FedUpUSA

This is unbelievable:

The FOMC decided this week that, with unemployment high and inflation very low, further support to the economy is needed.

And if you could support that decision with actual facts, it would be ok.  But when you lie, it’s not.

The first lie is here:

Today, most measures of underlying inflation are running somewhat below 2 percent, or a bit lower than the rate most Fed policymakers see as being most consistent with healthy economic growth in the long run.

No it’s not.  Your “favorite” and published inflation gauge is the GDP Deflator.  The latest report is here, and the Deflator is in pink.  It is 2.2 for the most-recent quarter, and 2.0 for the previous.  It is rising, up from 1.1 (which is at the lower boundary) in Q1.

But the outrages do not stop there.

This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action.

Really?  How did the 30 year Treasury Bond react since you started threatening this action?  Let’s look:

That’s lie #2.  The 30 year Treasury Bond went from 3.46% when you started threatening QE2 to 4.06% today, when you enacted it.  In anticipation of your actions long-term interest rates ROSE, not fell. 

Worse, you knew this would happen because the same thing happened when you started QE1!

This is an intentional lie.  10 seconds with a terminal or chart would leave you inexorably to the conclusion that rates have been going up, not down, in anticipation, and that this is exactly what you should expect from the last time you performed QE.

Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment.

Just like the last time you did QE Ben?  Remember that?  I do.

Here ‘ya go:

Rates on the 10 year, which is most-closely linked to mortgages, went up, not down, after you announced your first Quantitative Easing stint and they did not start to come back down until you finished.  That is, you didn’t help long rates you damaged them and now you’re going to do it again.

Our earlier use of this policy approach had little effect on the amount of currency in circulation or on other broad measures of the money supply, such as bank deposits. Nor did it result in higher inflation.

ANOTHER lie, especially if one cares about things like oil.  Here’s the two-year oil price:

Gee, nice correlation there.  Oil rises from just under $50 to $85 in lockstep with QE1.  When it ends, oil falls in price to $70.  As soon as the threat to do it again starts, oil once again starts going up in price, even though the claim is made that economic recovery is “soft”, thus justifying the act.

If the change is roughly identical, oil is headed to about $110 in the next three to six months, and gas to $4.00/gallon.

We have made all necessary preparations, and we are confident that we have the tools to unwind these policies at the appropriate time. The Fed is committed to both parts of its dual mandate and will take all measures necessary to keep inflation low and stable.

In a word: Bullshit.

Not only are not committed to it, you’ve said so in this piece itself, right here:

And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.

Higher stock prices are an example of inflation, as they are, without underlying growth in the business, simply an expansion of the multiple paid for a dollar of earnings. 

That’s the same thing in the stock world as adding more dollars to the system and calling each still a dollar.  Each dollar is a smaller proportion of the whole of the currency, just as each dollar of share price buys a small proportion of a dollar of earnings.

That’s inflation Ben.

Why is it happening?  Right here.

That’s the dollar, and it has dropped by about 15% as a direct result of your threats and, today, your actions.  The price ramps that this is causing are already being complained about by companies in their input costs, including Kimberly-Clark which said last week that they are experiencing the worst cost-push pressures on their inputs in the company’s history.

There is no “stock market rise” when one looks at it in terms of the dollar.  The dollar is sinking – that’s why the the apparent price of stocks are going up. 

During the time that the market has risen you have suffered an actual 15% inflation caused by the intentional devaluation of the dollar!

You’re lying Bernanke, and the above proves both that you’re doing so and that you’re doing it on purpose.

There’s only one more question: WHY?

I’ll tell you what I think.  You’re desperate, like a rat trapped in a maze.

You should have taken the big banks into receivership – bankruptcy – in 2007.  You knew damn well they had been writing crap loans and had well over a trillion dollars worth of trash on their balance sheet and two trillion more that they had sold off to suckers around the world, including our own government GSEs Fannie and Freddie.  Hank Paulson knew it too – he was doing some of it himself when he ran Goldman.

That’s why you didn’t use TARP to buy toxic assets – it wasn’t enough to clear the balance sheets, and you knew that too, especially if any of the bad paper sold off starting to boomerang.  If you had bought any of the “toxic assets” out of the banks the suckered investors would have figured it out immediately and inundated those same banks with repurchase demands, collapsing your little scheme.

So you and Paulson decided instead that you were going to try to hide the damage with a “capital infusion” program. 

It would have worked too, if house and commercial property prices would have gone back to where they were in 2005 or 2006 within a couple of years.

