OPINION Nobel firefighting prize awarded to convicted arsonist by Tiana Lowe, Commentary Writer | October 11, 2022 10:41 AM Biden creates new national monument in Colorado, restricting use of lands[/paste:font] October 12, 2022 11:02 AM What are the chances of an exchange of ‘low-yield’ nuclear weapons with Russia? October 12, 2022 11:00 AM The same Nobel Committee that once awarded Henry Kissinger its peace prize just awarded its economics prize to Ben Bernanke, the architect of the quantitative easing experiment that is plunging the world economy into its current nightmare. What’s next? A peace prize for Vladimir Putin? A medicine prize for the Wuhan Institute of Virology? The Nobel Committee did not directly award Bernanke for his disastrous tenure as chairman of the Federal Reserve nor his work produced while cashing out to Citadel, the hedge fund famous for its big short squeeze of GameStop. Rather, Bernanke was lauded for his 1983 paper on the Federal Reserve’s role in exacerbating the Great Depression. MANUFACTURING GAUGE FALLS TO LOWEST LEVEL SINCE START OF PANDEMIC AS FED HIKES KICK IN Building upon the central thesis of the great classical monetarists Milton Friedman and Anna Schwartz, Bernanke’s research argued that the Fed had been insufficiently aggressive, letting banks fail and the money supply tighten during a profound economic contraction. It was this research that informed Bernanke’s delusion that zero ought not to be a limit for interest rates during a monetary intervention. Instead, the Fed would inject trillions into the economy beyond that point. His fed, beyond just stabilizing the mortgage industry in the immediate aftermath of the Great Recession, went on with endless quantitative easing, purchasing billions, and then trillions, in Treasury bonds from the big banks. It is that landscape of near-zero interest rates and QE exacted over a decade and during the longest bull market in history, that the Fed began its final stage of the experiment at the beginning of the pandemic: printing 40% of all dollars in circulation in the short time since. We all know how that story ends. Despite the economy contracting for two consecutive quarters, usually called a “recession," inflation has hit the highest point since Paul Volcker was forced to jack up interest rates into the double digits. Under Jerome Powell’s leadership, our own interest rates are only slated to hit 4% by the end of the year, and even so, global markets inflated and accustomed to the Bernanke treatment are on the precipice of collapse. It’s not as though the inevitable consequences of Bernanke’s hubris eluded all of his contemporaries. In fact, it was none other than Schwartz who authored the definitive case against a second term as Fed chairman for Bernanke all the way back in 2009. “Mr. Bernanke seems to know only two amounts: zero and trillions,” Schwartz wrote for the New York Times at 94 years old. “Before 2008 there were only moderate increases in the Federal Reserve’s aggregate balance sheet numbers, but since then the balance sheet has exploded by trillions of dollars. The increase was spurred by the Fed’s loans to troubled institutions and purchases of securities. Why is easy monetary policy such a sin? Because in such an environment, loans are cheap and borrowers can finance every project that they dream up. This results in excesses, and also increases the severity of the recession that inevitably follows when the bubble bursts.” More than a decade later, Schwartz is dead and Bernanke is a millionaire, enriched not just during his government service but again at Citadel and Pimco — another investment firm that “made a killing” partnering with the Fed’s bond-buying rampage. The rest of us are stuck dealing with the fallout.
%% I CAN hardly wait 'till time closer to NOV st elections\ dems ads could go like ; Nothing from nothing leaves nothing\ i'm not trying to be your hero\ 'cause that zero is too close to me. Nothing ....Song, Billy P\ Pop Top Records 1974
In the 90's I read dozens of books on the ill-gotten gains of fractional-reserve banking and how these banking entities literally control the world. I only regret I did not have the same mindset I now follow to make as much money as possible. I spent too much time and energy concerned with elements I had no control to change. Never again.
Plus, there's more. Vote DEM and you may be the recipient of a Nuclear Exchange "Holocost". Isn't that wonderful? At least, that's what our current POTUS is promising. Most candidates promise very mundane things, like jobs. But Biden is saying we may have a NUCLEAR HOLOCOST. Are there really people who want that? DEMs are giant war mongers (ever heard of the Vietnam War?) * Of which LBJ was the driving force (with Robert McNamara) Here's LBJ in the 1964 Presidential election telling people that DEMS are the sane ones. Of course this nuclear exchange never happened in the 1960s. But Biden seems very comfortable with having one. Seems everybody has lost their minds. * I have noticed that there is no longer any North Vietnam and South Vietnam. There is just Vietnam. Does that mean that the entire violent conflict was for nothing, including more than 50K American soldier deaths ?? And how many guys were not killed but just maimed. Do they get any satisfaction "Yeah, but it was for a good cause" I used to know a guy who had so much Agent Orange on him his skin was two tone. How was that not a total waste, and a colossal blunder (or corruption) by the White House and State Department.
Do not understand this year noble prize in economics as it is a nobrainer what they said. Nothing special at all. And for that pieces they get such a prize, I mean it totally oversized for that. The book " This Time Is Different: Eight Centuries of Financial Folly" from Carmen Reinhart and Kenneth Rogoff (Harvard) is far better.
%% Hard to say which was more crooked; Pres LBJ or Rich price meddler\impeached almost- Nixon. Silver is scarce , said L-liarBJohnson''There will be no value of holding them out of circ....'' I also like the sarcastic Pres ad with Mr Nixon flashing a ''V'' with his fingers '' Victory/he kept our boys out of Northern Ireland''
Well, the rumor mill back a few decades ago held that LBJ became a very wealthy man. His wife already had bucks (radio stations), so he was just playing catch-up. And the rumor was that LBJ was the recipient of large "gifts" from defense contractors. Along with 52K deaths, the armaments bill was in the billions. Raytheon and folks like that. Imagine somebody getting rich while somebody's else's son is getting murdered or maimed. People come in all shapes and sizes, especially career politicians.
The second sentence is true as written. What the average reader will miss is that borrowers did not appear to "... finance every project they dream up". Had they, QE would have been moderated commensurate with the demand for credit. Monetary policy may sometimes be a matter of selecting the least worst from the options available. I'll also take this opportunity to point out that QE does not involve any net new "printing" as many here erroneously believe. QE's immediate effect on both the assets of the private sector and the net worth of the central bank is zero. If you treat the Treasuries bought by the Central Bank as Treasury liability and a Central Bank asset, and the corresponding amount credited to private sector bank reserves as a central bank liability and a private sector asset, then QE causes the Central banks liability increase identically with their assets. The central banks net worth is left unchanged. The Private sectors assets are likewise unchanged. Treasuries were swapped for reserves at the current market price. The long term affect is a net decrease in the Treasuries future liability if the central bank holds their Treasuries to maturity. Then the principal and interest less central bank expenses, flow right back to the Treasury! The only true net printing occurs when the Congress spends in deficit and the government chooses to finance its deficit spending via printing, instead of real borrowing from the private sector, as it seldom, if ever, does nowadays.
It's ok everyone. Biden has a new plan, we won't print more money going forward. The new plan is to FORGIVE every and all debts. It really is that simple & easy! See? Even an old-timer with Alzheimers can do it!
Well, easy for you to say, especially now in hindsight. I don't think Bernanke and his cronies even had any concrete plans in the pipeline. All they knew was that they couldn't afford to repeat the mistakes of 1929 and somehow they had to save the Wall Street...AT ANY COST.