Antal Fekete's Open Letter To Ron Paul: "Impeach Bernanke"

a tough spot he and his merry band got all of us into. fed apologists are so annoying. "he's doing the best he can....blah blah"

 

At least you replied and gave some reason for Bernanke's dilemma, as you refer to it. I have witnessed all Fed chairman from Volcker to Bernanke. You may have some basis as Glass-Steagall being repealed and so forth (Volcker was opposed, knowing full well blurring the lines between trading casinos as they have come to be and banks).

The "Maestro of the Economy" Greenspan enabled the current scenario with first LTCM and then advocating looser and looser credit as he was strictly a Wall St. lackey. A simpleton can recognize this fact. Bernanke continues this trek toward perdition with "QE to infinity", far surpassing the damage Greenspan wrought. It is failing. How can it be argued otherwise. Gold is at 1450 headed to 2,000 and beyond. That is reason enough to call for his ouster and there are many more. The current situation we see is a "monetary event" regardless of
your comment otherwise, directly emanating from the Fed.

 

But is the price of Gold really a problem? The price of Crude is obviously a problem since that trickles into the price of just about everything, but again, I don't think Bernanke should shoulder the blame for the high price of crude. Partially; sure. But again, he's trying to address the weak economy and high unemployment so that's not going to be without risks.

 

While maybe not impeachable, what what the Fed has done with ZIRP to retirees via the miserable rates for CDs, savings accounts, etc., is morally criminal:

Fed’s Low Interest Rates Crack Retirees’ Nest Eggs

PORT CHARLOTTE, Fla.—Forrest Yeager, a 91-year-old resident of this seaside community, had been counting on his retirement savings to last until he died. The odds are moving against him.
With short-term bank CDs paying less than 1%, the World War II veteran expects his remaining $45,000 stash to yield just a few hundred dollars this year. So, he’s digging deeper into his principal to supplement his $1,500 monthly income from Social Security and a small pension.

“It hurts,” says Mr. Yeager, who estimates his bank savings will be depleted in about six years at his current rate of withdrawal. “I don’t even want to think about it.”

Mr. Yeager is among the legion of retirees who find themselves on the wrong end of the Federal Reserve’s epic attempt to rescue the economy with cheap money. A long spell of low interest rates has created a windfall worth billions to banks, mortgage borrowers and others it was designed to benefit. But for many people who were counting on their nest eggs, those same low rates can spell trouble.

Mr. Yeager’s struggle highlights a nagging dilemma facing Fed Chairman Ben Bernanke. The longer the central bank keeps interest rates low to stimulate the economy, the more money it pulls out of the pockets of millions of savers. Among the most vulnerable are retirees, who have few options to restore lost income on investments built up over entire lifetimes.

In 2009, according to the most recent data available from the Labor Department, average annual investment income for the 24.6 million American households headed by people 65 and older amounted to $2,564. That figure is down 34% from 2007, and is the lowest since 2003. A recent survey by the Employee Benefit Research Institute indicated that one in three retirees had dipped deeper than planned into their savings to pay for basic expenses in 2010.

Most economists agree that the Fed’s interest-rate policies, together with other measures, have helped avert a much deeper economic slump. Still, the situation for savers has become progressively worse since the Fed first lowered its interest-rate target close to zero in late 2008.

As of January, the average interest rate paid on relatively safe vehicles such as short-term savings accounts, time deposits and money-market funds stood at only 0.24%. That’s one-tenth the level of late 2007 and the lowest on records dating back to 1959. Such depressed rates don’t come close to compensating for inflation, which was running at an annualized rate of 5.6% in the three months ended February.

Low rates don’t just hurt retirees. They also penalize people of any age hoping to build up funds for the future, and discourage rainy-day savings that could make U.S. consumers more resilient to job losses and other financial jolts. Americans’ net contributions to their financial assets, such as bank and 401(k) accounts, amounted to 4% of disposable income in 2010, according to the Fed. That’s the lowest level since it began maintaining records in 1946—except for 2009, when people actually pulled money out.


http://online.wsj.com/article/SB100...16830941163492.html?mod=WSJ_hp_LEFTTopStories

 

that's weak. Let's talk specifics or don't waste our time

 

The price of gold is a warning sign that a "monetary event" is headed this direction if current policies are not changed.

 

True. No one can argue that. Inflation hurts savers and retirees. Yes.

Everyone knows that.

But this dude is only pointing out one side of things. That's tells me he's not interested in the truth.

There is going to be a consequence for whatever the Fed does, or doesn't do. If these guys can't even acknowledge that the Fed had a reason for their course, then I don't have much respect for that.

 

Where in the Fed's original charter did it say they should juice the stock market...or even care how it perfoms?

"I do think that our policies have contributed to a stronger stock market, just as they did in March of 2009." - Bernanke earlier this year.

They've clearly created asset bubbles. You have Occam and his razor to dispute if you think otherwise. From housing in the early 2000s to commodities and the current stock rally that has no connection with valuations.

Simply put, with artificially-lowered rates and pathetic returns in "risk-free" investments, money will force its way into risky assets and create bubbles. 100 pages of Keynesiot equations and obfuscation from shills don't prove otherwise.

Also, to the inflation-deniers: have you been watching "prices paid" for the ISM and other surveys? And don't even bring up Core CPI. It's been less than real CPI more than 80% of the time for the last 11 years. (And even real CPI is probably understated.) "Core" has more to do with politics than reducing volatility, which is almost all on the upside.

 

I'll give you this, it's a bit like playing with fire. Everyone knows the risks and it can't go on indefinitely....maybe not even much longer. I don't know. But I think Bernanke has a better idea than I have.

it's almost like me criticizing the way a surgeon went about his operation. ...like he used to much sedative...and I'm gonna sit over here and say 'hey, too much sedative can be dangerous!' But, clearly he knows that. He obviously has more expertise than I have.

 

You can put your blind faith in Bernanke, but I surely don't. And sorry, but that's a terrible analogy. A real surgeon has had real-world training and (hopefully) performed many surgeries before you go to him. Bernanke has nothing but textbook exercises on how to prevent the next Great Depression. And since I dispute most of his assumptions, I have zero faith his ideas will work in the long-term in the real world.

While we’re at it, if Bernanke is such a great economic “surgeon,” why did he think sub-primes were no big deal and the worst was over in the summer of 2007? And why did he panic and shoot many of his bullets (i.e., rate cuts) after a trading snafu by a French bank?

I can tell you one thing—his instincts are horrible. He’s be an utter failure as a trader. You can also tell from his body language how uncomfortable and uncertain he really is.