For several years now I have been sounding the alarm that if you want to be engaged in the financial markets you need to assume that markets are being managed (rigged) more aggressively than at any moment in any of our lives. The Bernank and others on Wall Street and the District of Criminals understand that the situation is pretty much hopeless. Ever since 2008 they have had one strategy. From a monetary and fiscal standpoint, that strategy has been to pump massive amounts of liquidity into the system while at the same time borrow enormous amounts of money. The thinking was that this would stabilize the situation, create confidence and thus ultimately a dynamic sustainable recovery. They certainly bought a few years with this plan but confidence has not returned, nor has there been any sustainable recovery. What we need to understand at the moment is that The Bernank and all of his fellow Keynesian Central Planning magicians know that they have failed. This is why he is running around on college campuses presenting his sad and intellectually dishonest presentation of propaganda that even a six year old could refute. In fact several people have done just that. Here is one good article on it. Moreover, Jim Grant recently gave an incredible speech at the belly of the beast itself -The New York Federal Reserve –where he completely undresses the Fed right to their face. You must read this one.
So what we need to understand is that we are in one of the most dangerous phases of this crisis at the moment. The priests of fiat are being attacked from all sides. People have awoken to the Fed and how criminal and deceitful this organization is and the existential threat it poses to economic freedom and hence human liberty. The arguments against the Fed are blistering and the only rebuttal the Fed has is to spout the same old nonsense like “we saved the world” or some trite derivative of this fallacy. The only thing they saved are untalented speculators from their bad bets. What the Fed has systematically done is literally transfer all of the bad debts and bets from the banks to the taxpayer. We are living this reality to this day. This fact is becoming increasingly understood throughout society, hence the emergence of the tea party and then last year’s Occupy Wall Street movement. So the thing I want my readers to really internalize is that the Fed and indeed TPTB generally are getting slaughtered in the intellectual arena and they know it. As a result, they feel cornered and will thus act increasingly aggressive to prove they are right and everyone else is wrong.
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As I have said many, many times before, The Bernank needs to create more money and he knows it. He is irate beyond belief that his academic theories have not worked. He is furious that he can’t make the housing market come back to life. He is having a temper tantrum that people actually have the nerve to link printing trillions of dollars to the rise in commodity prices. He wants to launch QE3 this quarter but he feels like public opinion is against him (he’s right) and Obama is having his own little panic attack about gasoline prices and the election. So what’s a Central Planner to do? Well, exactly what they have been doing as of late. Lie.