Janet Yellen: What A Horrifying Choice For Fed Chairman She Would Be

http://theeconomiccollapseblog.com/archives/janet-yellen-what-a-horrifying-choice-for-fed-chairman-she-would-be

Fed Chairman Bernanke's successor will regret "winning" the post when the USS Titanic sinks on his/her watch. Summers is no dummy.
— Gregory Nguyen (@dakyne) September 22, 2013

Gold and Economic Freedom

It is hard to believe former Fed Chairman Alan Greenspan wrote this, but that he did in 1966--BEFORE he was Fed Chairman.

http://constitution.org/mon/greenspan_gold.htm

An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense - perhaps more clearly and subtly than many consistent defenders of laissez-faire - that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other.

In order to understand the source of their antagonism, it is necessary first to understand the specific role of gold in a free society. 

Money is the common denominator of all economic transactions. It is that commodity which serves as a medium of exchange, is universally acceptable to all participants in an exchange economy as payment for their goods or services, and can, therefore, be used as a standard of market value and as a store of value, i.e., as a means of saving.

The Fed Chairman's Inconvenient Quotes

I'm not endorsing the firm in this video--in fact, I've never heard of them until now.  I'm just posting it since I've been telling folks how wrong the Fed Chairman has been in his predictions for years.  Glad to see some mainstream money managers are seeing the light.


http://youtu.be/5cwfbH6OPvo

Paul Volcker Panel Discussion

For the monetary history-challenged, Paul Volcker was the Fed Chairman in the late 70's and 80's who effectively squashed inflation by raising interest rates to all-time highs, effectively inducing a deep recession, but restored faith and confidence in the strength of the USDollar and eventually, the economy itself.  He basically ushered in two decades of the prosperity and one of the most prosperous eras in human history.  He forced America to take its bitter medicine, cleansing itself of soaring inflation and a stagnant economy.

It was the right thing to do, even if painful short-term.  However, today's Fed Chairman Ben Bernanke has no such luxury.  Why?  Because in 1980, the US was the world's biggest creditor.  Raising interest rates meant foreign countries had to pay the US Treasury more in interest payments.  Today, the US is the world's largest debtor--in the history of mankind.  A rise in interest rates would result in America's bankruptcy, as we owe the rest of the world trillions in USDollars.

That's why the Fed is trapped--we face certain bankruptcy and default, and the only solution left is to print more currency, which of course, exacerbates the humongous debt problem.  Printing more fiat currency only delays the inevitable default--it doesn't resolve the structural debt problem.

http://tradewithdave.com/?p=14381

Volcker at the 49 minute mark:

“If a gold standard is going to be effective, you’ve got to fix the price of gold and you’ve got to really stick to it.”  Volcker continues, “To get on a gold standard technically now, an old fashioned gold standard, and you had to replace all the dollars out there in foreign hands with gold, God the price, you buy gold, because the price of gold would have to be enormous (atlas-sized touchdown hand signal).”  Volcker goes on to say “Who thinks that would be maintained?” (scoff).  

Volcker continuing from the 50 minute mark:

“The straightforward central banking measures have lost their effectiveness. They have gone as far as they could go.”

Fed’s Sheets Quits as Bernanke’s Chief International Adviser

Just as all of Obama's economic advisors have resigned (the last one standing, Treasury Secretary TurboTax Timmy Geithner is barely hanging on), Fed Chairman Blackhawk Ben Bernanke's advisers are abandoning ship also.

What's that expression about rats abandoning ship?  Does anybody feel warm and fuzzy still? 

Fed’s Sheets Quits as Bernanke’s Chief International Adviser 

Bernanke Abandoned! Three’s a Trend After International Economic Adviser Sheets Ends 18-Year Run With Fed

Key Bernanke adviser resigns from Fed board

Fed’s Warsh Quits; Bernanke Adviser Questioned QE2

 

 

Ron Paul : Why do central banks hold Gold? Bernanke : Tradition

This is exactly why the USDollar is doomed (see Youtube video below).  Our Fed Chairman doesn't even understand what money is.  You want to know why gas at the pump has almost tripled in two years?  Or why commodities and food prices are soaring?  Or why people in poor countries are rioting in the streets?  Here's a hint:  It's not about evil dictatorships or oppressive governments.  Many have lived under totalitarian government regimes for centuries and decades.  The reason why they're taking to the streets is because they cannot feed themselves due to soaring food prices.

Food may represent 5% - 15% of typical American household incomes.  When food prices rise, we complain to our neighbors.  But food makes up 80% of Libyan or Egyptian household income.  When food prices rise, they literally starve.  That's why they are rioting.  Otherwise, why would they risk life and limb?

The sources of worldwide rising inflation are the easy money policies of central banks from the European Community, the UK, Japan, the Fed, and even China.  They are all turning on the printing presses in order to paper over their own economic and fiscal problems.  They're also bailing out bankrupt institutions and sovereign nations.  In doing so, they debase paper currencies, causing prices to rise all across the spectrum globally.

