18th May 2014

 

“Although low infla­tion is gen­er­al­ly good, infla­tion that is too low can pose risks to the econ­o­my – espe­cial­ly when the econ­o­my is strug­gling.” — Ben Bernanke

“The true mea­sure of a career is to be able to be con­tent, even proud, that you suc­ceed­ed through your own endeav­ors with­out leav­ing a trail of casu­al­ties in your wake.” – Alan Greenspan

There you have it – the wis­dom of two Ivy League edu­cat­ed econ­o­mists who are pri­mar­i­ly liable for the death of the Amer­i­can mid­dle class. They now receive $250,000 per speak­ing engage­ment from the crooked finan­cial par­ties their mon­e­tary poli­cies ben­e­fit­ed; write books to try and white­wash their lega­cies of fail­ure, fraud, and hubris; and bask in the glow of the cor­po­rate main­stream media pro­pa­gan­da sto­ry­line of them sav­ing the world from finan­cial Armaged­don. Nev­er have two men done so much dam­age to so many peo­ple, so quick­ly, and are not in a prison cell or swing­ing from a lamp­post. Their crimes make Mad­off look like a two bit mar­i­jua­na dealer.

The self-pro­claimed Great Depres­sion “expert” Ben Bernanke ped­dles pab­u­lum about infla­tion being too low and pos­ing dire risk to the econ­o­my, but is blasé that swelling the Fed­er­al Reserve bal­ance sheet debt from $900 bil­lion in 2008 to $4.4 tril­lion today with his dig­i­tal print­ing press pos­es any sys­tem­at­ic risk to the coun­try and its cit­i­zens. Either his years in acad­e­mia have blind­ed him to the real­i­ty of his actions upon the lives of real peo­ple liv­ing in the real world, or his real con­stituents have not been the Amer­i­can peo­ple, but the Wall Street bankers that pulled his pup­pet strings over the last eight years.

Now that he has passed the Control‑P but­ton to Yellen, he is reap­ing the rewards of bail­ing out Wall Street and fur­ther enrich­ing them with QEfin­i­ty. Ben earned a whop­ping $200,000 per year as Fed­er­al Reserve chair­man. He now rakes in $250,000 per speech from the very finan­cial inter­ests who ben­e­fit­ed from his trai­tor­ous mon­e­tary machi­na­tions. I don’t think he will be invit­ed to speak at any lit­tle league ban­quets by for­mer­ly mid­dle class par­ents whose stan­dard of liv­ing has been declin­ing since the 1980s. Is it a require­ment that every Fed­er­al Reserve chair­per­son lie, obfus­cate, mis­in­form, hide the truth, and do the exact oppo­site of what they say they will do?

“It is not the respon­si­bil­i­ty of the Fed­er­al Reserve – nor would it be appro­pri­ate – to pro­tect lenders and investors from the con­se­quences of their finan­cial deci­sions.” — Ben Bernanke – Octo­ber 2007

Greenspan, Bernanke and Yellen have always been wor­ried about defla­tion, while even the gov­ern­ment sup­pressed CPI cal­cu­la­tion reveals that infla­tion has risen by 108% since the day Greenspan assumed office in August 1987. The dol­lar has lost 52% of its pur­chas­ing pow­er in the last 27 years of Fed induced bub­bles and busts. And these schol­ar­ly aca­d­e­m­ic bozos have been wor­ried about defla­tion the entire time. Since Nixon closed the gold win­dow in 1971 and unleashed the two head­ed infla­tion lov­ing gar­goyle of debt issu­ing bankers and feck­less self-serv­ing politi­cians upon the Amer­i­can peo­ple, the dol­lar has lost 83% of its pur­chas­ing pow­er (even using the bas­tardized BLS figures).

Any crit­i­cal think­ing per­son with their eyes open knows the offi­cial infla­tion fig­ures have been sys­tem­at­i­cal­ly under­stat­ed since the 1980’s by at least 3% per year. Should the aver­age Amer­i­can be more wor­ried about defla­tion or infla­tion, based upon what has occurred dur­ing the 100 years of the Fed­er­al Reserve con­trol­ling our currency?

