Topic: Economics
Bernanke’s Interest Rate Cuts Commentary on Bernanke's folly and the FED's aim to seize private assets.by jposty
(Libertarian)
Monday, February 18, 2008
Bernanke has cut interest rates 2.25% since September and plans to cut them at least another half-point by mid March. Some presidential candidates (McCain) said he should have cut levels lower and responded quicker during the initial phase of this economic downturn. I find it extremely hard to believe Bernanke doesn't know he is just staving off an all-out recession. He is continuing a bad business cycle and is essentially lowering the dollar's value on the world market. He argues that it will make our currency more competitive which will allow poorer nations access to it and possibly increase our export levels.
Should the FED's chief concern during their closed-door sessions be whether or not poorer nations have access to our dollar or should they be more concerned with the cost of importing goods becoming increasingly more expensive?
Their true motive unfortunately, is far more sinister. Bernard Connolly, global strategist at Banque AIG in London, suggests the FED change their laws and begin to buy privately held US stock and other assets to avoid an all out recession. On the surface that might seem like a good idea, however, the implementation of this idea should raise several red flags. The FED will not simply purchase the assets at current levels, it will either artificially manipulate the price or use an old government trick usually associated with eminent domain to give the organization or person fair market value'. The government's use of fair market value' should really read we are going to sieze this asset from you and give you tenths a penny on the dollar.
Other questions would then need to be asked, how long will they hold these assets, will they be sold after the FED deems the recession over, if so how will they be sold? Through an open competitive market or by Washington's beloved practice of cronyism. The assets essentially stolen from their private owner will be sold off en masse through no-bid government contracts. This will further put power and money into the top 1% of the population.
The FED knows what it is doing and is looking out for its best interest as a corporation rather than acting like the bank, mint and treasurer of the United States of America.
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2008 jposty, all rights reserved.
Published: Monday, February 18, 2008
Last modified: Monday, February 18, 2008
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What you've just told us is truly frightening. Thank you for posting it. May the Lord save the US from such 'leadership,' because no one down here seems to be able to stop it.
If I could just go back into the rabbit hole where I had no idea what the Fed Reserve was doing to our economy, I would. It is so frustrating to see our nation's "economic leaders" impose their will on Congress and the American people for their own gain. Ron should propose a bill that opens the books of the Fed Reserve - let journalists investigate, see if it is as bad as we fear - and if so maybe we could then motivate the apathetic masses...just maybe.
"Avoiding a depression is, unfortunately, going to have to involve either a large, quasi-permanent increase in the budget deficit -- preferably tax cuts -- or restoring overvaluation of equity prices," Connolly said on Monday.
His solution is to restore the overvaluation of equity prices by allowing the Fed to artifically "re-inflate" them.
Call me crazy, but doesn't that just start the bubble all over again.
Maybe I don't know what I'm talking about.... but what happens when THAT bubble pops, except now instead of Citibank taking writedowns, the federal government and our entire monetary system bursts when the financial world and the rest of the world realizes Uncle Sam isn't AAA anymore?
Inflation or no Inflation. The treasury can print all the money it wants, but if nobody is willing to accept it it doesn't do any good.
Interesting, but jposty leaves out Bernanke's ill advised ratcheting-up of interest rates when he first assumed his post at the FED, the policy which was unnecessary and CAUSED the crisis! Most likely, Bernanke gave in to the constant pressure of the Fed Member banks for higher rates without considering the consequences. He should be asked to resign.
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Bernanke has cut interest rates 2.25% since September and plans to cut them at least another half-point by mid March. 
2008 jposty, all rights reserved.