During previous testimony, Fed Chairman admitted he was "puzzled" by surging gold prices.  <click here> Today, he tries to explain why.  He still doesn't get it.  Or maybe he does, but can't say.  And he doesn't understand his unintended primary role in causing currency-induced, cost-push inflation.  The end result is hyperinflation and a loss of confidence in a currency.

"Gold is money, and nothing else." - JPMorgan, 1913
 

http://youtu.be/2Dj9v9s9buk

Comment on Fed Chairman Ben Bernanke, by B9K9 on Zero Hedge

I disagree; I think Bernancke is a true believer, which is why he was selected for the position. The real players, who are descendants of those who first created the BoE, then the Fed, and many over CBs, know the true score.
After all, from their earliest ages, they are schooled in the simple mathematics of usury & compound interest. Their heritage is one of ultimate predation - to lie in wait until thriving societies (republics) reach the point of exhaustion so that their corrupting influences can have greatest effect.
But that observation is repetitive and well known by any who wish to understand. My interest lies in why people want to believe Bernancke can have any effect. I think the best way to explain this phenomena is to consider the witch doctor: why did/do primitive cultures revere witch doctors?
I think the simple explanation is that people are afraid. In days of yore, a crop failure was a death sentence for the entire country. Since people had nothing to lose, why not put their faith in the rantings of some hocus-pocus spewing mumbo-jumbo? After all, if he was wrong, they were dead anyway.
That's where we're at today - what do we have to lose by letting Ben dick around with monetary policy? After all, once the Fed was created nearly 100 years ago, the American Empire was put on death watch. I mean, it was fait accompli; the only variable was time.
Like a python, once a society relinquishes itself to the soft embrace of the chosen, it's a goner. The tribe never lets go until the victim is dead, then moves on to search for other living, thriving victims. It's been this way for 5-6 thousand years, and I dare say it will continue for at least that long into the future.
After all, how many people read/know of the Founders' warnings regarding foreign banking interests consipriing against the young Republic? 200+ years from now, no one will care to understand what happened when the American Empire finally expired. It will be lost in the annals of time, allowing the vipers to once again spin their webs.

- B9K9, 6/9/2011

http://www.gata.org/node/9658

"It did deliver price stability over very long periods of time, but over shorter periods of time it caused wide swings in prices related to changes in demand or supply of gold. So I don't think it's a panacea," Bernanke told DeMint.

Additionally, Bernanke said there were a number of practical issues that would prevent the return of gold as the world standard. Namely, there's not enough gold in the world to effectively support the U.S. money supply.

Reading between the lines, it appears gold is way underpriced, and the Fed has been running the printing presses in overdrive.

Stunner: Gold Standard Fully Supported By... Alan Greenspan!?

http://www.zerohedge.com/article/stunner-gold-standard-fully-supported-alan-greenspan 

"We have at this particular stage a fiat money which is essentially money printed by a government and it's usually a central bank which is authorized to do so. Some mechanism has got to be in place that restricts the amount of money which is produced, either a gold standard or a currency board, because unless you do that all of history suggest that inflation will take hold with very deleterious effects on economic activity... There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard." - Alan Greenspan, former Federal Reserve Bank Chairman

Bill Gross calls the Fed a Ponzi scheme

This won't put Bill Gross's PIMCO on the White House Christmas list, especially since the world's largest bond fund manager has been profiting from front-running the Fed.

http://www.zerohedge.com/article/bill-gross-calls-fed-mother-all-ponzi-schemes-says-30-year-bond-market-ending

Greenspan, the Fed, and gold

http://www.economicpolicyjournal.com/2010/09/alan-greenspan-hedge-against-federal.html

The multi-billion dollar hedge fund run by John Paulson has a huge position in gold. Zero Hedge reprints a portion of a Paulson letter sent to investors. In that letter, Paulson explains who is advising them to buy so much gold :

Lastly, and perhaps most important, from a monetary policy perspective in developing an ability to forecast the timing and future price of gold we believe we have an unparalleled team. Former Federal Reserve Chairman Alan Greenspan has been extremely helpful to us in understanding the relationship between the monetary base, the money supply, inflation and gold prices.

John Paulson's hedge funds made $20 billion in profits betting against the subprime mortgage industry in 2008. He went long gold in 2009. His recent bets on an economic recovery have soured, but his bets on gold and gold-related equities have continued to outperform.

Fed prepared to act if economy worsens

In the "No $hit" category of Fed press conferences, Chairman Bernanke announced that the Fed was "prepared to act if the economy continued to weaken."

http://www.nytimes.com/2010/08/28/business/economy/28fed.html?_r=1

QE 2.0 is just around the corner. The problem is it won't end there.

