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This article has two parts.  The first is Bernanke's waarnign to Congress that the Federal debt is out of control and they need to raise taxes AND cut spending.  The second part however is far more interesting.  Author Greg Hunter describes the Bloomberg Media court quest to force the Fed to reveal which banks received $2 trillion in bailout money and why.  Bernanke of course is fighting in the courts to keep this secret.   excerpts:  Earlier this week, Fed Chief Ben Bernanke told Congress to basically raise taxes and cut the federal budget.  The inference was, if Congress doesn't get its financial house in order, it will be their fault if the economy tanks.  Here is how Bernanke actually said it, ". . . Maintaining the confidence of the public and the financial markets requires policy makers more decisively to put the budget on a sustainable fiscal balance."   Bernanke also said the federal debt ". . .is already expected to be greater than 70%" of Gross Domestic Product, ". . . at the end of 2012."  And if that is not bad enough, Bernanke said that by 2020, ". . .federal debt would balloon to more than 100% of GDP," provided  taxes are not raised and budgets are not cut.  The Fed was sued by financial news network Bloomberg two years ago.  Bloomberg wants the Fed to reveal which banks received $2 trillion in bailout money and why.  Bloomberg won the case and the Fed appealed.  Bloomberg, also, won the appeal in March 2010!  The precedent setting case would force the Fed to reveal the details of secret bank bailouts-including $500 billion given to foreign financial firms!!    In a Bloomberg story earlier this week, lawyers representing the Federal Reserve (which is made up in part by big U.S. banks) said, "U.S. commercial banks will take their fight against disclosure of Federal Reserve (documents) in 2008 to the Supreme Court if necessary . . ."  Lawyers representing the Fed say they are worried that if details of tril

Incredible must read for all Americans. excerpt: By the end of March, Barack Obama's administration will face its destiny, its Brutus a pawn of the fates. In Jimmy Carter's presidency, the Wall Street Journal editorialized about "Ratcheting to Ruin." The title derived from the fact that each cycle high in unemployment was higher than previous ones, and each cycle high in inflation was also. "Stagflation" was the neologism coined to describe what up until then was believed to be impossible in the Keynesian world. This period ushered in a new era in both politics and economics. Carter was replaced by Reagan, and Keynes was replaced by Friedman. Thirty years later, Keynes is back in vogue, Obama has ascended to the White House, and times are reminiscent of the Carter era. The economy is awful. Fear and dissatisfaction prevail. Politicians are held in contempt. There is one major difference -- Carter did not face an "ides of March" event. ..... The problem is bigger than the numbers above might suggest. Budget forecasts show that the problem increases over time. In addition, 40% of existing debt matures in the next year. That means $2.8 trillion of debt has to be refinanced. The Treasury must sell on average $90 billion of debt a week! In five weeks, we need to sell $450 billion. That is equal to the largest full-year deficit in history, at least until Obama's first year. There are no plans to curb spending or cut deficits. President Obama just increased the debt ceiling by $1.9 trillion. To outsiders, we appear like a banana republic with ICBMs. Does anyone seriously believe that funding based on "the kindness of strangers" is workable much longer? ..... If Bernanke stops QE, he fulfills his role as an independent central banker. Presumably, that action stops the decline in the dollar and reduces the risk of future inflation. It was the course that Paul Volcker chose in the late 1970s. Volcker's action was bold, highly controversial, and highly criticized. Vol

Incredible must read analysis. Take away: the world is going to go "medevil". It's the only way out of this mess. Since the zero hedge layout is so bad, i'm going to post as much of the article as Diigo will allow: Jim Kunstler's 2014 Forecast - Burning Down The House Submitted by Tyler Durden on 01/06/2014 19:36 -0500 Submitted by James H. Kunstler of Kunstler.com , Many of us in the Long Emergency crowd and like-minded brother-and-sisterhoods remain perplexed by the amazing stasis in our national life, despite the gathering tsunami of forces arrayed to rock our economy, our culture, and our politics. Nothing has yielded to these forces already in motion, so far. Nothing changes, nothing gives, yet. It's like being buried alive in Jell-O. It's embarrassing to appear so out-of-tune with the consensus, but we persevere like good soldiers in a just war. Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical "recovery" and the "shale gas miracle" on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations. Life in the USA is like living in a broken-down, cob-jobbed, vermin-infested house that needs to be gutted, disinfected, and rebuilt - with the hope that it might come out of the restoration process retaining the better qualities of our heritage.

