Yes, he held a press conference. Why would the world want a press conference from a central banker? Ah…good question. Because he’s a celebrity… He’s powerful. He moves and he shakes. He’s as popular as William and Kate put together.
In the past, a central banker was meant to be anonymous…quiet…hidden away somewhere so far in the background that the ordinary man wouldn’t know his name or recognize his face.
A good central banker was one you never heard of. He did his job. He made sure that the country had enough gold to cover its foreign debts and domestic currency issuance. He did not worry about full employment. Nor did he concern himself with “growth.” His job was to make sure the money was good. That’s all. If he did it well, he was practically a nobody.
If he did it badly, on the other hand, he might be castrated. Or, at least he would be disgraced.
Times have changed. Alan Greenspan turned central bankers into celebrities. He stood with Hillary Clinton at her husband’s State of the Union address…thus signifying the union of money and power, much like the Pope and the Holy Roman Emperor standing together on the balcony of the Vatican.
And now, who wouldn’t recognize Ben Bernanke’s mug?
In fact, he is widely thought to be responsible for saving Christendom, Jewry and all of western civilization. Yes, he stepped in where fools feared to tread – and rescued the whole shebang.
And now what?
Well, the rescue effort has proven to be a big failure. TARP, TALF, QE1, QE2… The US feds put at risk more than $10 trillion to turn the situation around. Federal deficits alone add up to $4.5 trillion over the last 3 years.
And for what? Housing is still falling. The unemployment rate is still over 10%…unless you stop counting people who haven’t been able to find work. More than 40 million people are on food stamps. And every increase in gasoline or food pinches household budgets like a tax increase.
But now, not only does the central banker play a much bigger role in the life of a modern economy, so does the government. A report earlier this week told us that more than half of “income growth” in the last 10 years comes from the feds!
Wait a minute. Where does government get any money? How can the feds give more than half US households more than half their income gains? Who pays for it?
Doesn’t that money really belong to someone else? Aren’t they just robbing Peter to pay Paul?
Yes, Of course they are. But Peter isn’t old enough to vote. So who cares?
And now The Fiscal Times reports that US voters – as a whole – receive more in payments from the government than they pay in taxes.
The feds have turned half the population into incipient zombies…feeding off the other half of the population…and their children…and their children’s children.
But let’s get back to Bernanke. What did he have to say yesterday? Well…nothing!
Here’s the AP report:
WASHINGTON (AP) – The US economy and job creation have strengthened enough for the Federal Reserve to end on schedule a program of buying Treasury bonds to help the economy, the Fed said Wednesday.
Fed Chairman Ben Bernanke spoke at a news conference after the meeting. It was the first time in the Fed’s 98-year history that a chairman has begun holding regular sessions with reporters.
Bernanke said that as long as the Fed continues to say rates will remain at historic lows for “an extended period,” rates won’t rise until the Fed has met at least twice more. The Fed board meets about every six weeks.
Bernanke said he expects the economy to continue growing through next year and 2013.
He acknowledged that higher gasoline prices are creating a financial hardship for many Americans. But he said the Fed doesn’t think gas prices will continue to rise at their recent pace.
With Bernanke’s dulcet assurances still echoing in their ears, investors went back to their errors. They bought more stocks – pushing the Dow up 93 points. They bought more gold too. The yellow metal rose $13.
One thing they didn’t buy was the dollar. The greenback is at an all-time low against the Swiss franc. Against the euro, it seems to be returning to its all-time low. And against gold, of course, it passed its all time low many months ago.
And now that the economy is slowly but surely recovering – Bernanke said so! – many investors are beginning to wonder if gold may have passed its all time high too.
Let’s hope people believe it.
The more who think so, the better. Yes…sell gold…please! Sell it in a panic. Sell it cheap. Sell it to the rag and bone man! Sell it to the pawnshop! Sell it at parties organized by newspaper ads! Sell it to people who put notices on eBay! Sell…sell…sell…
And then, you know what to do, don’t you, dear reader?
for The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America's most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.
Any tips on how to be a Bill Bonner Groupie Celebrity?
Or tips on how my own couple of Groupies on this board can be celebrities?
I suspect Bernanke’s plan all along has been to create enough inflation to make the average mortgage payment seem more managable. Problem is, every cent force fed into the economy gets skimmed off by the banks and corporations. The 2% reduction in social securiy payroll taxes? Just another excuse for corporate America to stiff their employees on wage increases since in their view the employees have already received a 2% raise this year. Personally, I don’t think our friend Mr. bernanke will really understand the folly of his endevour until his wife leaves him for a wealthier man, presumably a man with gold in his pockets.
There bound to be some administrative hurdles. There is no shortage of female central bankers around. How are you going to castrated them?
Uncle Sam’s nuclear-economic umbrella is the greatest prized asset globally. I wish to own one and keep it at home if current climate permits.
On a sunny day, in walkways, parks, supermarts, sidewalks, public venues; it is not uncommon to find zombies holding an umbrella despite of the adorable sky. What the hell on earth zombies need an umbrella that possesses nuclear and economic capabilities under fine weather condition???
I did, once tried to borrow the umbrella from Uncle Sam on a day that was raining dog and cat, thinking that the umbrella with the nuclear ability would have given me extra cover. To my astonishment, I was flatly turned down for not fulfilling the onerous part of paper and administrative procedures. Out of desperation, I bought an ordinary oil-paper umbrella made in China to shield the menacing rain. To date, I am still in doubt of any fallout that has damaged my brain.
Under the umbrella with both nuclear and economic capabilities the zombies are energised with the quantum scalar energy.
I am afraid that the energised and ill-ideologized zombies would rob both Paul and Peter to pay themselves.
Any ABCdom could exist in the presence of any XYZdom. I don’t see a reason to demolish an XYZdom at any cost of money or ethical values in assuring the survivorship of ABCdom. Unless, in particular that XYZdom is forever evil threatening.
Sincerely, I wish Uncle Sam would keep both eyes wide open and discerning for the zombies could be rampant under the unique umbrella.
What the HELL did you just say, Smiler?
I’ve been in the wrong business my whole life. I figured nothing was as boring as central banking, but the celebrity status would have made it worth it.
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