Gold and Economic Freedom, by Alan Greenspan, 1966

This was his opinion before he was Fed Chairman, obviously.

http://www.constitution.org/mon/greenspan_gold.htm

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

Further job losses may spur quantitative easing

This is what I have been predicting all along: another round of quantitative easing due to a non-existent economic recovery, despite incessant cheerleading by government economists to the contrary.

http://www.guardian.co.uk/business/2010/aug/06/us-jobs-fall-double-expected

The sharp drop in jobs, which follows news of slowing economic growth in the US, is likely to prompt discussions at the Federal Reserve over implementing more quantitative easing – a way of pumping money into the financial system. The central bank's Federal Open Market Committee (FOMC) meets on Tuesday and Fed chairman Ben Bernanke has already hinted to markets that its programme of asset purchases could be resumed.

"The big picture is unfortunately that the downtrend in US economic growth is once again obvious, and these figures will probably do little to deter the FOMC from ultimately implementing fresh stimulus in the near future," said Nick Beecroft at Saxo Bank.

"I'd expect them to reinstate a quantitative easing programme - buying either US Treasuries or mortgage-backed securities - either at next week's meeting, or more likely at the following meeting on 21 September."

Goldman Sachs is now in the same camp, predicting QE 2.0 will be announced in Tuesday's FOMC meeting. They also lowered their forecast for GDP growth for 2011 from 2.5% to 1.9%, and raised their estimate for the unemployment rate from 9.7% to 10%.

http://www.zerohedge.com/article/goldman-explains-imminent-launch-1-trillion-qe-2-muses-dreaded-double-d

Alan Greenspan: The Financial System Is Broke

Visit msnbc.com for breaking news, world news, and news about the economy

http://www.msnbc.msn.com/id/21134540/vp/38510073#38510073

MR. GREENSPAN: Yeah, yeah. I, I would say that there's nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

MR. GREENSPAN: Well, the problem there implies that the government has control over those rates, meaning the Federal Reserve and the Treasury Department, in a sense. There is no doubt that the federal funds rate, that is the rate produced by the Federal Reserve, can be fixed at whatever the Fed wants it to be, but which the government has no control over is long-term interest rates, and long-term interest rates are what make the economy move. And if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. At the moment, there is no sign of that, basically because the financial system is broke and you cannot have inflation if financial system is not working.

There's nothing like the truth coming from a former Fed Chairman. Greenspan is correct in this case: bond vigilantes will punish the US Treasury bond markets in demanding higher yields on long-dated Treasury bonds, forcing up long-term interest rates. They will also drive down the value of the USDollar, as the US government's ability to pay its obligations will come under question. It's not a matter of if, but when the steepening of the yield curve will occur.

Here is an article addressing the steepening of the yield curve from 2009.

http://www.reuters.com/article/idUSTRE54U1NZ20090531

Greenspan warns of US budget deficit

This is another example of a former government official speaking out now that he is no longer bound by political restraint.

http://www.dailyfinance.com/story/greenspan-warns-us-budget-deficit-greece/19521722/

Debt problems concern Greenspan

Now that Alan Greenspan is no longer Fed Chairman, he's speaking out on the huge debt burden.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a77tZkPI2DT4

Higher yields reflect investor concerns over “this huge overhang of federal debt which we have never seen before,” Greenspan said in an interview today on Bloomberg Television.

“I’m very much concerned about the fiscal situation,” said Greenspan, 84, who headed the central bank from 1987 to 2006. An increase in long-term interest rates “will make the housing recovery very difficult to implement and put a dampening on capital investment as well.”

“I don’t like American politics and what’s happening,” Greenspan said.

Historically, there has been “a large buffer between the level of our federal debt and our capacity to borrow,” he said. “That’s narrowing. And I’m finding it very difficult to look into the future and not worry about that.”

Peter Schiff revisited

http://www.youtube.com/watch?v=9H3mSTsly5M&feature=player_embedded

Alan Greenspan quotes

Former Federal Reserve Bank Chairman Alan Greenspan quotes:

Before he was Fed Chairman:

"In the absence of the gold standard, there is no way to protect
savings from confiscation through inflation. ... This is the shabby
secret of the welfare statists' tirades against gold. Deficit spending
is simply a scheme for the confiscation of wealth. Gold stands in the
way of this insidious process. It stands as a protector of property
rights. If one grasps this, one has no difficulty in understanding the
statists' antagonism toward the gold standard." - Alan Greenspan, 1966, pre-Fed Chairman.

Post-Fed Chairman:

“Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies… What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment."
–Alan Greenspan, 9 September 2009

This is in stark contrast to what he was saying during his multiple appointments as Fed Chairman. And his easy money, zero-interest rate policies mirror what current Fed Chairman Ben Bernanke is endorsing today. But the Fed is allegedly unbiased and independent, right?

Worst financial crisis ever - Greenspan

It's predictable that former Fed Chairmen and government bureaucrats finally speak the truth after they leave office.

http://www.businessweek.com/news/2010-02-23/greenspan-calls-crisis-by-far-worst-ever-recovery-uneven.html

Former Federal Reserve Chairman Alan Greenspan said the financial crisis was “by far” the worst in history and called the recovery from the global recession “extremely unbalanced.”

In a speech today in Washington, Greenspan said the global economy has undergone “by far the greatest financial crisis globally ever.” He also said small businesses show few signs of improving because lenders are struggling with commercial real estate mortgages.