Excellent summary of how deep the hole the Federal Reserve has dug for Americans.  Walks us from the 2008 crisis to the Levy Economics Institute $29.616 Trillion Bankster Bailout.  Incredibly well written commentary. excerpt: Bernanke argues we should look only at the lending at a peak instant of time. Think about it this way. A half dozen drunken sailors are at the bar, and the bartender refills their shot glasses with whiskey each time a drink is taken. At any instant, the bar-keep has committed only six ounces of booze. That is a useful measure of whiskey outstanding. But it is not useful for telling us how much the drunks drank. Bernanke would like us to believe that if the Fed newly lent a trillion bucks every day for 3 years to all our drunken bankers that we should total that as only a trillion greenbacks committed. Yes, that provides some useful information but it does not really measure the necessary intervention by the Fed into financial markets to save Wall Street. And that leads to the final way to measure the Fed's commitments to propping up our drunks on Wall Street: add up every single damned loan, guarantee and asset purchase the Fed made to benefit banks, banksters, real Housewives on Wall Street, fraudsters, and their cousins, aunts and uncles. This gives us the cumulative Fed commitments. The final important consideration is to separate "normal" Fed actions from the "extraordinary" or "emergency" interventions undertaken because of the crisis. That is easier than it sounds. After the crisis began, the Fed created a large alphabet soup of special facilities designed to deal with the crisis. We can thus take each facility and calculate the three measures of the Fed's commitments for each, then sum up for all the special facilities. And that is precisely what Nicola Matthews and James Felkerson have done. They are PhD students at the University of Missouri-Kansas City, working on a Ford Foundation grant under my direction, titl

"America Is Exhibiting All of the Signs of a Failing Empire Posted on October 10, 2015 by WashingtonsBlog The American Empire Is Quickly Declining Consummate insider Colonel Lawrence Wilkerson - former chief of staff to Colin Powell, and now distinguished adjunct professor of Government and Public Policy at William & Mary - notes that the U.S. is exhibiting all of the signs of a failing empire, including: Relying on massive military force (and using gigantic complexes to support it) as the be-all and end-all of power, and belittling diplomacy Maintaining standing armies, instead of disbanding military forces between wars Using more mercenary forces than citizen troops Spending disproportionately large amounts of blood and treasure in order to counter threats on the status quo … which simply exacerbates the threat against the empire Going ethically and morally bankrupt Ending up up having bankers and financiers end up running the real power Suffering great hiccups in finance and trade The leaders no longer really believe in or follow the ideals of the founders"

The 1 hour-25 minute video talk is well worth listening to. Col. Wilkerson is now a professor who has deeply studied the decline of empires. He speaks from deep knowledge both as a former insider and as a scholar about the state of the American Empire. But notice that the linked page has two copies of the same talk embedded. Don't bother watching both unless you want to hear it twice. :-)

By Mark McHugh The pending reappointment of Ben Bernanke as chairman of the Federal Reserve is the non-story of the Century, and I find this terrifying.  Propaganda of his alleged "success" has been crammed in every orifice of the American people by the rich and shameless (yet relatively few believe it).   This is truly the time for action, unless you really enjoy Tea-partying 'til you puke.  I'm asking every American to demand that their Senators stand up and oppose the nomination.  Our future depends on it.   Contact your Senator Sign Bernie Sanders' Petition To Prevent Bernanke's Reappointment >>

"Warren Buffett once referred to derivatives as "financial weapons of mass destruction", and it was inevitable that they would begin to wreak havoc on our financial system at some point.  While things may seem somewhat calm on Wall Street at the moment, the truth is that a great deal of trouble is bubbling just under the surface.  As you will see below, something happened in mid-September that required an unprecedented 405 billion dollar surge of Treasury collateral into the repo market.  I know - that sounds very complicated, so I will try to break it down more simply for you.  It appears that some very large institutions have started to get into a significant amount of trouble because of all the reckless betting that they have been doing.  This is something that I have warned would happen over and over again.  In fact, I have written about it so much that my regular readers are probably sick of hearing about it.  But this is what is going to cause the meltdown of our financial system. Many out there get upset when I compare derivatives trading to gambling, and perhaps it would be more accurate to describe most derivatives as a form of insurance.  The big financial institutions assure us that they have passed off most of the risk on these contracts to others and so there is no reason to worry according to them. Well, personally I don't buy their explanations, and a lot of others don't either.  On a very basic, primitive level, derivatives trading is gambling.  This is a point that Jeff Nielson made very eloquently in a piece that he recently published…"

