| Once upon a time, the US stock market was soaring. | | | | Alan Greenspan. Not because he's less competent |
| I remember back in the late 90s when CNBC anchors | | | | than Greenspan, but simply because the Fed's facade |
| would make proclamations such as, "It's a whole new | | | | has fallen apart on Bernanke's watch. But rather than |
| market, all the rules have changed." Of course it | | | | admitting the error, correcting it, and moving |
| wasn't a new market. And the rules had not changed. | | | | forward, Bernanke and his crew are doing everything |
| What goes up must always come down-it's the | | | | they can do to get the economy back in an |
| nature of economic cycles. During upswings in the | | | | inflationary position, perpetuating the myth that |
| cycle, some people start to believe that the rules of | | | | inflation is good and the nation's economy must |
| nature have changed and that they are somehow | | | | always be inflating. |
| impervious to the natural cycles of economics. Of | | | | Bernanke's actions have caused great alarm and have |
| course this inevitably leads to bust, and the whole | | | | created an uproar of protests-people demanding that |
| boom-bust cycle completes again-a cycle most | | | | Congress audit the Fed. What many Americans do |
| Americans are all too familiar with these days. | | | | not realize is the Federal Reserve answers to no one! |
| One person who has been credited for the boom, | | | | They are their own boss. Sure, they report to |
| and in some cases credited for the bust, is the | | | | Congress once a month, but Congress can't make |
| Federal Reserve Chairman. During the 90s some | | | | them do anything. All Congress could do is to strip |
| people said the Fed Chairman at that time, Alan | | | | them of their power to make monetary policy. And |
| Greenspan, held more power than the president! No | | | | Bernanke knows that. So currently, while many in |
| one seemed to cared who President Clinton was jet | | | | Congress are calling for an audit of the Fed, Bernanke |
| setting around the world with on Air Force One. But | | | | knows if he can keep them out of the books, no |
| when Greenspan spoke, the entire financial world | | | | one can stop his powerful reign. |
| stopped and listened. Why? The Fed sets monetary | | | | The question many are asking is, "Does Bernanke |
| policy, and more specifically, they affect interest | | | | even know what's going on?" But the TRUE question |
| rates. | | | | that needs to be answered is, "Why is Bernanke |
| In the world of Central Banking, interest rates are | | | | allowed to implement his policy?" Very few people, |
| used to slow down inflation. It is their primary tool. | | | | including Congress, realize that back in 2002, before |
| When the economy looks to be inflating, the Fed will | | | | Bernanke was even considered to be the Chairman |
| raise interest rates. This causes a slow down in | | | | of the Fed, brilliant Ben announced his own policy for |
| borrowing, and thus a slow down in spending. The | | | | staving off deflation. In his own words: |
| net effect is a slow down in inflation. If, however, | | | | "Like gold, U.S. dollars have value only to the extent |
| the economy is moving too slowly, the Fed believes | | | | that they are strictly limited in supply. But the U.S. |
| its job is to lower interest rates. Lower rates tend to | | | | government has a technology, called a printing press |
| cause people to borrow more money and then spend | | | | (or, today, its electronic equivalent), that allows it to |
| it. This spurs the economy on. | | | | produce as many U.S. dollars as it wishes at |
| This policy has worked relatively well for the past 80 | | | | essentially no cost. By increasing the number of U.S. |
| years. In fact if you ask the Federal Reserve, they | | | | dollars in circulation, or even by credibly threatening |
| have masterfully engineered the US economy for the | | | | to do so, the U.S. government can also reduce the |
| past 80 years, and it is their success that has kept | | | | value of a dollar in terms of goods and services, |
| us from another depression like we experienced in | | | | which is equivalent to raising the prices in dollars of |
| the 1930s. | | | | those goods and services. We conclude that, under a |
| The problem with this Fed position is, like the people | | | | paper-money system, a determined government can |
| trading the market who believe they are impervious | | | | always generate higher spending and hence positive |
| to economic cycles and believe the market will | | | | inflation." (Read The Speech, given 11/22/02) |
