Want to lose everything you have? Bet on Ben Bernanke.
The markets were propped up again by a kick save by who else last week? The Federal Reserve AKA PPT. The markets were about to roll over last Tuesday afternoon when all of a sudden unbelievable manufacturing numbers out of China saved global equities. I don't know how this could be considering that the Chinese have basically telegraphed much higher interest rates in China over the last few months. Much better manufacturing data out of China is not necessarily good news as it portends the Jack Nicholson saying - "Its as good as its going to get." There are rumors of a very imminent rate increase in China as early as this weekend. If we see a 50BP rise in short rates global equities will fall.
In his 60 minutes interview:
http://www.cbsnews.com/video/watch/?id=7120553n
Ben Bernanke preposterously believes that Inflation is low. That is like saying my kid is doing great in school. He gets A's in Gym and Lunch, totally forgetting about the F's in Math, English, and Chemistry. This is because Bernanke and his band of thieves selectively forget the most important part of inflation which is food and energy. Just like the most important subjects in school or math and science, why worry about failing them when you are being graded on doing push ups and eating?
When Bernanke stated that he was 100% sure that he can prevent higher levels of inflation this was a sign that he had completely lost it. Only psychopaths can make this type of prediction. Let me state for the record that I am not in the hyperinflation camp, I am in the much higher inflation camp. The fact is we are beyond any type of real fix to heal or rebuild our economy. QE2 basically put this country over the cliff. Yesterdays announcement of extending the Bush era tax cuts only adds to the immense debt levels the country currently has. Adding new debt to the country is going to prolong unemployment not reduce it. Let me also say that the country is not bankrupt. We are not revenue constrained. We can always print more money but are we going to enjoy these low long term rates forever? Bonds have sold off ever since QE2 was announced. If rates spiral upwards then the jig may already be up for Bernanke. Taxes regulate our economy and balance out the reserves in the banking sector. There is simply not enough to balance and regulate. This is why the Treasury has to balance out the reserves to make up for the lost revenues via taxation.
Bernanke just doesn't get it. He either is an economic imbecile or a complete elitist psychopath. Take your pick?
His desperate attempt to have stock prices at these elevated levels is simply beyond belief. Quite simply his 60 Minutes attempt to explain himself to soft ball questions really gives us a quick look into this mans head. Guess what? There is nothing there! I am still stunned by his assertion that he can control inflation 100%. Paul Volcker must be rolling over in his grave and the mans not dead yet! The only 100% assertion in regards to Bernanke is his track record. He has been wrong 100% of the time! Why break a good losing streak? It is beyond stunning to me why people still take this guy seriously?
Lets review:
Bernanke didn't see the 2008 credit crisis coming.
Bernanke has no clue what systemic risk is.
So when he says that he is 100% sure he can control inflation, we all should sell Treasuries hand over fist and buy Gold/Silver with the proceeds. If Bernanke thinks he can control inflation then inflation is right around the corner.
In fact from the above graphic is that inflation in terms of food and energy is already here.
Wheat
Soybeans
Corn
Bernanke seems to think that there is no problem putting/keeping Barbara Eden back in the bottle but Barbara is already out of the bottle and not going back in.
So this guy has made these statements over the last five years.
1-Subprime is contained.
2-We are not going into a recession.
3-No housing bubble that is evident.
4-After housing blew up - Housing is bottoming.
5-The economy is recovering.
6-Labor market is getting better.
7-The banking sector is fundamentally sound.
8-I am 100% sure I can control inflation.
How in the world does this guy still have a job?
This guy is the ultimate MUSH!
A bet against Ben Bernanke is money in the bank.
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