President Bush in an interview with CNN’s Candy Crowley (broadcast 16 December on Lou Dobb’s Tonight) — Excerpt:
I feel a sense of obligation to my successor to make sure there is not a, you know, a huge economic crisis. Look, we’re in a crisis now. I mean, we’re in a huge recession, but I don’t want to make it even worse and on the other hand, I’m mindful of not putting good money after bad so we’re working through some options.
… I’ve abandoned free market principles to save the free market system. I think when people review what has taken place in the last six months and put it all in one package, they’ll realize how significantly we have moved.
Excerpt from The King Report, 17 December 2008 — “Independent View of the News.”
If one uses the sophistry, “I’ve abandoned free-market principles to save the free-market system”, then one can assume he/she would also ‘abandon democratic or constitutional principles to save the country.’ Solons, trying to prove their decades-old philosophies and salvage their massive egos, have altered the very nature and fabric of the USA with their grandiose interventions and nationalizations. The USA as the founders conceived and ensuing generations believed no longer exists.
A select few solons now exercise an unfathomable concentration of power and control over the US economy and financial system. The major concern is no longer economic or financial; it’s for the return of the USA to its market economy and constitutional roots.
Ben Bernanke and the Fed just screwed everyone in the US, and some abroad, that played by the rules, was prudent and live on fixed incomes. Ben, just like Easy Al, is once again redistributing wealth from the prudent, the savers and retirees to the reckless and the boobs that created this mess. What Ben and his boobs don’t understand is they are harming the economy by cutting people’s incomes. The Fed, by cutting its official rate to 0 to 0.25%, is just putting the Fed’s target rate in line with the effective or real rate. But the Fed, via its communiqué {16 Dec}, is admitting that it is petrified of what is occurring in the economy and financial system so it is now in all out money/credit dump mode.
Since the Committee’s last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further…
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time…
As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.
The Fed is frantically signaling that it wants asset prices to inflate and will engage in any and all activities that will force asset prices higher. The Fed announced that it will monetize the entire debt market if necessary. As we have asserted, the Fed has bet the entire ranch. Now we get to see if it works.
… More importantly, the Fed has inflated the US government and agency debt bubble to with a couple hundred basis points of its maximum value. There will be hell to pay later, no matter how many Street shills aver that the Fed is capable of removing the toxin at the precise moment. About the only arrow remaining for the Fed is to announce that it will monetize stocks and the NY Yankee’s payroll. The Fed is now inflating at a record level for a central bank of a developed country, with the possible exception of Weimar Germany.
The Great Monetarism Experiment is on! But it is NOT stopping deflation via the monetization of debt, which has been accomplished repeatedly throughout history. The Great Monetarism Bet is averting deflation without going the way of a banana republic or Weimar Germany. You can bet that the Fed will overplay its ‘bet the ranch’ monetization because it cannot afford to abort the process too early. The Fed must wait until significant inflation or dollar destruction appears.
… Please rebuke anyone that labels Bernanke with some adjective that conveys genius or acumen because any idiot can paper over a deflation and numerous idiots have tried to do so – with catastrophic results. … So the Fed has snatched even more power and control, my dear comrades, because now just about everyone must connect to the Fed’s umbilical cord to get credit.
Team Obama will preside over and manage a ‘command economy’ with a chunk of the US financial system nationalized and the Fed being, for all intents and practices, the debt market. And soon US automakers could be nationalized to some degree.
Afterword
If you are new to this site, please glance at the archives below. You may find answers to your questions in these.
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For more information from the FM site
To read other articles about these things, see the FM reference page on the right side menu bar. Of esp relevance to this topic:
- about the Financial crisis – what’s happening? how will this end?
- about the End of the post-WWII geopolitical regime
- some Good News about America!
Post on the FM site about diagnosis, causes, and the larger context of the crisis:
- The US economy at Defcon 2, 11 March 2008 — Where are we in the downcycle? What might the world look like when it ends?
- The most important story in this week’s newspapers, 22 May 2008 — How solvent is the US government?
- Another warning from our leaders, which we will ignore, 4 June 2008 — An extraordinarily clear warning from a senior officer of the Federal Reserve.
- High priority report: a geopolitical sitrep on the financial crisis, 15 September 2008
- A new sitrep, as we move into phase 3 of the financial crisis, 19 September 2008
- A sitrep on the financial crisis: why has the treatment been so slow, so small?, 8 October 2008
- Status report on the financial crisis: we’re at a critical point in time, 10 October 2008