Exceellent repub of Mike Shedlock's wonderful article describing the 3 Schools of Economic Wizardry.  Includes a simplified but exacting view of the "why and how"  the Keynesian and Monetarist Wizardry Schools wreck havoc on the world.   ... Keynesian Voodoo Wizards ... Monetarist Voodoo Wizards ... Austrian Realists Remember the voodoo motto: "If it doesn't work, keep doing more of it, even if that is what got you in trouble in the first place!" ..... Excerpt: Once upon a time (today), in a land not so far away (USA), there lived a trio of economic wizards (economists), whose names shall remain anonymous (Paul Krugman, Greg Mankiw, Ben Bernanke). A fourth wizard, Murry Rothbard, is no longer among the living but resides in the netherworld. The above wizards seldom agree with each other because they come from competing schools of wizardry. Three Schools of Economic Wizardry 1. Keynesian School of Fiscal Voodoo and Witchcraft 2. Monetarist School of Monetary Voodoo and Witchcraft 3. Austrian School of Sound Money, Sound Economic Principles and Common Sense. "Dark Arts" Wizardry The first two wizardry schools belong to a class of wizardry promoted to aspiring wizards as the "Dark Arts." Philosophical Beliefs Keynesian wizards believe governments can spend their way to economic health and although fiscal deficits may matter at some point in time, they never matter now, in practice. Monetarist wizards believe money will cure any and every problem if enough is dropped from helicopters and interest rates held low. Austrian wizards believe that economic problems are created by unsound money, haphazard loans, excessive debts, and government manipulations. Keynesian and Monetarist wizards believe in the voodoo principle "the problem is the solution if only you do more of it." The former relies primarily on fiscal voodoo; the latter relies primarily on monetary voodoo. Austrian wizards do not believe "the problem is the solution," no matter ho

Since the Bretton Woods Agreement was signed in the wake of World War II, the global monetary system has been based on the US dollar. This means that when the Fed decides to create trillions of dollars of inflation, other countries can't simply say, "let them dig their own grave." Instead, because their international transactions are denominated in dollars, they feel a pressure to maintain relatively stable exchange rates between their currencies and the dollar. Most countries do this informally and have their own (bad) reasons for maintaining a certain level of inflation. China, however, is more literal in its devotion to the dollar system, perhaps due to its psychology as a new arrival on the world stage. So, in recent history, the People's Bank of China has largely maintained a "peg," by which it currently offers to pay 6.8 RMB for every dollar deposited, no matter how many extra dollars the Fed prints. To put it another way, China, and to a certain extent the entire world, is on a Dollar Standard -- like the Gold Standard, but based on another fiat currency instead of a precious metal. What this also means is that China does not intentionally devalue its currency against the dollar, but only to keep pace with the dollar. As the Fed seeks to blow up the global monetary system, I take comfort in the fact that gold cannot fight a currency war because it is not a currency. Gold is money. Currencies used to be backed by money until the global fiat system was introduced under President Nixon. Fiat currency can be printed at will until the economy collapses, as has happened many times in history. Money is impossible to devalue at the whim of politicians because it is naturally scarce. Even in the ruins of Europe after the Second World War, when there was no central authority and chaos reigned, an ounce of gold was worth what it always had been. Read more: http://www.businessinsider.com/bernanke-is-engaging-in-the-monetary-equivalent-of-nuclear-war-2010-11?utm_sourc

Excellent discussion of where the Republican Party stands in relationship to the destruction of the dollar and new interest in linking the dollar to GOLD.  Good stuff.  Personally i'm in the Ron Paul camp, hook, line and sinker. excerpt: "In the ferment within today's Republican Party, the gold standard has become almost the centrist position. On the left would be those who favor a system of discretionary activism in which brilliant technocrats, such as Ben Bernanke at the Fed, use their judgment in setting interest rates. A bit to their right would be advocates of a rule, such as John Taylor's rule linking interest rates to various conditions, or one that requires the Fed to target the price of gold but stops short of defining the dollar in terms of specie. In the center would be advocates of a classical gold standard, in which a dollar is defined as a fixed amount of gold. These include, among others, Mr. Lehrman, James Grant of Grant's Interest Rate Observer, publisher Steve Forbes, economist Judy Shelton, and Sean Fieler of the American Principles Project. A bit further to the right would be partisans of the Austrian school of economics, including Rep. Paul. He advocates less for a gold standard than for an idea of Friedrich Hayek, the Nobel laureate who came to favor what he called the denationalization of money and a system centered on private coinage and currency that would compete with government-issued money. Further right are purists such as the radical constitutionalist Edwin Vieira Jr., who would simply price things in weights of gold or silver. A good bit of overlap exists among the camps, but Congress has come alive to all points on this spectrum. Rep. Kevin Brady, a Texas Republican who is vice chairman of the Joint Economic Committee, is seeking to pass the Sound Dollar Act, which would end the Fed's mandate to keep unemployment down, instead having the central bank focus only on stable prices. Rep. Paul is pressing the Free Competition in Curr

Savings & Loan crisis regulator Bill Black testifies in front of the House in 2011.  He explains the financial collapse of 2008, the role of subprime and liar's loans, and the incredible fraud running rampant through the Bankster industry.  Lehman Brothers alone was responsible for near 80% of the fraudulent liar loan mortgage security packages sold throughout the world.  Black lays much of the blame on the Federal Reserve, the SEC, and three individuals: Greenspan, Bernanke, and Timothy Geitner (NY Federal Reserve).  He compares how regulators with limited authority were able to contain and minimise the Savings and Loan fraud problem, with the near total lack of effort by the Federal Reserve, FDIC and SEC regulators.  Extrordinary testimony.  And Congress, the Justice Department, the Federal rEserve, the SEC, the FDIC and all the other elite regulators continue to do NOTHING!

