Bernanke is a liar and a money printer

I first heard the "liar and money printer" from Marc Faber. He wasn't speaking about Bernanke personally, what he said was "all bankers are liars and all central bankers are liars and money printers." After watching, listening to Bernanke these last few years, I have to agree with Faber. Bernanke's speech this morning hints at more money printing. As this is being done, fingers continue to be pointed at China for "currency manipulation." And what is more printing from Bernanke but currency manipulation?


Anna Schwartz: Bernanke is fighting the last war..

Published two years ago in the WSJ. Probaly the best article I've read on this subject.

"This was [his] claim to be worthy of running the Fed," she says. He was "familiar with history. He knew what had been done." But perhaps this is actually Mr. Bernanke's biggest problem. Today's crisis isn't a replay of the problem in the 1930s, but our central bankers have responded by using the tools they should have used then. They are fighting the last war.


Donate $3 and register to win a trip to Vegas to meet the President? Michelle Obama thankful for clean spirits around her?

Please donate $3 or more to be automatically entered to win a trip to Las Vegas to meet me backstage:


I hope to see you out there,

President Barack Obama

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and: "..people who are keeping the spirits clean around us," First Lady Michelle Obama said

also: Obama “there’s no such thing as shovel-ready projects”

finally: Obama’s approval rating fell to a new low of 43 percent since he took office, down from 47 percent last month, according to a Reuters-Ipsos national poll.
Ipsos pollsters say it appears that much of that drop comes from Democrats whose approval of Obama fell to 70 percent from 78 percent last month.

Fatboy here. That 70% approval among democrats probably has Brand Obama very concerned.

p.s. Fatboy voted for Obama

What does that have to do with the price of anchovies in Peru?

I know there’s the myth of the autonomous Fed… [short laugh] and when you go up for confirmation some Senator may ask you about your friendship with the President. Appearances are going to be important, so you can call Ehrlichman to get messages to me, and he’ll call you.
Richard Nixon to Arthur Burns

Arthur Burns. Born April 27, 1904. Died June 6, 1987. Chairman of the Federal Reserve from 1970 to 1978. Nominated to the post of Fed Chairman by a criminal, Dick Nixon. Birds of a feather flock together. After Burns was sworn in, Dick Nixon told the assembled crowd of leering, drooling pigmen "I respect his independence. However, I hope that independently he will conclude that my views are the ones that should be followed." The crowd of pigmen then cheered "You see, Dr. Burns, that is a standing vote for lower interest rates and more money."

Back in the early 1970s, when both energy and food prices were soaring, Burns needed a lower measure of inflation so that he could justify not pushing interest rates as high as they should have been. When oil prices surged in 1973-74,  Burns asked the Fed's economists to strip out energy from the consumer-price index (CPI). to get a “less distorted measure of inflation.” Unfortunately, they couldn’t stop with just oil - food prices were stripped out too,  Burns claimed the disappearance of anchovies off the coast of Peru was the cause of food inflation, and beyond the Fed’s jurisdiction, followed by used cars, children's toys, jewelry, housing and so on, until about half the costs consumers battled in their daily struggle with rising prices.

Subsequent administrations continued to tinker with inflation calculations, in ever more creative ways. In 1983, the BLS decided that “owner equivalent rent” was a better way to measure the housing-cost component of the Consumer Price Index, replacing the actual cost of owning a home with an estimate of what the house might cost to rent. Their justification being: "The owner's equivalent rent index measures the change in the rental income foregone by a household that chooses to occupy a dwelling that it owns. This measure is used because the alternative of measuring acquisition costs of residences is conceptually inappropriate for the CPI. The CPI tracks the change in the cost of living, that is, in the cost of current consumption. Yet investment considerations play a large role in acquisitions of residences. Moreover, unlike money spent on items that do not hold their value, money that is spent to acquire a residence is not "gone" in the sense that it cannot be reclaimed. Money spent on a residence usually can be recovered - often with a profit - by selling".

A full rebuttal can be found at http://caps.fool.com/blogs/the-bea-pretends-stupider-than/35057

Sentence #1. The owner's equivalent rent index measures the change in the rental income foregone by a household that chooses to occupy a dwelling that it owns. This sentence, restated in plain English, takes us to the never-never land of would-be incomes and would-be economic activities - things that a statistician worth his salt should never even consider.   The world of lost opportunities is always endless.

The manipulation of statistics, numbers and data to serve political ends is non-partisan. This is used to enhance GDP and mask inflation among other ends. The masking of inflation is then used not only as Burns did and Bernanke is doing now by keeping rates artificially low, but also for not raising cost of living allowances to retirees and others. For the second year in a row, there won’t be a cost of living adjustment (COLA) for Social Security. So seniors, savers earning 1% on their CD's will now see another year of no COLA. But the banks are healthy borrowing taxpayer money at zero, buying US debt for a few percent more then selling that same debt back to the Federal Reserve for another loan at 0% to buy more US debt. Wash, rinse and repeat. No job growth. No wage growth.


Why do Mexican gangs behead people?

See also: http://fatboysez.blogspot.com/2011/09/no-history-of-beheadings-in-mexico.html

When these beheadings first started south of the border, I read that it was linked to Mexicans returning from fighting for the US in Iraq and Afghanistan. Not sure how valid that is but it is a new phenomenon that continues. The latest being the beheading of the Mexican police commander presumed to be investigating the reported pirate attack against David Michael Hartley on Falcon Lake:


Three people found decapitated in Culiacan


Tijuana .- Six people were killed in the last few hours in Tijuana and two were beheaded and hung from a bridge, officials said.

All these incidents were reported today. Mexico, no longer the sleepy country south of the border

Why can't we do this in the US?

"Sarko, you're screwed, the young are on the streets,"


Show me the paper


Death of Bretton Woods 2?

