Ben Bernanke – Nothing but a Miserable Failure

June 29, 2009 · Posted in Politics · Comment

Watch Mish blast Bernanke as he lists his ten “qualifications”:

Ten Qualifications

1) Bernanke is either a liar or has a memory problem. I believe the former. Either way, there is a problem when a Fed chairman cannot recall a conversation with another Fed governor over something as critical as the Bank of America/Merrill Lynch merger. See Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America “Turd in the Punchbowl” for my take.

2) Bernanke claims to be a student of the great depression yet amazingly concludes the cause was misguided Fed policy after the stock market crash. This is nonsense. The cause of the great depression and the cause of the current depression (yes we are in a depression), is the massive expansion of credit and debt fostered by the Fed itself. Bernanke is no student of history, he is a dunce.

3) Bernanke has on many occasions promised transparency. This is an outright lie. There is no transparency and Bloomberg has filed freedom of information lawsuits requesting information that should have been disclosed. Moreover, Congress had to subpoena the Fed in regards to the Bank of America / Merrill Lynch shotgun wedding which is how we know about Bernanke’s selective memory loss. What else is Bernanke hiding?

4) Bernanke is creative. Some might think creativity is a positive attribute. It is, for a design engineer. Unfortunately creativity is not a good attribute for a Fed chairman. This whole mess was sponsored by the Fed when Greenspan got creative with interest rate policy. Bernanke is light-years more creative than Greenspan as witnessed by an amazing array of Fed lending facilities and the ballooning of the Fed’s balance sheet swapped for garbage collateral. The unintended consequences of Bernanke’s extraordinary actions are coming down the road. We do not even know what those consequences are. However, we do know that the Fed has no exit policy, and will come up with one by the seat of Bernanke’s pants on the fly. Given there is no need for the Fed at all, the last thing we need is for a creative Fed.

5) Bernanke supports policies of theft. Proof of this is easy to establish. Bernanke favors a policy of 2% inflation, and inflation is theft. How so? Inflation benefits those with first access to money: governments, banks, and the wealthy. Government benefits when property taxes rise more than wages, banks benefit by borrowing money into existence, and the already wealthy benefit by being next in line for access to cheap money. By the time those low on the totem pole have access to cheap money, asset prices are already through the moon. Moreover, those with enough common sense to avoid the bubbles, get nothing for their money sitting in the bank. The middle class has been ravished by inflation, and Bernanke supports that inflation.

Please note that Bernanke cannot even follow his own mandate. Where was Bernanke when property and commodity prices were soaring? The answer is he was ignoring them. Thus we see the one sided nature of Bernanke’s policies. He let home prices soar, and now that they are crashing looks to support them. By the way, this is not just Bernanke, this is a symptom of central bankers in general.

6) Bernanke cannot dissent. As a member of the Greenspan Fed, Bernanke went along with everything Greenspan did. It is clear Greenspan failed. Thus it is clear that Bernanke failed by supporting Greenspan’s policies.

7) Bernanke supports policies of outright fraud. Fractional reserve lending is a fraud. Please consider Murray N. Rothbard and the Case for a 100 Percent Gold Dollar in which Rothbard condemned fractional reserve banking as a violation of contract. “In my view, issuing promises to pay on demand in excess of the amount of the goods on hand is simply fraud, and should be so considered by the legal system. For this means that a bank issues “fake” warehouse receipts — warehouse receipts, for example, for ounces of gold that do not actually exist in the vaults. This is legalized counterfeiting; this is the creation of money without the necessity of production, to compete for resources against those who have produced. In short, I believe that fractional-reserve banking is disastrous both for the morality and for the fundamental bases and institutions of the market economy….”

8) Bernanke could not spot the housing bubble. Amazingly Bernanke thought the housing bubble was “well contained” right before it exploded in his face. Of course there is another possibility: Bernanke is a liar and knew it was not contained but did not want to say so.

9) Bernanke has no idea where interest rates should be. Of course no one else does either. But Bernanke thinks he does. The result is overshooting interest rate policy in both directions, just as Greenspan did. This is the Fed Uncertainty Principle Corollary Number One in action: The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn’t know (much more than it wants to admit), particularly in times of economic stress.

10) Bernanke is a power grabbing hack. This is the Fed Uncertainty Principle Corollary Number Two in action: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Summary:

Bernanke is a disingenuous liar with a memory problem. He is also an economic dunce who does not understand the cause of great depression nor could he spot a housing/credit bubble visible to nearly every blogger in the country. However, like his mentor Greenspan, Bernanke believes that every problem can be cured by throwing money at it. Finally, he is a creative, political power grabbing hack who gives memorable speeches about throwing money out of helicopters.