| always go up, the Fed also believes they are | | | | That's right, if you didn't catch it, Bernanke's magical |
| impervious to economic cycles. But their cycle is | | | | plan to prevent deflation is to intentionally print dollars |
| different. It's not that they believe the market will | | | | until they are worth less and force an inflationary |
| always go up, but rather they believe credit will | | | | condition. Most people would call this policy "nut job." |
| always be available. | | | | But Ben Bernanke thinks it's brilliant! That's his brilliant |
| The Federal Reserve has built their entire machine on | | | | plan! In his speech quoted above, Bernanke goes on |
| the premise that people will always want to borrow | | | | to explain why current law prevents the Fed from |
| money. So their magic lever to control the machine is | | | | actually implementing some of their actions, but they |
| that of interest rates. What the news does not | | | | have created some workarounds to make sure they |
| report is the very reality of the current economic | | | | can sufficiently "inject money into the system." |
| trouble-the reality the Fed is all too aware of but | | | | In other words, it is Bernanke's goal to solve this |
| afraid to admit. The reality is that this crisis is the | | | | crisis by printing money. And even when the law |
| result of too much credit. And the Fed is afraid to | | | | does prevent him from doing certain things, he has |
| admit it because without credit, their machine is | | | | devised some workarounds, including the purchase of |
| broken! | | | | private assets, which we have already seen! If |
| After the housing bubble burst, the Fed aggressively | | | | anyone thinks Ben Bernanke is working his magic, |
| began lowering interest rates in an attempt to get | | | | they should think again. He's working his plan. And his |
| people to borrow money. The problem? People didn't | | | | plan is destined to debase our currency to the point |
| want to borrow any more money! Why? Well, people | | | | where it is absolutely worthless. |
| have become tired of paying more in debt than they | | | | The good news is, I'm not the only lone ranger |
| can afford. Eventually they are forced into | | | | sounding the alarm. Over 300 House members have |
| foreclosure and bankruptcy. So no matter how low | | | | signed on to a bill to audit the Fed. Check out this |
| the Fed drops interest rates, they still cannot | | | | video played on the Glenn Beck show recently of |
| convince those people to take on more debt! And it | | | | Democratic Congressman Grayson in discussions with |
| is for this reason that the Federal Reserve is | | | | Bernanke over the actions of the Fed. |
| scrambling to keep the facade going that they truly | | | | Watch The Video Here |
| have everything under control. | | | | When both Democrats and Republicans are up in |
| The truth about this crisis, the one no one wants to | | | | arms, it's clear . . . Houston, we have a problem. But |
| admit or talk about, is the reality that instead of | | | | Congressman Barney Frank? Well, he likes Bernanke |
| being in a state of monetary inflation (what the Fed | | | | for some crazy reason, and he will not let the bill |
| believes will always happen), we are in a state of | | | | come to the floor for a vote. Oh, don't you love |
| monetary deflation! It's the opposite of inflation. | | | | power trips? |
| Deflation is when prices fall because the supply of | | | | Well, friends, I believe it is clear. It's time the people |
| money has contracted, or become smaller. Deflation | | | | of this country begin to stand up and make our own |
| is evidenced in our economy by falling housing prices, | | | | statements about the Federal Reserve. It's time to |
| falling car prices, and even falling wages. While most | | | | Audit the Fed! Ben Bernanke answers to nobody. |
| people have not been forced to work for less, many | | | | And his clearly stated intention is to debase the |
| people have been forced to take unpaid vacations. | | | | currency and make it worthless so the Fed can |
| This is a form of wage-related deflation. | | | | attempt to save face and keep their game going of |
| And this brings us full circle back to the Fed. The | | | | controlling the US economy by playing with inflation. |
| current Fed Chairman is Ben Bernanke. Bernanke is | | | | Not only is it wrong, but it is incredibly dangerous. We |
| not enjoying the same popularity as his predecessor, | | | | must stand up and demand accountability! |