Chairman Bernanke is the center of attention again today, and the American Press sitting idly by waiting for the God like figure of the Federal Reserve Chairman to speak holding there collective breath to hear the words from on high from the omnipotent money maker is at first confusing, but within seconds one can see with amusement just how comical the American economic game is played. Intertwine this comedy with politics, and you can see clearly that Bernanke, President Obama, and the willing sheep of CNN, Bloomberg, and even the Wall Street Journal, are willing participants in a failed economic set of rules that need to be abandoned, but will not be given the current power, and control the system as it stands, has over the nation, and the productive ability of the ordinary citizens in this country. After all the name of the game is power. Absolute control. A total dictate to the order of the economy based on flawed planning, ........ more importantly a flawed premise. The comedy is performed right before our eyes, only if you are not informed enough on the matter, it could pass right by you, and you would never know. Thank goodness for the means of communication we have today. Instant. Fast. Also verifiable. With knowledge we the people can end this monster in our lives.
Chairman Bernanke is hailed as a student of the Great Depression, and has written a number of critiques on the failed policies that were taken at the time that in his opinion exacerbated the situation. In fact one of his major critiques was the insistence of keeping the money and it's value tied to gold. That discussion is for another time, the point here is the good Chairman has concluded that the failure on the part of the Federal Reserve in the late 20's and early 30's was that not enough was done to prevent the bank failures from happening, liquidity ( read printed money ) was lacking to sustain the economy, and thus prop up the banks, and put capital into the market to keep the economy from suffering from deflation ( read a period of lowering prices ) . In total then what happened was the collapse of the economy, that never recovered until the start of World War II.
Ben is not the only student of the Great Depression, in fact his view is the popular view of all Centralist thinkers. The flaw in there thinking is that the consumer drives the demand for the economy. Nothing could be further from the truth. In fact Ben has never won a Nobel Prize for Economics. Hayek, and Mises have. A student of both of these Economist is Murray Rothbard. Murray has a completley different view of the Great Depression, and was just as ardent in his studies of the causes of the Depression. Mr. Rothbard and many students of the Austrian School of Economics have pointed out time and again, the failed economic premises of the likes of Ben Bernanke, and time and again history has proven the Austrians correct in the cause, and the solution to recessions, and or depressions. Perhaps that is why they have won Nobel Prizes. Just a thought.........
When the Central Bank prints more money to put liquidity into the system it sends a false signal to the rest of the economy via interest rates on the demand for Capital goods versus consumers goods. What happens with the newly created lower interest rates ( due to the money supply increase via the Federal Reserve ) is that the producers within the economy will switch there production preference from short term to long term goods. Think housing, machinery, equipment, etc., these goods take longer to produce thus the scarce resources in the economy become subject to higher production than the true demand for those items warrant. One reason there is a housing bubble in particular in the Commercial Real Estate market is due to the prolonged building that has taken place in the last 15 years, which is in large part due to easy credit, and low interest rates. That was directly a result of flooding the banks with money, both by Chairman Bernanke, and his predecessor Alan Greenspan. And as Rev. Wright was so colorful to point out, " America's chickens have come home to roost ".
It is encouraging to note that Governor Perry, and Congressman Bachmann have keyed into the danger that the Federal Reserve has caused in the malaise our economy is in. Couple that with 4 trillion dollar Congressional Budgets ( and then some ) and you see that the market being objective is reacting to the policies that the Chairman, and Congress refuse to do away with. For it would mean the end to their power over you and I, and as we see in Libya, and other nations, once there is an establishment that gets comfortable with power, the tendency to try to retain that power at all costs, including human life is the natural progression of that establishment. Power indeed is the most seductive thing on the planet, and known to man. History is replete with examples, so there is no need to pursue it here. Of course Ron Paul has been after the elimination of the Federal Reserve for many years. He has challenged the fiat money supply and it's detriment to the American public for as long, he has even publicly confronted Chairman Bernanke, and you know what I find most interesting................ no one has said that anything Congressman Paul has said is incorrect. Nor that what he has confronted the good Chairman with publicly is mistaken.
If we the American public wish to have sound money, and a sound economy, then perhaps we should do our part and elect officials that will represent those policies, for if we don't we can expect more of the same, and guess what, our standard of living will continue to fall even more, and China, and India will surpass our standard of living, and will have greater influence over affairs of State in the world, and that will be because they have the resources ( i.e. money ) to control such affairs. No country can yield power without money.......... the axiom is just as true today as it was yesterday............ he who has the gold, makes the rules....... it's just the way it is.