I have to hand it to Caroline. That is indeed a unique set of qualifications.

Bernanke’s four-year term ends in February, let us hope he is gone. Better yet, it’s time to Audit the Fed Then End It!

As I pointed out before, Ben Bernanke is consistently wrong on virtually everything he says:

Let’s see what Bernanke had to say about 1 year ago in April 2008 …

Mr. Bernanke, testifying before the Joint Economic Committee on Capitol Hill, said the economic situation had weakened since the Fed last reported at the end of January but that it could revive later in 2008 because of the $150 billion spending and tax cut package enacted this year.

There is one thing you can trust Bernanke with – the fact that he is wrong, always and everywhere…In one year from now, when condidtions are worse than now, what do you think he will tell us then? Is anybody still listening to this guy? If so … why?

And here’s Bernanke in May 2007:

All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system. The vast majority of mortgages, including even subprime mortgages, continue to perform well. Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.

And I may point out that Bernanke needs to be tried as a criminal:

For all I know, this means that Paulson all but admitted to performing securities fraud, at the behest of Ben Bernanke. Bank of America shareholders have a clear case here. It’s time to let the indictments begin…

Mr. Bernanke, you need to step down, get ready to be tried in court, stop trying micromanage the economy, and above all Shut the Hell Up.

Meanwhile, Congress needs to Audit the Fed, expose it, and the get rid of it once and for all.

Tags: audit the fed, ben bernanke, federal reserve bank

Ron Paul’s Audit the Fed Bill – Now 242 Co-Sponsors

June 25, 2009 · Posted in Monetary Economics · Comment

While President Obama continues his mindless praise for the Federal Reserve and Ben Bernanke, the representatives in the House continue to sign on to audit the Fed:

Ron Paul’s bill to audit the Federal Reserve (HR 1207) now has 242 co-sponsors, and the numbers keep growing! At the same time, HR 1207’s companion bill in the Senate, S 604, is beginning to attract its first co-sponsors!

This is history in the making, and victory is within reach. Imagine what will happen if HR 1207, The Federal Reserve Transparency Act, comes up for vote in Congress! With more than 55% of the House of Representatives already co-sponsoring this bill, it has real potential to pass — BUT only if we educate and rally the people to support it and get our Congresspeople to put it to vote and pass it.

… history in the making indeed! But no time for complacency. The companion bill in the Senate, S604 still needs more co-sponsors.

Tags: audit the fed, ron paul

Ron Paul’s Audit the Fed Bill Gains Majority Support

June 11, 2009 · Posted in Politics · Comment

And finally, enough Congressmen and -women are on board with Ron Paul’s push for more transparency. Audit the Fed Bill Reaches Crucial Benchmark:

Washington, D.C. – Congressman Ron Paul’s Federal Reserve Transparency Act, HR 1207, has reached and surpassed the level of 218 cosponsors in the House of Representatives, which means it is now cosponsored by a majority of the members.

The 218th cosponsor was Dennis Kucinich (OH-10), and the bill has since received its 222nd cosponsor.

“The tremendous grass-roots and bipartisan support in Congress for HR 1207 is an indicator of how mainstream America is fed up with Fed secrecy,” said Congressman Paul. “I look forward to this issue receiving greater public exposure.”

Hearings on Federal Reserve transparency are expected within the next month, as part of the Financial Services Committee’s series of hearings on regulatory reform.

… unfortunately, I expect the Senate to do everything they can to dilute the bill, so no time for complacency here.

However, it is truly remarkable how the Campaign for Liberty has come at this point. While government officials left and right are capable of nothing but staging a deplorable circus, one Congressman from Texas has accomplished much more than anyone of the people who are supposed to be in charge.

To repeat what I said back in February:

[Obama's] fundamental misunderstanding on this matter is that he believes these disagreements are nothing but political games. They are not. They reflect sincere and deep-rooted concerns of the direction where this country has headed. They represent the voices of millions of frustrated workers, businessmen, housewives, students, and retirees calling their representatives, jammed fax machines, letters, town hall meetings, and the like. The movement for liberty is not one of political expediency. Its members are not in it for personal, monetary, or political gain. They are in it for true conviction and with all their heart. But on top of that, it is a movement of substance, reason, logic, and sound understanding of historical and economic facts. There is nothing in the world that could change some one’s mind, once one has understood the true blessings of Freedom, Liberty, Peace, Prosperity, and Happiness. It is a patient movement. It is not in a rush. It’s not gonna go away. It will grow stronger year by year. To ignore it would be the biggest mistake Obama could make now.

