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Fed Chairman Ben Bernocchio did a press conference this afternoon after the release of the Fed statement.  He says that the “main headwind” for the economy is “fiscal policy.”  You know, taxes and spending, budget surpluses and deficits…well not so much surpluses.  He basically said “don’t blame it on us as we’ve done all that we possibly can.”  In human speak; he is putting the blame on Congress.  He is saying that if the fiscal house was in order, none of this would ever have happened and the Fed wouldn’t have had to drop rates to zero and monetize debt.

Rick Santelli of CNBC earlier this morning asked “What are you so afraid of Ben?”  This is a great 3 minutes to watch and if you’re like me, it validates the times when I hear idiocy and start screaming at the TV.  Yes, Congress is to blame for spending more than we took in, I agree.  I also believe that without the Fed which creates inflation and thus makes the debt “cheaper” to pay back in the future (which can now never happen) then Congress would never have gone hog wild with spending.  They spent and they spent and they spent…because they figured that it would be “cheaper” …later to pay back.  Also, the Treasury could never have borrowed what they have over the last 4 years in particular without the Fed buying (monetizing) the debt.  There was no one else left to buy Treasuries…so they bought everything that was offered by Treasury.

By the way, if you look at what was said, “fiscal policy as a headwind” can and should be extrapolated into “we are broke.”  I say this because it is true and it is reality.  If the Fed doesn’t continue with QE, the Treasury cannot borrow what they need to borrow.  If the Fed stops printing the economy will go into serious reverse and tax revenues will drop, thus putting more pressure on the Treasury to borrow even further.  For that matter, if the Fed were to stop printing, the banking then the financial systems would seize up and not even overnight loans would clear.  This is not rocket science, it is merely looking at what is and isn’t.  The Treasury is broke and the vaults have been looted while our Central bank keeps the Ponzi game going by printing “reserve currency” out of thin air so that the banks who sit on huge losses (though not disclosed because of fantasy accounting practices) can keep their doors open.

Please do not be fooled into believing that they have a “solution.”  They don’t because there is not one.  If everything was “so good” then why has legislation recently been writing on how to raid customer accounts whenever a bank fails?  We were on the very edge of total collapse back in 2008-09, nothing was fixed, and actually nothing has even changed (except for accounting principles.) We continued on with exactly what got us into the problems in the first place…only with much higher doses of bad business logic.  Not that he is having fun but Mr. Bernocchio must surely hope that “time” passes quickly so that he can get out of Dodge before the house comes down.  At this point, the only thing he can hope for is “it didn’t happen on my watch!”