In my view, the Fed is beyond salvage. It needs abolition, not a new role. The Constitution grants Congress the power to mint and coin money, not a group of rent-seeking banksters. 

They fought the correction; the correction won. We refer to Bernanke, Summers, Obama, Geithner, Krugman - the whole lot of them. They added three trillion dollars to US debt in the last two years. In two more years the debt will be at 100% of GDP. Add in the debts they've guaranteed - from Fannie Mae, for example, and state and local debt implicitly backed by the feds - and you're already at 150% of GDP. Worse than Greece, in other words.

10/22/10 Hong Kong, China - Austerity be damned, at this rate Mr. Bernanke will go down in the history books as one of the greatest money creators ever to have walked this planet! Never mind sky-high deficits and a crushing debt overhang, at its most recent FOMC meeting, the Federal Reserve all but guaranteed another round of quantitative easing. The truth is that the US is insolvent and its policymakers will stop at nothing in order to avoid sovereign default. So, it should come as no surprise that at its latest meeting, the Federal Reserve downplayed the risk of inflation, thereby setting the stage for another round of money creation.

Tim Geithner and Ben Bernanke are still parroting Wall Street's take on the meltdown--that it's a "liquidity crisis," not a "solvency crisis."  The infamous Schiller Chart is a history of Home Values going back to 1890. The Cahrt graphically screams that housing values have to fall another 20% to 30% before they might begin to level out. That is, if the capitalist engine of America's wealth and prosperity is still in existence then.

I've been reading John Mauldin's newsletter for some time now.  The guy is so grounded, and his writing style is fluid.  Mostly though i appreciate the depth of background information that surrounds the simplicity of his explanations.  Note his connections to George Friedman, Niall Ferguson David Rosenberg, Lacy Hunt and Gary Shilling.  Quite a murders row of economic thinking.  anyway, John's newsletter has become the bottom line of my economic thinking. excerpt:     "Our immersion in the details of crises that have arisen over the past eight centuries and in data on them has led us to conclude that the most commonly repeated and most expensive investment advice ever given in the boom just before a financial crisis stems from the perception that 'this time is different.' That advice, that the old rules of valuation no longer apply, is usually followed up with vigor. Financial professionals and, all too often, government leaders explain that we are doing things better than before, we are smarter, and we have learned from past mistakes. Each time, society convinces itself that the current boom, unlike the many booms that preceded catastrophic collapses in the past, is built on sound fundamentals, structural reforms, technological innovation, and good policy." - This Time is Different (Carmen M. Reinhart and Kenneth Rogoff) When does a potential crisis become an actual crisis, and how and why does it happen? Why did most everyone believe there were no problems in the US (or Japanese or European or British) economies in 2006? Yet now we are mired in a very difficult situation. "The subprime problem will be contained," said now controversially confirmed Fed Chairman Bernanke, just months before the implosion and significant Fed intervention. I have just returned from Europe, and the discussion often turned to the potential of a crisis in the Eurozone if Greece defaults. Plus, we take a look at the very positive US GDP numbers released this morning. Are we final

Tyler Durden does the numbers and presents us with a jaw dropping chart.  Simply put; $2.5 Trillion in new debt ceiling equals $2.5 Trillion in newly printed dollars.  And Gold will go up exactly in lock step with the rising debt ceiling. excerpt: Two weeks ago we presented a chart that shows the uncanny correlation between the debt ceiling and the price of gold. Now that we know the final amount of the next debt ceiling hike, somewhere in the $2.5 trillion ballpark, it allows us to extrapolate where gold will end up as a result of the debt ceiling hike which will likely be voted into law at 7pm PDT. A simple correlation rule of thumb allows us to predict that gold will be at $1,950 by the end of the year if it simply retains it close correlation to the debt ceiling. Should Bernanke announce that he will additionally need to monetize some or all of this incremental debt amount, we anticipate that gold will be well over $2,000 by the end of the year, courtesy of yet another round of accelerated dollar debasement, which also means that real gains in US stocks will be negated courtesy of the devaluation of the currency in which they are priced. The same, however, does not apply for gold, which with every passing day is priced in nothing but itself.