The title of this piece is a direct copy from Drudgereport and can be read here at the Financial Times here:
“Good” for the global economy huh? Is it also good for the Dollar “reserves” that these countries were CONNED into accumulating? Can Bernanke really believe his own bull$#%@? Or is he lying and trying to cover up the fact that he has no other choices? I really hope that he lying because how scary would it be if the single most powerful “money man” in the world turned out to be an idiot?
For Bernanke to actually say that what they are doing is “good” as opposed to “necessary” is in itself quite scary. The Fed has created copious amounts of new money and credit in a system that has not grown in the 4 years since they started outright monetizing. This alone tells you that each new Dollar created which is theoretically “backed” by the economy and its output is worth less and LESS than previous Dollars issued.
Were any other country in a “normal” world try to pull this off, their interest rates would be be jacked up and their currency trashed, this is simple math and economics. However, the U.S. Dollar is the reserve currency of the planet which allows the Fed and Treasury to abuse their privileges… until they can’t. Let me explain, we have followed a policy or “competition” if you will of “beggar thy neighbor.” Every country, in order to be able to compete MUST ease credit and lower rates at least in line with the U.S. or face watching their exports decline. It is a race to the bottomless pit of worthless currencies. No one can afford to have a “strong” currency relative to their trading partners or they will implode their export and manufacturing sector.
For Bernanke to say that “It is not clear that QE is bad for emerging economies” is just downright wrong and ignorant. Maybe he thinks that the rest of the world is as stupid as Americans are when it comes to economics? (They are not as evidenced by $1,750 Gold) U.S. QE and monetization on its own is a recipe for hyperinflation, when you force the rest of the world to follow suit, hyperinflation becomes a guaranteed outcome. Bernanke is the “head” banker for the entire world and has control over the reserve currency, for him to be either so misleading or so stupid is not something that instills confidence in any quarter. The danger is that “confidence” is what it’s all about. Confidence is all that we have left. Confidence is everything when real “value” is nothing.
I want to briefly revisit a subject which I wrote about over the weekend. We have been “warned” that a cyber attack on our banking system may be imminent. Forget about markets going up and down, or inflation, deflation, interest rate levels or commodity prices. Now, we have to worry about going to sleep and waking up with a banking system telling us “uhh, we’re sorry but our computers were compromised and everything was ‘zeroed’ out. We would like to re credit the accounts but all data was lost so starting in 2 weeks, the banks will reopen and we’ll all have to start over again. Sorry for the inconvenience”.
This type of scenario fits like a glove to a system that needs to be re set, rebooted and redone with a new currency system. I can think of many scenarios of “reasons” used to “explain” what happened and why we had to have a bank holiday. THIS ONE in my opinion is at the top of the list!