and take and friendly debate. I think you will find it enlightening and thought-provoking and a real contribution to your education as an investor. Plus, we throw in a series I do with Pat Cox of Breakthrough Technology Alert, where we interview some of the leading up-and-coming biotech companies; and I also do a Conversation with George Friedman of Stratfor 3-4 times a year. Quite a lot for the low price.
I recently recorded a Conversation with Mohamed El-Erian, CEO and co-CIO of PIMCO, who is one of the smartest human beings I know, as well as one of the nicest. As you can see,…
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Checking in With Damien
by ilene - January 22nd, 2010 6:14 pm
By Ilene
This week, Damien Hoffman founder of Wall St. Cheat Sheet talks with me about the stock market, the economy, politics, corporations, and about his plans and aspirations. Hope you enjoy our interview as much as I did.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.