One hobby of mine is to find, read books and papers on economic or social theory that are five, ten or twenty years old. It gives a good insight to the authors ability to discern the future or future trends and whether or not to read their more current works. Three examples would be:

Unholy Wars written by John K. Cooley published in 1999. Has a picture of Bin Ladin on the front.

The Fourth Turning by Strauss and Howe. Published in 1997. Chapter ten is prescient.

Last and least, Yen!  Japan's new financial empire and its threat to America!  by Daniel Burstein. Published in 1990. First paragraph of Yen! "November 2004. America, battered by astronomical debts and reeling from prolonged economic decline, is gripped by a new and grave economic crisis. Like all  such events, the causes are multiple and complex. But the president-elect and the voters who chose him by a landslide see only a single cause and a single culprit for America's problems: the Japanese."
 In fairness to Mr. Burstein, he wasn't that far off. Add an election cycle or two, change Japan to China, yen to yuan and poof! He'd be a guru.

Five year old paper from Roubini and Setser. One who I can tolerate, the other I detest. I'm barely into it but I find it interesting so far. Fifty five pages:

How to create an American job

Great article by Andy Grove from last summer. When a billionaire calls for changes that would cost him money, I listen



Albino body parts are sold for hundreds and sometimes thousands of dollars in parts of Africa
Thousands of albinos are estimated to live in hiding.


Rampant foreclosure fraud

Best post I've read on this issue.


CSPAN video on currency wars

Desmond Lachman of the AEI makes some good points Video approx. 43 minutes


more currency wars mumbo jumbo

Consider the enormity of the situation at hand.  The Federal Reserve is poised to crank up the printing press for the sake of satisfying their domestic mandate.  One mechanism, perhaps the only mechanism, by which we can expect meaningful, sustained reversal from the current set of imbalances is via a significant depreciation of the dollar.  The rest of the world appears prepared to fight the Fed because they know no other path


Good morning. Very good article on currency wars.

Currency – The Weapon of Choice in Trade Wars in a World of Lower Demand

and this:

The atomic bomb, of course, is quantitative easing by the Federal Reserve. America has in effect issued an ultimatum to China and G20: either you stop this predatory behaviour and agree to some formula for global rebalancing, or we will deploy QE2 `a l’outrance’ to flood your economies with excess liquidity. We will cause you to overheat and drive up your wage costs. We will impose a de facto currency revaluation by more brutal and disruptive means, and there is little you can do to stop it. Pick your poison.

 and something on China's options regarding their holdings of US debt



China or the US are currency manipulators?

Many politicians are pointing fingers at China accusing them of keeping their currency under valued and therefore making their exports artificially cheap. Obama and Little Timmy Geithner have also made these claims. But are they true?

In a way, yes they are true. China doesn't allow their currency to float vs. other currencies and allow the free markets (which aren't free or markets) to set an exchange rate. Why doesn't China allow this? If China did allow their currency to float, the Federal Reserve and the US treasury would purchase massive amounts of the Chinese yuan and loan massive amounts of taxpayer dollars or printed US dollars to Wall St. IB's to buy more yuan. This would cause the value of the yuan to skyrocket. Thus increasing the costs of Chinese exports to US consumers. Many state this will create jobs in the US. It would create a few jobs but not many at all. US manufacturing has been hollowed out these last forty years. From textiles to electronics to automobiles. If the yuan would float, appreciate vs. the dollar, sock factories, T-shirt shops and other low value manufacturers would not sprout up in the US. Cambodia, Bangladesh and Vietnam would see jobs increase, not the US.

US taxpayers owe China over $1 trillion in treasury, bond and dollar holdings. By increasing the value of the yuan, US debt is decreased by that same amount. Good idea you say? Maybe, maybe not. What if China says enough of this and sells their US debt holdings causing interest rates to ramp up? If that would occur it would be an ominous sign due to the fact the US has such massive amounts of debt that any significant run up in interest rates would be devastating to the US. The money needed to service the debt would cause tax increases and cuts to all expenses even military.

The US has the privilege of possessing the world's sole reserve currency. This has been in place for over sixty years. This affords the US a constant, built in market for their debt. Dollars are always in demand. A nation buys oil from OPEC it pays in US dollars. Majority of finance trade deals are settled in US dollars. This privilege earns the US approx. $5-800 billion per year depending on how you look at it. Basically paying for the entire defense budget minus Iraq/Afghanistan wars. When, not if the US loses this privilege the US taxpayers will pay.

Quantitative or credit easing, QE 1 and soon to be QE 2 is nothing more than currency manipulation. The same thing the US accuses China of doing, it does in spades. As does Japan without  a global uproar. It is money printing in the electronic age. Instead of physically printing the money, entries are made in a computer and Poof! mo money, mo money, mo money! The US money supply is increased, doubled or even tripled from a few years ago. Who gets this money? I assure you it's not me or you, it's Wall St, the IB's and the Primary dealers of US debt. The Treasury issues, sells debt to the markets. The Fed then comes behind these "auctions" and buys this debt back with freshly electronically printed greenbacks. This is done by the Fed to create jobs. I'm serious, that's what they claim. But we all know this isn't happening. This free money is being used to increase stock prices, commodity prices, asset prices as a whole. Been grocery shopping lately? Thank Ben Bernanke for increase in prices.

I'm just a layman with a layman's understanding of very complex issues. But, I also am an information junkie that has spent hundred's, thousand's of hours reading, researching these complex issues. My aim is to attempt to explain these issues in straight forward and simple terms. I very much encourage you, my reader to follow through with your own research. Click on the provided links for much more information. Google is your friend. TPTB, the elites, and the establishment democrat and republican parties are not your friend.

I'm going to go get something to eat. I'm hungry. Thank you loyal readers.