… and this is only just the beginning. The movement marches on.

Tags: audit the fed, campaign for liberty, ron paul

Audit the Fed – Only 11 More Co-Sponsors Needed

June 11, 2009 · Posted in Politics · Comment

Good news: Ron Paul’s Audit the Fed bill only needs 11 more co-sponsors to get a majority in the House …

Tags: audit the fed, ron paul, shelly roche

The Revolution Continues

May 5, 2009 · Posted in Politics · Comment

The ideas of free market economics, sound money, and individual liberties continue to sweep the establishment, one step at a time.

The Washington Independent writes Ron Paul’s Economic Theories Winning GOP Converts:

A funny thing has started happening to Paul since his long-shot presidential campaign ended quietly in the summer of 2008. More Republicans have started listening to him. There are the media requests from Fox Business Channel and talk radio, where he’s given airtime to inveigh on sound money and macroeconomics. There is HR 1207 , the Federal Reserve Transparency Act of 2009, a bill that would launch an audit of the Federal Reserve System, and which has attracted 112 co-sponsors. When Paul introduced the Federal Reserve Board Abolition Act just two years ago, no other members of Congress signed on.
…
The success of Paul’s events, however under-the-radar, have been a pleasant surprise for the experts. “I’ll admit it,” said Thomas Woods. “I was dead wrong in my first reaction when I heard Ron talking about the Fed on the campaign trail. I said, ‘This is too complicated for most Americans. This isn’t going to galvanize people.’ I was wrong! He’s taken an issue that wasn’t even an issue, and he’s got a lot of Americans suddenly fascinated by the Fed, by monetary policy, by the Austrian business cycle theory,” economic ideas promoted by thinkers like Ludwig von Mises and Murray Rothbard that blame central banks for painful business cycles.
…
It’s been a rapid rise for an idea that, only months ago, was located firmly in the political fringe. The John Birch Society, the far-right group that Paul has often defended from media criticism, was one of the first groups to encourage members to contact their members of Congress to support an audit of the Fed. Paul’s own coalition, the Campaign for Liberty, has engaged in a months-long grassroots campaign for the bill, something that Paul credited for a surge in support unlike anything he’s introduced in his second stint in Congress.

This is from a daily C4L newsletter email I received today:

Dear Friend of Liberty,

With each passing day, Ron Paul is winning people over to the cause of Federal Reserve transparency and sound money.

More and more Congressmen have been signing onto Dr. Paul’s Audit the Fed bill, HR 1207, and it is now up to a whopping 124 cosponsors.

That cosponsor list now includes over half of the House Republican Caucus.  Dr. Paul is truly leading the GOP back to its roots of sound money and fiscal conservatism.

In fact, The Washington Independent’s David Weigel just wrote an important article about how Ron Paul’s message is resonating with Republican lawmakers.  All I can say is, “It’s about time!”

Click here to read the article — “Ron Paul’s Economic Theories Winning GOP Converts”.

And today, Dr. Paul proved the case for Federal Reserve transparency to people across America by grilling Ben Bernanke on national television.

Chairman Ben is running scared now that HR 1207 is gaining steam.  He even tried to appease Dr. Paul by offering transparency on everything except monetary policy — the Fed’s sole function!

It is clear we are winning this fight, and I believe that ultimately we will see it through to victory.  But this is no time to rest on our laurels.

Keep writing and calling your congressman if he has not already cosponsored HR 1207 (click here to find out).  Circulate more petitions and Audit the Fed literature to your friends and neighbors to recruit them to this winning effort.

Thank you for all you have done and all you will do.  With your continued support, Ron Paul and Campaign for Liberty will return the GOP to its conservative roots, and America back to its founding principles.

In Liberty,
John Tate
President, Campaign for Liberty

P.S. Unlike the Fed, Campaign for Liberty cannot print money out of thin air.  Only your ongoing financial support allows us to do the work we do.  Please click here to donate to Campaign for Liberty.

I have never made my support for the Campaign for Liberty a secret. In Obama Makes an Unnecessary Gamble I wrote:

His fundamental misunderstanding on this matter is that he believes these disagreements are nothing but political games. They are not. They reflect sincere and deep-rooted concerns of the direction where this country has headed. They represent the voices of millions of frustrated workers, businessmen, housewives, students, and retirees calling their representatives, jammed fax machines, letters, town hall meetings, and the like. The movement for liberty is not one of political expediency. Its members are not in it for personal, monetary, or political gain. They are in it for true conviction and with all their heart. But on top of that, it is a movement of substance, reason, logic, and sound understanding of historical and economic facts. There is nothing in the world that could change some one’s mind, once one has understood the true blessings of Freedom, Liberty, Peace, Prosperity, and Happiness. It is a patient movement. It is not in a rush. It isn’t going anywhere. It will grow stronger year by year. To ignore it would be the biggest mistake Obama could make now.