I’m sure Greenspan is con­tent and proud, as he suc­ceed­ed through his own endeav­ors in reward­ing, encour­ag­ing and prop­a­gat­ing exces­sive risk tak­ing by the Wall Street cabal dur­ing his 19 year reign of error. He exit­ed stage left as the biggest bub­ble in his­to­ry, cre­at­ed by his exces­sive­ly low inter­est rate pol­i­cy, blew up and destroyed the 401ks and home val­ues of the mid­dle class. This was the sec­ond bub­ble under his mon­e­tary guid­ance to burst. The third bub­ble cre­at­ed by these Key­ne­sian acolytes of easy mon­ey will burst in the near future, fur­ther impov­er­ish­ing what remains of the mid­dle class and hope­ful­ly ignit­ing a long over­due revolution.

Greenspan’s pathet­ic excuse for a career has ben­e­fit­ed those who owned him, while leav­ing a trail of casu­al­ties that cir­cles the globe. His infla­tion­ary dog­ma, Wall Street enrich­ing doc­trine and Key­ne­sian moti­vat­ed schemes have drained the sav­ings and con­fis­cat­ed the wealth of the mid­dle class through per­sis­tent and dev­as­tat­ing infla­tion. And it was done by a man who knew exact­ly what he was doing.

“Under the gold stan­dard, a free bank­ing sys­tem stands as the pro­tec­tor of an economy’s sta­bil­i­ty and bal­anced growth… The aban­don­ment of the gold stan­dard made it pos­si­ble for the wel­fare sta­tists to use the bank­ing sys­tem as a means to an unlim­it­ed expan­sion of cred­it… In the absence of the gold stan­dard, there is no way to pro­tect sav­ings from con­fis­ca­tion through infla­tion” – Alan Greenspan – 1966

The aban­don­ment of the gold stan­dard in 1971 set in motion four decades of con­sumer debt accu­mu­la­tion on an epic scale, cur­ren­cy debauch­ment, and real wage stag­na­tion. The con­sumer debt accu­mu­la­tion was a con­se­quence of the Amer­i­can mid­dle class being lured into debt by the Too Big To Trust Wall Street banks and their cor­po­rate media pro­pa­gan­da machine, as a fal­la­cious response to stag­nat­ing real wages when their jobs were shipped to Chi­na by mega-cor­po­ra­tions using wage arbi­trage to boost quar­ter­ly prof­its, their stock prices, and exec­u­tive bonuses.

The bot­tom four quin­tiles have made no progress over the last four decades on an infla­tion adjust­ed basis. The mid­dle quin­tile, rep­re­sent­ing the mid­dle class, has seen their real house­hold income grow by less than 20% over the last 43 years. And this is using the under­stat­ed CPI. In real­i­ty, even with two spous­es work­ing today ver­sus one in 1971, real house­hold income is low­er today than it was in 1971.

The more recent data, dur­ing the Greenspan/Bernanke infla­tion­ary era, is even more dis­con­cert­ing and destruc­tive. Real medi­an house­hold income has grown at an annu­al­ized rate of less than 0.5% over the last thir­ty years. Dur­ing the bub­b­li­cious years from 2000 through 2014, while Wall Street used con­trol fraud and vir­tu­al­ly free mon­ey pro­vid­ed by the Fed to siphon off hun­dreds of bil­lions of ill-got­ten prof­its from the econ­o­my, the aver­age mid­dle class fam­i­ly saw their income drop and their debt load soar. This is crony cap­i­tal­ism suc­cess at its finest.

The oli­garchs count on the fact math chal­lenged, iGad­get dis­tract­ed, Face­book focused, pub­lic school edu­cat­ed morons will nev­er under­stand the impact of infla­tion on their dai­ly lives. The pli­ant co-con­spir­a­tors in the dying lega­cy media regur­gi­tate nom­i­nal gov­ern­ment report­ed income fig­ures which show medi­an house­hold income grow­ing by 30% over the last four­teen years. In real­i­ty, the real medi­an house­hold income has FALLEN by 7% since 2000 and 7.5% since its 2008 peak. Again, using a true infla­tion fig­ure would yield declines exceed­ing 15%.

Greenspan and Bernanke’s mon­e­tary poli­cies loaded the gun; Wall Street bankers cocked the trig­ger with their no doc neg­a­tive amor­ti­za­tion mort­gages, $0 down – 0% inter­est – 7 year sub­prime auto loans, intro­duc­ing the home equi­ty line ATM, and $20,000 lines on dozens of cred­it cards; the media mouth­pieces par­rot­ed the stocks for the long run and home prices nev­er fall bull­shit sto­ry­line, encour­ag­ing Amer­i­cans to pull the trig­ger; gov­ern­ment appa­ratchiks and bought off politi­cians and their deficit expand­ing fis­cal poli­cies, point­ed the gun; and the Amer­i­can peo­ple pulled the trig­ger by believ­ing this non­sense, blow­ing their brains all over their leased BMWs in the dri­ve­way in front of their under­wa­ter McMansion.

