WOW!!!…Gee haven’t we kinda had it with the sexual inudations to discredit someone throughout the history of time…Give us a break…at least be a little more imaginative…How dumb do you really think we are???It’s become predictable…
~jude
While the White House and Pentagon worry over the coming disclosure of another 15,000 classified documents on Afghanistan by WikiLeaks, the organization’s leader Julian Assange finds himself swirling in accusations of sexual impropriety.
What is the truth behind the allegations? What effect will they have on WikiLeaks? Is this a “dirty tricks” effort by intelligence agencies to discredit, disrupt and destroy the whistleblower threat?
It is far easier to translate Bernanke than Greenspan. Both men had this task: to deceive the public. Greenspan adopted verbal obfuscation as his technique. Bernanke has adopted boredom.
I hope this exercise will help you understand his speech of August 27.
CHALLENGES AND DAUNTING CHALLENGES
People who are unfamiliar with Bernanke’s strategy of downplaying everything, in good professorial fashion, may miss the significance of what he said.
On the whole, when the eruption of the Panic of 2008 threatened the very foundations of the global economy, the world rose to the challenge, with a remarkable degree of international cooperation, despite very difficult conditions and compressed time frames.
Translation: (1) “The world rose to the challenge.”Hank Paulson nationalized the mortgage market unilaterally. He let Lehman Brothers go bust, so as to catch Congress’s attention. Then he got Congress to bail out AIG and the largest banks. I cooperated. The FED swapped liquid Treasury debt at face for heavily discounted promises to pay that were held by the largest banks for which there was no market.
Then the Financial Standards Accounting Board reversed itself on FAS 157. Banks would not be required to list their assets at market value. This kept them solvent.
Then other central banks and politicians imitated Paulson and me by bailing out their largest banks. We set the pattern. They followed suit.
(2) “Despite very difficult conditions and short time frames.
Notwithstanding some important steps forward, however, as we return once again to Jackson Hole I think we would all agree that, for much of the world, the task of economic recovery and repair remains far from complete.
Translation: Everyone knows the economy is slowing. The two stimulus packages totalling $1.5 trillion barely reversed the recession, assuming it reversed at all. Meanwhile, the pantywaists on the National Bureau of Economic Research committee that decides when recessions end decided in April not to decide. That left me holding the bag. So the FED has declared that it ended in April 2009. Like it or lump it.
When Fed Chairman Ben Bernanke admits to seeing an “unusually uncertain” economy ahead, it’s pretty terrifying to imagine what he’s really thinking. What John Williams envisions – and he’s by no means looking to the far horizon – is a systemic collapse, a hyperinflationary great depression and the cessation of normal commerce. Despite that bleak outlook, however, when the economist and editor of ShadowStats.com sat down for this exclusive Energy Report interview, he also had some good news.
The Energy Report: A few months back, John, you said, “if you strangle liquidity you always contract an economy and deliberately or not, liquidity is being strangled, resulting in sharp declines in consumer credit, commercial and industrial loans.” Does this mean it would spur more economic growth if banks actually started lending?
John Williams: It sure wouldn’t hurt. We’re still seeing contractions in liquidity, and that’s adjusted for inflation. In real terms, M3 money supply is down almost 8% year-over-year. It’s the sharpest fall in the post -World War II era. It’s not so much the depth of the decline in the liquidity or the duration, but the fact that the liquidity turns negative year-over-year that signals the economy turning down.
We had the signal in December of 2009 indicating intensification of the downturn, in this case, within six to nine months. We’re in that timeframe now and see softening numbers. People are talking about a weaker economy. Even Mr. Bernanke has described the economy as “unusually uncertain” in terms of its outlook. Wording like that from the Fed is a pretty good indication that something’s afoot.
Why is M3 still contracting?
JW: Just as you noted, the banks are not lending. The money the Fed put into the system in terms of buying mortgage-backed securities from the banks and trying to help bank liquidity ended up back with the Fed as excess reserves. We have well over $1 trillion there; had the banks loaned that money in the normal stream of commerce, it would have added more than $10 trillion to the broad money supply, which otherwise is up around $14 trillion. That certainly would have had some inflationary impact if not in terms of actual business activity. You can’t always get the economy to grow by pushing money into it. Sometimes it’s like pushing on a string.
The Congressional Budget Office (CBO) forecasts the U.S. budget deficit will hit $1.3 trillion this year. An astronomical figure, to be sure, but that’s lower than was projected in March. It’s also less than last year’s record $1.41 trillion deficit, which was close to 10% of GDP.
And, that’s the good news.
As the deficit grows so does the national debt, which is currently more than $13.3 trillion, according to official figures.
But the situation is actually much, much worse, according to Boston University economics professor Laurence Kotlikoff.
“Forget the official debt,” he tells Aaron in this clip. The “real” deficit – including non-budgetary items like unfunded liabilities of Medicare, Medicaid, Social Security and the defense budget – is actually $202 trillion, the professor andauthor calculates; or 15 times the “official” numbers.