But that was mathematically impossible, and if you were thinking, you would have realized that. Those “prices” were predicated on fraud.  There aren’t enough people who earn enough money to be able to buy at that price, or service the debt required.  And having offshored too many of our good jobs, there was no way to fix that in a reasonable amount of time either.

Now you’re trapped in your own games and lies.

The bad debts are overwhelming the big banks.  They have over $400 billion worth of Home Equity loans on their balance sheets.  70% of that dollar volume was in the sand states.  In those states, 50% or more of the homes are underwater and of those more than half are delinquent.  The problem is that a second loan is worth zero if it’s behind a first that defaults and forecloses.  But the banks are carrying those loans at 95 cents on the dollar.

If the truth comes out all the big banks blow up and you are forced to admit both to your current failure and to your regulatory failures going all the way back to your first appointment in 2004. 

So this is your “Hail Mary” pass, just like it was done in Japan.

It won’t work Ben.

I’ve already laid out why in countless articles.  Go read my stuff on Foreclosuregate.  That’s just one of the many triggers that will set this off and bring the entire house of cards down on your head – justifiably so.

Perhaps – just perhaps – this time the New Congress, with its solid Republican and Tea Party representation, might force you to eat these lies.

Before our economy and monetary system is destroyed by your actions.

You’re caught Bernanke – by your own hand.

Heh look at me, I got a syringe over here full of currency debasement for you!

For immediate release

Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.

In English: Other than construction, which The Fed overinflated, the rest of the economy looks ok.  Alright, so you’re just trying to inflate housing.  Thanks Ben – we figured that out.   The problem with this premise is that while you might “help” real estate (of all sorts) you have done so at the expense of commodities, and guess what – 99% of Americans buy a payment, not a house.

Therefore, your operations are net-negative, because due to economic slippage you get screwed by this.

PS: It’s not lost on us that the real problem is $400 billion in putbacks from fraudulent MBS and another $200+ billion of worthless second lines that are being held on bank balance sheets at 95 cents.  Yes, that’s enough to blow every large bank to beyond the orbit of Mars, and what you’re doing won’t work.  When this gets into the public’s consciousness – that you trashed their standard of living so the banksters can try to pretend for another six months – they’re going to want to invite you to dinner – as the main course.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.

Inflation is too low eh?  What’s your mandate?  1-2%, right? 

Heh shithead, what’s this then from the current GDP release?

Simply put: You are a lying sack of shit Bernanke – the GDP Deflator is 2.2%!

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

In English: To attempt to force prices higher, which already has and will continue to reflect into commodities and thus screw you, the common man, The Fed is now monetizing essentially the entire net issue of Treasury Debt for the next six months. 

This is an effective 20% devaluation of the currency beyond that which has already been done.

I hope you like expensive gas, milk, bread, you know – everything you need to buy to live.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

They’re trapped.  Period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate. 

Uh huh.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits. Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.

Hoenig is right, and you’re not only a douche Bernanke, you’re a lying douche.

To the House and Senate: Impeach this lying jackass who not only perjured himself when he said, in sworn testimony, he would not monetize the federal debt, but who just got caught claiming that inflation is below his target when the GDP Deflator just printed 2.2% – which is ABOVE target, and is the second quarter running at or above the upper boundary!

Winning elections, especially in an environment where the people hate politicians that have allowed Wall Street to asset-strip them for more than two decades, is easy.

All you have to do is point to the guy who offered “change”  as his campaign slogan and then failed to deliver on that promise.

Who, instead of fixing the banking system and prosecuting the myriad frauds, protected the thieves.

Who, instead of dealing with the long-term deficit problems in Medicare and Medicaid, made them worse, and worse, watched insurance companies jack everyone’s health rates by 20, 30, even 40% – and did nothing about it.

This election wasn’t about “we love the Republican ideals.”  The nation doesn’t, to be frank.  “Guns, Gays and God” sells for a while, but when you’re hungry both gays and straights can be driven to reach for their guns, swearing to God that those rats aren’t going to get away with this!

I’m quite sure that wasn’t the “Guns, Gays and God” viewpoint that either side was thinking of when they were running their campaign.

We’re still hearing about how we have to “reach across the aisle” and deal with “the budget.”

The first step to resolving a problem is admitting what it is.  In the case of Washington we have a government that is borrowing 43 cents of every dollar it spends.  That has to stop right now.

Further, we have a Federal Reserve that, in the last two years, has printed and debased the currency of this nation by more than 100%, taking their balance sheet from $800 billion to more than $2 trillion.  They now threaten, today, to do even more of that.  This has resulted in insane price ramps in soft commodities, and that will result in insane margin compression.  Did you watch 60 Minutes? 

http://www.cbsnews.com/video/watch/?id=7009215n