Medi­an house­hold income in the Unit­ed States peaked in 1999. The inter­net boom, hous­ing boom and now QE boom have done noth­ing ben­e­fi­cial for mid­dle class Amer­i­cans. They have been left with low­er real income, less home equi­ty, no sav­ings, and no hope for a bet­ter tomor­row. Most states saw their medi­an house­hold income peak over a decade ago, with more than half the states expe­ri­enc­ing dou­ble dig­it declines and ten states expe­ri­enc­ing declines of 19% or high­er. It’s clear who has ben­e­fit­ted from the fis­cal poli­cies of spend­thrift politi­cians and the spine­less inhab­i­tants of the Mariner Eccles Build­ing in the squalid swamp­lands of Wash­ing­ton D.C. – the pond scum inhab­it­ing that town. The medi­an house­hold income in D.C. stands at an all-time high. Winning!!!!

A for­mer inhab­i­tant of Wash­ing­ton D.C. spoke the truth about infla­tion and the men who ben­e­fit from it in the 1870’s. He was lat­er assassinated.

“Who so ever con­trols the vol­ume of mon­ey in any coun­try is absolute mas­ter of all indus­try and com­merce and when you real­ize that the entire sys­tem is very eas­i­ly con­trolled, one way or anoth­er, by a few pow­er­ful men at the top, you will not have to be told how peri­ods of infla­tion and depres­sion orig­i­nate.” – James Garfield

The Fed­er­al Reserve, a pri­vate bank rep­re­sent­ing the inter­ests of its Wall Street own­ers, has been in exis­tence for 100 years. It has man­aged to dimin­ish the pur­chas­ing pow­er of the dol­lar by 95%, while caus­ing depres­sions, enabling nev­er end­ing war­fare, allow­ing politi­cians to expand the wel­fare state to immense unsus­tain­able pro­por­tions, and enriched its true con­stituents on Wall Street beyond the com­pre­hen­sion of aver­age Amer­i­cans. In 2002 Ben Bernanke made his famous heli­copter speech where he promised to drop dol­lars from heli­copters to fight off the ever dan­ger­ous defla­tion. After the Fed cre­at­ed 2008 world­wide finan­cial col­lapse he fired up his heli­copters, but dropped tril­lions of dol­lars on only one street in Amer­i­ca – Wall Street. He dropped turkeys on Main Street, and we all know from Les Nes­man what hap­pens when you drop turkeys from helicopters.

Les Nes­man: Oh, they’re crash­ing to the earth right in front of our eyes! One just went through the wind­shield of a parked car! This is ter­ri­ble! Everyone’s run­ning around push­ing each oth­er. Oh my good­ness! Oh, the human­i­ty! Peo­ple are run­ning about. The turkeys are hit­ting the ground like sacks of wet cement! Folks, I don’t know how much longer… The crowd is run­ning for their lives.

The intel­lec­tu­al turkeys run­ning this treach­er­ous insti­tu­tion cre­ate a new and larg­er cri­sis with each suc­ces­sive­ly des­per­ate gam­bit to keep their Ponzi scheme alive. Even though Greenspan, Bernanke and Yellen are high­ly edu­cat­ed, they are inca­pable or unwill­ing to focus on the prac­ti­cal long-term impli­ca­tions of their short-term mea­sures to keep this per­vert­ed finan­cial scheme from implod­ing. Den­i­grat­ing sav­ings and cap­i­tal invest­ment, while urg­ing debt financed spend­ing on for­eign pro­duced trin­kets and gad­gets pass­es for eco­nom­ic wis­dom in the wan­ing days of our empire. Coura­geous and truth­ful lead­ers are nowhere to be found as the coun­try cir­cles the drain. Farewell mid­dle class. It was nice know­ing you.

“There are men regard­ed today as bril­liant econ­o­mists, who dep­re­cate sav­ing and rec­om­mend squan­der­ing on a nation­al scale as the way of eco­nom­ic sal­va­tion; and when any­one points to what the con­se­quences of these poli­cies will be in the long run, they reply flip­pant­ly, as might the prodi­gal son of a warn­ing father: “In the long run we are all dead.” And such shal­low wise­cracks pass as dev­as­tat­ing epi­grams and the ripest wis­dom.” – Hen­ry Hazlitt – Eco­nom­ics in One Lesson