If he continues doing it, the political retaliation will ensue sooner or later in the next Congressional elections and maybe in the next presidential elections. This is an unnecessary, harmful, and avoidable political gamble.

I haven’t changed my mind one bit on what I wrote back then. In fact, the recent developments only reaffirm my beliefs.

Tags: audit the fed, campaign for liberty, ron paul

The Fed Bought MBS Starting in 2000

April 18, 2009 · Posted in Monetary Economics · Comment

The following is rather commonplace to people who understand the financial crisis. I just felt it necessary to refresh people’s memories since for some reason no one in the mainstream seems to point this out.

Even though the US housing bubble was a symptom of a much bigger problem of general credit expansion, it obviously began to expand by an accelerated and unusual pace in or around the year 2000.

What caused this? It was of course due to the fact that the Federal Reserve Bank decided in August 1999 to add Mortgage Backed securities to its portfolio:

The broader range of collateral approved by the Committee for repurchase transactions included mainly pass–through mortgage securities of GNMA, FHLMC, and FNMA, STRIP securities of the U.S. Treasury, and “stripped” securities of other federal government agencies.

John Paul Koning has this chart on the mises.org site:

Should it be a surprise to anyone, then, that what ensued was a period of reckless speculation in and issuance of these types of securities and their derivatives?

So what should we do to avoid such a disaster in future? The solution is simple. Audit the fed, expose its disastrous policies, and get rid of it once and for all.

Tags: audit the fed, federal reserve bank, mortgage backed securities

Ron Paul’s Push for Transparency Gains Support

March 24, 2009 · Posted in General Economics · 1 Comment

First off, please consider Ron Paul’s excellent explanation of the importance of entrepreneurial profit and loss and how bankruptcies of failing operations would actually be the real stimulus:

Support for his important bill is skyrocketing:

Ron Paul’s “Federal Reserve Transparency Act” to audit the Federal Reserve is now up to 39 co-sponsors the House, and an identical companion bill, S604, has been introduced in the Senate. Here are the House co-sponsors:

Young (R-AK), McClintock (R-CA), Woolsey (D-CA), Rohrabacher (R-CA), Castle (R-DE), Stearns (R-FL), Grayson (D-FL), Buchanan (R-FL), Posey (R-FL), Kingston (R-GA), Price (R-GA), Broun (R-GA), Abercrombie (D-HI), Burton (R-IN), Fleming (R-LA), Alexander (R-LA), Bartlett (R-MD), McCotter (R-MI), Bachmann (R-MN), Peterson (D-MN), Akin (R-MO), Taylor (D-MS), Rehberg (R-MT), Jones (R-NC), Foxx (R-NC), Garrett (R-NJ), Heller (R-NV), DeFazio (D-OR), Platts (R-PA), Duncan (R-TN), Wamp (R-TN), Blackburn (R-TN), Poe (R-TX), Paul (R-TX), Marchant (R-TX), Burgess (R-TX), Chaffetz (R-UT), Petri (R-WI), Kagen (D-WI), Lummis (R-WY)

32 Republicans and 7 Democrats so far.

Sign this petition for more transparency, regulation, and freedom.

Tags: audit the fed, federal reserve bank, ron paul

Support the ‘Audit the Fed’ bill

March 14, 2009 · Posted in Politics · Comment

Among all the recent, ill conceived bailout and spending bills that will all fail miserably, there is one good bill that is currently being introduced by Texas Congressman Ron Paul.

An appropriate call to action from C4L:

March 12, 2009

Dear Friend of Liberty,

Right now, you and I are seeing the worst plundering of a nation’s wealth in the history of civilization – all led by the out of control Federal Reserve.

If you and I don’t act today, I’m afraid this crisis will end with the economic ruin of every man, woman and child in the United States.

Just think about the scope of the problem for a minute: The Fed pumps trillions of dollars in fiat currency into a system already overloaded by the massive amount of dollars committed to the economic bailouts in recent months.

This TOTALS:

More than the socialist New Deal…
More than the entire Iraq debacle…
More than the 1980’s savings and loan mess…
More than the Korean War…

COMBINED.

Where will it all end?

It’s time you and I put a stop to an out of control Federal Reserve. And Ron Paul has a bill before Congress to do just that.

That’s why it’s vital you fill out your personal “Audit the Fed” petition in support of Congressman Paul’s bill.

