Baseball91's Weblog

October 20, 2011

Ten Years of Central Bank Policy

Filed under: Ben Benanke — baseball91 @ 5:33 AM

Quantitative Easing as one grand conspiracy with the ongoing central bank policy?

We were living in the information age—or too much the disinformation age? There was a difference between legitimate economic growth and debt-induced demand. The failed leadership of not just a Republican president and a Democrat president, but a Congress that over ten years passed the bailout, passed the Patriot’s Act, and has funded without a rise in taxes the ongoing wars in Iraq and Afghanistan.

And with the monetary policy which has funded these wars, on the backs of all economies which used the hegemony of the US dollar, was it intervention or manipulation with monetary policy, to get a party re-elected? Someone left the cake out in the rain, and it took so long to make it, it took so long to bake it, and we’ll never have that recipe again.

The dishonesty of it all. All of this liquidity created by going into debt, at below two percent interest, in the aftermath of September 11, during the invasion of Iraq and into the election, as this Fed took historic fiscal and monetary strides on the back of the bubble, with this cheap money policy. TrimTabs tracks liquidity flows in the market, and the source of approximately $600 billion net new cash which had lifted the market capitalization overall by $6 trillion in 2009 could not be identified from traditional players by TrimTabs. The money, Charles Biderman said in a statement, had not come from retail investors, foreign investors, hedge funds or pension funds. It was more than eighteen months ago when Charles Biderman, chief executive of TrimTabs Investment Research, said, “We cannot identify the source of the new money that pushed stock prices up so far so fast.” So market manipulations by governments? Charles Biderman did admit he held no evidence of market manipulation, though he had his suspicions. Who was manipulating the market? When such manipulation by the Federal Reserve and the Treasury Department clearly was illegal.

Home equity loans. All the speculators and the scalpers on e-bay. Clearly there was manipulation of one market– the real estate market — which all began with the Fed’s monetary policy. So how many other markets were manipulated?

The Federal Reserve chief knows that the stock market is the world’s largest thermometer. What happens to journalists who center their perspective on serving the interests of power and gaining proximity to it, aligning their beliefs and priorities with those of the state. People who speak not to those in power but report on the truth? Did you trust themselves strategic partners who sponsored the broadcasts? On cable networks? Did you know that the paradigm set up had arranged for Fox Sports Networks to get $48 million per year direct from your cable company? The cable system approved by local governments. The governments like in the city of Minneapolis which had a mayor promoting — after the horse was out of the barn — another new stadium.

The dishonesty of it all. What happens to governments which spent so much on security? But quit regulating with the power vested in commissions? The television media, its sponsors, and all of the many spin doctors living close by with an ability to provide and package information, filter unwanted noise and offer dynamic real-time insight – all in the context of total transparency–as a precursor to the next generation. The lobbyists. American media always want to fit events in the region into an American narrative.

The only difference, writes Todd Harrison, “between intervention and manipulation is one of advanced communication. When the Bank of Japan telegraphs their actions and buys yen, it’s intervention. If they don’t communicate their actions, then it’s manipulation. It’s a subtle yet important distinction that is the difference when discussing central bank policy.” He wrote in 2005, “In particular, I’m concerned that one of two things must happen in the years ahead. Either the US dollar must further devalue, as it has to the tune of 25% since 2002, or asset classes will deflate in synch. I’m unsure if these are mutually exclusive events but we’ll likely jockey between the two as we figure it out. I will also offer that the greenback will serve as a proxy of isolationism as America delicately dances through a difficult war and sets protectionist policies in place.” That dollar is now down forty percent.

Instead of building a counter narrative with any kind of vision of different perspective, journalists too often perpetuate the dominant ideology. In my locale, the NBC affiliate is leading the news each night with stories about building a new billion dollar stadium for the Minnesota Vikings – with government money. As the elites of the world, the top one percent, owns almost 40% of all wealth in the United States, as compared to 13 percent twenty-five years ago.

What happens to government and systems of governments which spent so much time disseminating illusion? It had been the media which had produced too much of the present day “values” as opposed to those who could critically resolve problems.


1 Comment »

  1. Comment by baseball91 — February 24, 2012 @ 4:12 PM | Reply

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