Washington Rewarding All of the Characters That Encouraged the Financial Crisis

[Crewleader]

by Peter Schiff

Ayn Rand wrote,
"when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."

America is not doomed, but the fellows in Washington are pushing for that outcome. It seems that all the characters that encouraged this financial crisis are being rewarded, and Ben Bernanke's re-nomination is no exception to this rule. He was on the Board of Governors when Alan Greenspan grew our bubble economy. Known as 'Helicopter Ben,' Bernanke was the most vocal supporter of low interest rates to combat the bogus threat of deflation, even if it meant dropping cash from helicopters. He succeeded in his aim – as it is hard for prices to decline while the money supply is growing by double digits.

Of course, much of that new money went into speculative bubbles, first in tech and then real estate. When the misallocation became too great to ignore, the credit markets froze and leveraged institutions started failing. Now, Bernanke says that he doesn't want to preside over another Great Depression. That doesn't mean he doesn't want another Great Depression; he just doesn't want to preside over it. His plan seems to be continuing to print money so that the depression isn't apparent until after he leaves office. However, while Greenspan was able to get out of Dodge, Bernanke will probably not be so lucky, as his reappointment virtually guarantees that he will be in the middle of the action when the bullets start to fly. Left to clean up his own mess, Bernanke will soon regret not quitting while the going was good.

Bernanke is being praised for avoiding a collapse in the financial system. While he has forestalled some short-term pain, he has in turn forsaken long-term gain. The 'green shoots' that set the pundits alight are nothing more than the direct effects of massive monetary expansion. What we have is nominal growth in the unproductive service and consumption sectors. In short, Bernanke is being praised by the drug addicts for not cutting them off. But the thing about addiction is that the longer you stay hooked, the more deadly the withdrawal.

http://www.marketoracle.co.uk/Article13030.html

[wuvuj]

1. They have things right where they wanted them?

Private equity will be buying up discounted banks...real estate...companies...etc. The top 1-5% have some good pickin's?

[notesdev]

2. No need to pick

when you have it all.

I'm getting real tired of my representatives representing THEM and not US.

[tama]

3. The thing about addiction

is that you need constantly bigger doses to get the effects. Last fiscal year a trillion more debt. This fiscal year couple trillions more. Next year four trillions or who knows... and many states are allready bankrupt, e.g. California.

And one thing about injecting bigger and bigger doses is that you play with the LD50 levels, and then some.

[truedelphi]

4. Money that the banksters had to play with

Allowed for a bunch of nefarious commodity buys.

Price of grain was driven up; price of milk driven down. Small family dairy farms out of business, while the large non-ecological firms can borrow from their parent company and ride out this storm. Then go in and rake in Big Bucks as they have no competition.

And the consumer, who is the one pinched and fleeced for the dough that brought about this wave of commodity buys, will feel a further pinch in the coming high prices.

But hey - Bernanke will be drinking all the cream he wants for the next four years.