Today, $9.7 TRILLION in taxpayer dollars in bailouts and loans have been agreed to by Congress, the Bush and Obama Treasury Departments, and the Federal Reserve.

Poll after poll shows the American people are fed up and are ready for fresh leadership to make their voices heard in Washington.

That means it’s a perfect time to unleash the Ron Paul R3VOLUTION on the out of control Fed!

Please complete this petition urging your Congressman to cosponsor and a seek roll-call vote on Ron Paul’s Audit the Fed Bill — the first step toward ENDING THE FEDERAL RESERVE once and for all!

As I know you’re aware, the Federal Reserve’s inner-workings are shrouded in secrecy, and their meetings are off-limits to the public.

Just recently, the Federal Reserve told Congress “NO WAY” when asked to account for TWO TRILLION DOLLARS in taxpayer-backed loans!

Well, why do you think they refused?

They know coming clean with Congress and the American people on how they doled out those two TRILLION dollars would result in an anti-Fed firestorm.

So can you imagine the impact of a full-scale audit?

You and I will finally be able to show the American people that the Federal Reserve System leads to:

*** Constant economic crises — the housing crisis and the resulting chaos is just one example of an economic bubble created by centrally-planned interest rates and money manipulation;

*** The destruction of the middle class — as fuel, food, housing, medical care and education costs soar, everyone who is NOT on the government dole is forced to make do with less as the value of their money slowly decreases;

*** Currency destruction — history shows us that riots, violence and full-scale police states can result when people finally realize fiat money isn’t worth the paper it’s printed on and REFUSE to accept it.

And unless you and I do end the madness in Washington, D.C., we may be closer than we’d like to think to learning that history lesson first hand — right here on the streets of our towns and cities.

That’s why your commitment to helping the Campaign for Liberty fight this battle is so vital.

Just a few months ago, there was no chance of passing any legislation like Ron Paul’s Audit-the-Fed Bill.

So I guess there has been one “CHANGE.”

But with the piling up of trillions of dollars in out of control “bailouts” of Wall Street and international bankers, even many politicians in Washington, D.C. want to show you they’re “being responsible”.

What better way for Congress to do this than by auditing the Federal Reserve to account for the trillions stolen from the U.S. taxpayers?

There will be many battles you and I must fight over the coming months to take back our country. But this one is set to rage in Congress in just a few short weeks.

And, it’s a bill we CAN pass!

You see, after regulating, taxing, spending, borrowing and printing us into what looks like the worst recession in decades, establishment politicians and power brokers are assuring us they are working hard to “fix” our economic woes.

So they want to do something (anything) to show you they care.

That’s why Dr. Paul’s bill is positioned to move forward this year.

And since very few politicians understand the Federal Reserve System, they do not understand the threat this bill poses to the borrow-and-spend system they continually vote for.

And even if Ron Paul’s Audit-the-Fed Bill is defeated, just forcing a vote is a win/win situation.

Can you imagine how many politicians will pay the price at the ballot box in 2010 when you and I tell the American people their Congressman somehow lost trillions of taxpayer dollars and voted against even looking for the money?

Of course, getting a vote won’t be easy, but you know just as well as I do that Ron Paul has proven he’s not afraid of a fight.

Now, we just need to show Congress that the American people demand action on Ron Paul’s Audit-the-Fed Bill. Here’s how we plan to do that:

First, we’re already busy contacting up to five million activists nationwide through mail, phones and e-mail to generate petitions to the U.S. Congress demanding action on the bill.

But that’s just the beginning.

We’ll work the talk radio stations and grant local media interviews to further turn up the pressure on Congress. And, of course, Ron Paul supporters will own the meet-up groups and social networking sites that first launched our R3volution.

And a few days before the vote, if we have the resources, we’d also like to run hard-hitting targeted radio, TV and newspaper ads.

This entire program is designed to send one, CLEAR message to Congress — Any politician who votes against the Federal Reserve Audit should look for another job.

But such a massive effort won’t be easy — or cheap.

So, along with your petition, I also hope you’ll agree to make a contribution of $250, $100, or $50 to the Campaign for Liberty.

I know times are hard, but if we don’t take action, the America we see in just a few years could look much different than the one we see today.

So please, fill out your petition and give a generous contribution of $250, $100, or $50 to the Campaign for Liberty IMMEDIATELY.

Please don’t just ignore this email.

Can I count on you to join the fight to ultimately END THE FED by making a generous contribution of $250, $100, $50 — or whatever you can afford to the Campaign for Liberty?

Sincerely,
John F. Tate
President