Yet, the debt market continues to have an insatiable appetite for U.S. Treasuries; heading into Monday’s session, the yield on the 30-year Treasury bond (which moves in opposition to its price) was at its lowest level since April 2009.
Kotlikoff says that’s because the market is focused on the “mole hill” of official debt. In time, the U.S. will have a major inflation problem to rival that of Germany’s post World War I Weimar Republic, he predicts. “We have to think about the fact that unless the government gets its fiscal act in order we’re going to have the government printing lots and lots money to pay these enormous bills that are coming due over time.”
America is in need of major reform of the health-care, retirement, tax and financial system, Kotlikoff continues. “We need (to perform) heart surgery on this economy, not putting on more band-aids which is what we’ve been doing.”
Barring that, your hard-earned dollars will soon be worthless, he declares.
The United States is running out of time to get its budget and trade deficits under control. Despite the urgency of the situation, 2010 has been wasted in hype about a non-existent recovery. As recently as August 2 Treasury Secretary Timothy F. Geithner penned a New York Times Column, “Welcome to the Recovery.”
As John Williams (shadowstats.com) has made clear on many occasions, an appearance of recovery was created by over-counting employment and undercounting inflation. Warnings by Williams, Gerald Celente, and myself have gone unheeded, but our warnings recently had echos from Boston University professor Laurence Kotlikoff and from David Stockman, who excoriated the Republican Party for becoming big spending Democrats.
It is encouraging to see a bit of realization that, this time, Washington cannot spend the economy out of recession. The deficits are already too large for the dollar to survive as reserve currency, and deficit spending cannot put Americans back to work in jobs that have been moved offshore.
However, the solutions offered by those who are beginning to recognize that there is a problem are discouraging. Kotlikoff thinks the solution is massive Social Security and Medicare cuts or massive tax increases or hyperinflation to destroy the massive debts.
Perhaps economists lack imagination, or perhaps they don’t want to be cut off from Wall Street and corporate subsidies, but Social Security and Medicare are insufficient at their present levels, especially considering the erosion of private pensions by the dot com, derivative and real estate bubbles. Cuts in Social Security and Medicare, for which people have paid 15% of their earnings all their life, would result in starvation and deaths from curable diseases.
“The US is not a superpower. The US is a financially dependent country that foreign lenders can close down at will. Washington still hasn’t learned this. American hubris can lead the administration and Congress into a bailout solution that the rest of the world, which has to finance it, might not accept.”
-Paul Craig Roberts
I read this quote just a few minutes ago from a respected American who has served his country well. As an American, it’s painful and embarrassing at the same time to get up each morning and read sentiments like this. It makes me want to move to Canada (kidding).
Valéry Giscard d’Estaing, a French Minister of Finance in the 1960’s referred to the benefits the United States had in the US Dollar being the international reserve currency as an “exorbitant privilege”.
Yesterday the S&P 500 closed flat on the day on anemic volume; it feels like everyone is on summer vacation. We learned yesterday that the Chinese are selling their holding of US Treasuries in favor of Europe and Japan. We are financially dependent on foreign lenders and our biggest creditor is saying “no mas” – on this news the S&P 500 traded flat on the day.
The dollar sent the right message yesterday, declining 0.50% and it is headed lower. The actions of the Chinese are telling the rest of the world to flee dollar-denominated paper assets. This is a problem for the dollar as the Federal Reserve appears to be a lender of last resort for the U.S. Treasury. While the selling of foreign-held dollar-denominated debt has been orderly so far, the inflow of foreign-held dollars into the U.S. will debase the dollar and lead to higher inflation. Despite what the FED sees (it’s focused on the “core” figure), the signs of inflation abound in the economy.
By Paul Craig Roberts
Evidence that the US is a failed state is piling up faster than I can record it.
One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.
Income inequality in the US is now the most extreme of all countries. The 2008 OECD report, “Income Distribution and Poverty in OECD Countries,” concludes that the US is the country with the highest inequality and poverty rate across the OECD and that since 2000 nowhere has there been such a stark rise in income inequality as in the US. The OECD finds that in the US the distribution of wealth is even more unequal than the distribution of income.
As always I remind readers that this has been going on for quite some time under Presidents of BOTH parties… ~jude
So . . . you think you know quite a bit about Obama and his band of thieves.
You don’t know anything yet. Read on all of this as it all comes together in the last part…….. a must read.
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This is an interesting story put together from various articles and TV shows by the British Times paper. It shows what Obama and his friends are really all about. It’s not hope and change, it is money.
I warn you, the first part is a little boring, but stick with it. The
second part connects all the dots for you (it will open your eyes). The end explains how Obama and all his cronies will end up as
multi-billionaires. (It’s definitely worth the read. You will not be disappointed).
