But it is now clear that Geithner never believed his own talking points. To him, too-big-to-fail and the so-called moral hazard, or safety net, that it would create can’t really ever be fully taken away. During his lecture to Summers’s class, one student asked a question about “resolution authority,” a provision of the reform laws that is supposed to let the government wind down a complex financial institution without creating a domino effect. The question prompted Geithner onto a tangent about too-big-to-fail. “Does it still exist?” he said. “Yeah, of course it does.” Ending too-big-to-fail was “like Moby-Dick for economists or regulators. It’s not just quixotic, it’s misguided.” - From The New York Times Magazine article, What Timothy Geithner Really Thinks
Jim Rickards joined FoxBusiness for an excellent interview regarding Janet Yellen’s first months as Fed Chairwoman. Rickards informed the MSM viewers that The Fed has tapered into weakness, and explains why counter to what the BL(B)S report would have one believe, the labor force is falling off a cliff.
Perhaps Rickards tunes into the SD Metals & Markets, as he informs Diedra that he expects the Fed to end the taper by July, and increase asset purchases by 2014- something we have been predicting for over 6 months.
Rickards full interview is below:
Remember, the purpose of Quantitative Easing is to support the balance sheets of a few over-sized banks and to finance the federal budget deficit at an artificially low rate of interest. In other words, QE supports failed banks and federal fiscal irresponsibility. In order to successfully carry off this blatant misuse of public policy, the price of gold, a measure of the dollar’s value, must be suppressed. The Federal Reserve’s lack of integrity speaks volumes about the corruption of the US government (source link is below).
It was widely reported the other day when Bernanke gave a speech in Abu Dhabi for which he was paid $250,000.
While Bernanke’s visible speaking engagements are actively reported, I can guarantee you that he is conducting very private, non-disclosed meetings for which I’m sure he’s paid much higher “consulting fees” than his publicly announced speech compensation.
It’s not the news you see that should bother you, it’s the news that doesn’t get reported that is most dangerous.
Legendary gold expert Jim Sinclair has sent an email alert to subscribers warning that new Fed Chairwoman Janet Yellen will soon get the shock of a lifetime as the economy collapses in response to her convoluted forward guidance at the March FOMC meeting, resulting in the Fed being forced to kick quantitative easing into hyper stimulation of at least $4 trillion a year!
Sinclair’s full MUST READ alert is below:
For a variety of reasons, the Federal Reserve is viewed by many as the financial Master of the Universe. Given how the media hangs on every pronouncement and the visible power of the Fed’s policies to move markets, this view is understandable.
But suppose rather than being masters of all things financial, the Fed was actually little more than a collection of incompetents trapped in a broken system that is beyond repair.
No new business can borrow Fed money for zero interest. The only entities that can borrow the Fed’s free money are banks and other financial parasites.
The truth is the Fed incentivizes and rewards the most parasitic, least productive sector of the economy and forcibly transfers the interest that was once earned by the productive middle class to the parasites. Though the multitudes of apologists, lackeys, toadies, minions and factotums of the Fed will frantically deny it, the inescapable truth is that the nation and the bottom 99.5% would be instantly and forever better off were the Fed closed down and its assets liquidated.
The only way to eliminate the financial parasites is to stop subsidizing their skimming and scamming, and the only way to stop subsidizing the financial parasites is to shut down the Fed.
The Fed’s policies have been an unqualified success for financiers and an abject failure for the bottom 99.5% who have to work for a living.
After five long years of politicos and the financial media glorifying the Federal Reserve’s policies as god-like in their power and efficacy, let’s take a quick look at the results of these vaunted policies: ZIRP (zero interest rates), (QE) quantitative easing, both of which are ways of shoving nearly limitless, nearly-free money ( a.k.a. liquidity) into the banking sector, where all this free money is supposed to filter into the global economy, working miracles of prosperity.
Let’s start with a chart of the Fed’s balance sheet, which reflects just how much money the Fed has created and pumped into the financial system. $4 trillion is larger than the entire GDP of Germany, and roughly 25% of U.S. GDP.
Last week, Federal Reserve Chairman Janet Yellen testified before Congress for the first time since replacing Ben Bernanke at the beginning of the month. Her testimony confirmed what many of us suspected, that interventionist Keynesian policies at the Federal Reserve are well-entrenched and far from over. Mrs. Yellen practically bent over backwards to reassure Wall Street that the Fed would continue its accommodative monetary policy well into any new economic recovery. The same monetary policy that got us into this mess will remain in place until the next crisis hits.
Isn’t it amazing that the same people who failed to see the real estate bubble developing, the same people who were so confident about economic recovery that they were talking about “green shoots” five years ago, the same people who have presided over the continued destruction of the dollar’s purchasing power never suffer any repercussions for the failures they have caused?
Ben Bernanke believed that the financial crisis of 2008 produced the need for strong but temporary action to be taken by the Fed. His focus was on providing liquidity to the financial system, as a substantial but temporary strategy.
In contrast, Janet Yellen believes in the Phillips Curve. In the 1950s, William Phillips suggested that there is an inverse relationship between inflation and unemployment, and his ideas are used extensively by Keynesian economists.
The bottom line is that Dr. Yellen is a strong Keynesian who is now in charge of America’s central bank. She believes that real unemployment will fall significantly, if she raises the inflation rate. (Yes, you read that correctly)
That has the attention of powerful institutional money managers, and it should have the attention of everyone in the gold community.
The second tapering reduction, a further $10bn per month, was announced this week. It was we are told by the news channels fully expected. This is probably the initial reason why US Treasury prices rose on the news, because bears would have bought back their positions. However, weakness in emerging market currencies indicates that there is a safe-haven element developing in US Treasury bond prices.
Of course the gold and silver markets are manipulated. You have to be either blind or a Harvard Graduate with doctorate in Economics to ignore the fact.
Central Bankers like Allan Greenspan and Ben Bernanke know all about gold, they just don’t express it while they are central bank presidents in office.
When I asked former Dutch Central banker Nout Wellink what he would do if QE proved to be irreversible, in fear of a deflationary collapse, and QE III, IV, etc. would become apparent, he said that he would put his wealth in to physical gold because that would be the most prudent thing to do.
I thought that was a remarkable revelation from the man who in early 2011 forced a Dutch pension fund via a court order to sell most of its gold because it was “not in the interest of the people that were depending on the fund”.
With Ben Shalom Bernanke set to depart on the last day of January 2014, the critique and speculation of his tenure as Chairman of the Federal Reserve begins. The mainstream financial press is giving mostly favorable accounts. Heretofore, such praiseworthy acclamations strike a shape contrast with the actual record of the state of the economy. However, the admirers of the Fed and his specific enactments live in a time warp that only masters of the universe encounter. For the remaining population, an intense struggle for survival is the actual experience, remembered from the Bernanke years.
During the Bernanke era, the debt bubble entered the point of no return to solvency. His place in the history of shame sets the stage for further economic turmoil. The Fed is boxed into a pattern that is likely to escalate out of control.