Bernanke's Lies

Wasn't it just some 17 months ago that Ben Bernanke told all of us that the "Federal Reserve Will Not Monetize Debt."


http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agmj05AcqWHo


“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,” Bernanke said in testimony to lawmakers today. “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.” He said the Fed won’t finance government spending over the long term, while warning that the financial industry remains under stress and the credit crunch continues to limit spending. “Either cuts in spending or increases in taxes will be necessary to stabilize the fiscal situation,” Bernanke said in response to a question. “The Federal Reserve will not monetize the debt.”


Well! We all know that was BullSh&*^T!


Just like TARP, FASB, TLGP, HAMP, ZIRP, and the latest round of QE, what Wall Street demands! Wall Street gets.


The last bastions of Democracy is a free press and yesterday we had Dallas Fed Head Richard Fisher basically calling out Bernanke's lies.


http://dallasfed.org/news/speeches/fisher/2010/fs101108.cfm


"The Federal Reserve will buy $110 billion a month in Treasuries, an amount that, annualized, represents the projected deficit of the federal government for next year. For the next eight months, the nation’s central bank will be monetizing the federal debt."


“The remedy for what ails the economy is, in my view, in the hands of the fiscal and regulatory authorities, not the Fed. I could not state with conviction that purchasing another several hundred billion dollars of Treasuries—on top of the amount we were already committed to buy in order to compensate for the run-off in our $1.25 trillion portfolio of mortgage-backed securities—would lead to job creation and final-demand-spurring behavior. But I could envision such action would lead to a declining dollar, encourage further speculation, provoke commodity hoarding, accelerate the transfer of wealth from the deliberate saver and the unfortunate, and possibly place at risk the stature and independence of the Fed.”


Richard Fisher hits it right on the nose. SWISH!


QE is just a continuation of failed polices enacted by the Fed for the benefit of the Banking Sector. The Banking Sector pushed by Wall Street wants an economy that is 100% finanialized, an economy that is not regulated, where perverse incentives are created. They want to create an environment where dangerous financial products that cause market distortions can breed and live. After everything blows up they have the Fed and the Taxpayer to clean it all up. This type of policy only emboldens the imprudent and miss allocates resources to unproductive parts of the economy.


Richard Fisher along with Tom Hoenig are one of the few Fed officials who have any clue about risk management and monetary policy. Fisher is not a voting member but Hoenig is.


Mr. Fisher speech is full of accurate information. Although he is quite idealistic when he states this:


"Otherwise, the effect of quantitative easing will, in my view, simply result in financial speculation, further investment in more welcoming quarters abroad and, ultimately, in “super ordinary” inflation. The FOMC is taking a calculated risk. If the Congress and the Executive fail to deliver, I believe the FOMC will have to consider changing course. Here is the message: The Fed is going out of its way to be a good citizen. It is time for the Congress to do the same."


Congress is owned by the financial sector. Case closed!


Back to Bernanke. This is further evidence that Bernanke can't be trusted to lead monetary policy. He should , if he has any self respect left resign immediately for his lies and treason against the American public. If this traitor keeps perpetuating this Wall Street created farcical ponzy scheme he should be impeached from his post and tried for treason.


This next point I am not overstating.
He is no different than Timothy McVeigh.