Tuesday, February 15, 2011

The Fed Must be Stopped

Busy week so I haven't had time to write.  I'll be honest here, I am glad I have been busy because I am disgusted by everything that I see and read recently.  The budget was a complete joke today. 

The unravelling of the Middle East is startling even though it should have been predictable for anyone that understands basic economics and inflation.

It's getting hard to continue to write about what I am witnessing.  The housing sentiment among builders remained at near all time lows.  Consumer spending came in at +.3 versus expectations of +.6. 

It's all unwinding all at once once, and yet our POMO pumped stock market fails to see the oncoming trainwreck.  The next 401k disaster for J6P is right around the corner as he gets caught holding the bag once again after getting sucked into the market for a 3rd time in 11 years.

It's so easy to see if you looked at the fundamentals.  However,  the greed of the bulls after a 100% rally is too strong for them to stop.  The bulls are now stampeding with huge blinders on as they become obsessed with taking the DOW up to all time highs.

If they would only stop for a second and look around they would save themselves a hell of a lot of money.

Must Read...

I  wanted to post this great article from Marketwatch's Paul Farrell before I wrap it up.

Folks, when stuff like this starts hitting the main stream media it's time to take notice.  The Fed will not stop until they run us straight into a wall and it's time for us all to take notice and stop them before it's too late.

Please click on this link to read the rest of the article.  We need to continue to keep the pressure on these thugs until they stop their easy money policies.  I don't know about you, but I have ZERO desire to watch this country turn into another Egypt.

This is right where we are heading if the Fed isn't stopped.

Enjoy the read:

"ARROYO GRANDE, Calif. (MarketWatch) — Fed boss Ben Bernanke is the most dangerous human on earth, far more dangerous than Hosni Mubarak, Egypt’s 30-year dictator, ever was. Bernanke rules a monetary dictatorship that will trigger the coming third meltdown of the 21st century.

Just as Mubarak was blind to the economic needs of the masses and democratic reforms, Bernanke is blind to the easy-money legacy that’s set the stage for revolution, turning the rich into super rich while the middle class stagnates and peanuts trickle down to the poor.

Warning, Egypt also had a huge wealth gap before its revolution. Bernanke is the final egomaniac in America’s bubbling 30-year wealth gap, where the top 1% went from owning 9% of America’s wealth to owning 23% during this dictatorship.

Bernanke’s ruling ideology is the culmination of a 30-year economic war that has forged together Reaganomics for the super rich, former Fed chairman Alan Greenspan’s toxic allegiance to Wall Street, the extreme Ayn Rand’s capitalist dogma, culminating in the toxic bailouts of Treasury Secretaries Hank Paulson and Tim Geithner, two Wall Street Trojan Horses corrupting government from within.

Since 1981 this monetary dictatorship has caused enormous collateral damage, systematically sabotaging democracy, capitalism and the American dream while fueling the rise of our most dangerous new enemy, China. See “Secret China war plan: trillions in U.S. debt.”

When Obama reappointed Bernanke a couple years ago, “Black Swan’s” Nicholas Taleb was “stunned.” Bernanke “doesn’t even know that he doesn’t understand how things work,” that Bernanke’s economic methods are so inadequate they make “homeopath and alternative healers look empirical and scientific.”

We called Bernanke, the “Captain of the Titanic,” warning that he was setting up the third meltdown of the 21st century, predicted by “Irrational Exuberance’s” Robert Shiller, a coming crash worse than the 2000 dot-com crash and the subprime credit meltdown of 2008 combined. See “Capt. Bernanke sinks the U.S.S. Titanic.”

Inside the Fed: Cassandras, Chicken Littles, governors crying wolf

Unfortunately, as with Egypt’s dictator, the 30-year dictatorship now headed by Bernanke must end soon: And this class war will not be pretty. But it is no black swan; no one can claim they didn’t see a new crash coming.

For several years before the 2008 meltdown we reported on money managers, economists and financial gurus warning of a coming meltdown. They included two Fed governors who warned Greenspan in the early Bush years. And yet, as late as summer 2008 Bernanke, Paulson and Greenspan were systematically dismissing mounting evidence of a mega crash dead ahead.

That’s why Time magazine’s cover story about Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, grabbed me. David Von Drehle’s “The Man Who Said No to Easy Money” is a warning to all America.

Like Ed Gramlich and William Poole, the two Fed Governors who warned Greenspan during the Bush years, Hoenig regularly dissented from Bernanke’s easy-money policies that have been favored by Wall Street throughout this 30-year dictatorship.

We’re paraphrasing Drehle’s interview with Hoenig as 10 warnings because it brilliantly reveals the broader historical tragedy of the Fed’s 30-year monetary dictatorship driving America to the edge of another 1930s economic revolution, one that will be triggered by a repeat of the 1929 wake-up call.

1. Commodity price inflation will soon end the Fed dictatorship

Hoenig consistently “cast his lonely ballot against the indefinite reign of easy money. Eight meetings, eight no votes … an unyielding point of view, one that has become ever more relevant now that rising commodity prices have put inflation worries back on the economic radar screen.”

In short, global commodity inflation may soon do what Hoenig could not, put an end to America’s self-destructive easy money reign of economic terror, and more importantly finally end the Fed’s 30-year “monetary dictatorship.”

Again, please click here to continue.

2 comments:

getyourselfconnected said...

Great piece on the FED. I agree with the whole thing but what will the brick wall be? Those suckers are clever if nothing else.

Jeff said...

Inflation my friend.

It's already started. The I genie is already out of the bottle. There is no stopping it without raising rates.

Political turmoil will follow and it doesn't have to start here in the USA.

If they are able to keep the the pieces together then we will see an outright demand collapse as prices rise to unaffordable levels.

Fall 2008 was the delayed impact of $140 oil. The credit market collapse was only part of the story.