Clueless Bernanke Blows It Again

Before the Fed, we were on a bi-metallic standard (gold and silver). At that time bankers owned most of the gold and the people owned most of the silver, so the bankers' goal was to eliminate silver as money. The Wizard of Oz was an allegory for this. The bankers won.

During the Great Depression, the bankers stole the rest of the people's gold by confiscating it. The bankers won again.

Later, the bankers wanted to decouple the dollar from gold so they could more easily control the supply. Nixon finalized that process by defaulting on the our international gold debt. Pure paper money was born.

Today, for the first time in history all money is fiat (paper). There is no currency to run to (except gold).

The ultimate banker dream is a single global currency under their control. To make that happen, the goal is to destroy all currencies and they will present their solution: a gold backed currency for the world. The people will cheer. The bankers will silently cheer because they will have conquered the planet.
 
Quote from Hydroblunt:

Funny, cause the booms and busts prior to the Fed were associated with the First & Second Banks of U.S., a.k.a. predecessors to the Federal Reserve.

Otherwise it was just manipulations of Gold supply in order to establish the Fed via scaring the public.

Learn financial history.

P.S. JPMorgan was and may still is one of the major shareholders of the Federal Reserve.
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Dear Lord.
The crises of the post-Civil War US, to which I assume you refer in your "Otherwise.." comment, had to do with a severe deflation caused by the inevitable post Civil War contraction of credit. Check the amount by which the public debt went up as a result of that catastrophe, and you realize just how close we came to destroying ourselves with that one.
Grover Cleveland (best Prez ever, with the possible exception of GW) to his everlasting honor, refused to give in to the inflationists of his time, the silver folks referred to by Firewalker.
As to learning financial history, you must be kidding. I've never encountered the blatant paranoia, conspiracy-mongering, and outright ignorance on financial history and economics anywhere else that I see here, and I've been to quite a few places around the Internet.
Fortunately, this is counterbalanced by some amazing stuff on how to play the markets posted elsewhere, where I mostly lurk, drinking in the wisdom.
This part of ET, though, is a swamp.
 
Quote from trefoil:

As to learning financial history, you must be kidding. I've never encountered the blatant paranoia, conspiracy-mongering, and outright ignorance on financial history and economics anywhere else that I see here, and I've been to quite a few places around the Internet.
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You are right, I'll make sure to mention that to our old A.P. History teacher, as well as all the people who took the class in a PUBLIC SCHOOL.
First & Second Banks of US never existed, Andrew Jackson never spent most of his career trying to fight the central bankers and heavy money supply manipulations never occured during those periods.
To even try to bring up post-Civil war is childish. Lincoln had two choices, accept loans from the banks with 20-30% interest (wartime loans are expensive) or issue government money and print. It's a Civil War, WTF do you expect to happen at the end, a nice happy paradise with no mess to clean up?

Ironically, the best read on the topic regarding banking, money supply, inflation & deflation is a piece of work that has been in the Library of Congress for almost 3 decades. It's been posted here a few times. Yeah, a real conspiracy there, the bad evil men are really trying to hide the info from you.
 
If you omit the First and Second Banks, the 1907 crisis, and all of financial history since 1914, which you did, all you're left with, pretty much, is the crises Grover Cleveland had to deal with, which is why I posted what I did.
Unless you had something else in mind with your "Otherwise..."?
If so, please dilate. I'm quite curious.
 
The 1819 panic was caused by the heavy borrowing from the gov for the war of 1812...
As well as a contraction in the supply of gold... at the same time as the Napoleonic wars caused demand to surge... making gold unavailable in the US... a problem that the bankers "solved" by printing money out of thin air to expand credit...




The 1837 panic was caused by a 16 year credit expansion that came from the sale of federal land...


"In 1821, the country had quite recovered from its depression; and from this time on to near the end of Jackson's administration the United States saw a material prosperity, doubtless greater than any before known."


Land value in Mobile rose from $1,294,810 in 1831, to $27,482,961, in 1837

"Between 1830 and January 1, 1834, the banking capital of the United States had risen from $61,000,000 to about $200,000,000; the loans and discounts of the banks from $200,000,000 to $324,000,000;"
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The 1869 Black Friday crash was caused by speculators wanting to corner the gold market... [trying to push gold up and stock down... ]


After that, a very curious thing happen, the "long depression" a period of economic growth that was mistaken for a depresion because of the prevailing deflation.... [yes, the ohh so terrible deflation was acompained by economic growth... and mistaken for a depression... but industrial output in the US increased by 4x during the 20 year "depression"]


There's plenty to read on the subject on Wiki.

http://en.wikipedia.org/wiki/List_of_recessions
http://en.wikipedia.org/wiki/List_of_stock_market_crashes



btw... I don't think most schools teach financial or economic history... they usually stick to battle dates and presidents.






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Regarding the present day and Helicopter Benny...

The biggest monster brought to us from the fiat money system is stagflation. A wonderfull situation were not only are prices rising... production is falling... it's not possible to create in any other monetary system... and it's the result of an idiot with a money press in the middle of the depression... [such a fool must be a keynesian and a monetarist at the same time]



Is bernanke such a fool...?
 
Bernanke might be very intelligent, but he is weak and worst of all, markets know it and he will pay for it.

Even though people in general are blaming the current real estate debacle on the lowering of rates after 2001, the real culprits of this mess is the mortgage industry for coming out with products not based on sound economic principals.

Actually the guys that came out with the amazing no-doc loans, no interest payments loans, not even principal payments, should be sent to jail, not because of thievery but because of their plain stupidity. Why would a mature industry let this happen?

So that you guys get a glimpse of what the future unfortunately seems to hold picture this.

If 2 years of super low interest rates coupled with an idiotic mortgage industry created the real estate bubble, can anybody imagine the consequences the 10 yrs of Japanese ZIRP(zero interest rate policy) and unregulated hedge funds are creating and/or have created in the world? Once this worldwide financial bubble bursts, we will be looking at a minimum of 10 years of economic hangovers.

If Mr Bernanke really had balls and wanted to fix this problem fast, he wouldn't be lowering rates at a time when rates are supposed to be tightening. He would be flying to Japan, to press firmly in bringing their rates closer to other major world economies and pressing China to let go of the Yuan's US peg.

Just like we had a real estate bubble, it seems we are about to embark in a true classic 'worldwide inflation bubble' if such a term could be coined.

Possible runaway inflation at a time when the fed is still lowering rates.....what a joke...:D

Kind of the Fed trying to put out a fire in a bedroom on the second floor, not understading or seeing that the whole first floor is full of hot charcoal ready to burst.....

Hope I am wrong.....
 
Quote from Optionpro007:
If Mr Bernanke really had balls and wanted to fix this problem fast, he wouldn't be lowering rates at a time when rates are supposed to be tightening.
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So the Fed should tighten while the bond market is pricing in total apocalypse (2 year bonds) for 2008/2009? Good luck with that.

There is no inflation problem. The 10y says it all. If anything, there is deflation on the horizon. I think the Fed gets the message and will lower way into 2008, just like 2y bond futures predict.
 
Quote from makloda:

So the Fed should tighten while the bond market is pricing in total apocalypse (2 year bonds) for 2008/2009? Good luck with that.

There is no inflation problem. The 10y says it all. If anything, there is deflation on the horizon. I think the Fed gets the message and will lower way into 2008, just like 2y bond futures predict.
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emc0167l.jpg


:D :D :D
 
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