Wednesday, May 6, 2009

Zimbabwe Ben, Comic

"Fed Chairman Ben Bernanke is confident that it isn't going to happen this time around. To quiet skeptics and reassure markets, he and his lieutenants have been going out of their way the past few days to explain why inflation isn't in the outlook and to lay out the tools they have in hand to fight it. ... In a report this month, Goldman Sachs [GSG] economists sought to knock down what they described as a wave of 'inflation hype' they had been hearing from clients and bond-market traders. ... Inflation might seem like a distant worry today. ... That's why the Fed's goal for now is to get inflation higher, not lower. It has effectively been printing money as part of its rescue efforts. ... At some point when the economy recovers from recession, the Fed is going to have to withdraw this money and raise interest rates. Because the Fed is still ramping up many of its programs, the amount of money it will have to withdraw some day is sure to be even higher than today's astronomic levels. ... If investors don't believe the Fed is up to the task, long-term interest rates could rise in advance of such an event, undermining a recovery before it even happens. 'We are thinking carefully about these issues,' Mr. Bernanke said in a speech in Atlanta last week. ... One worry is that the Fed has pumped so much money into the economy, and done it in so many unconventional ways, that it is going to be operationally hard to reverse course when the time comes. ... One part of the Fed's strategy is that many of its programs were designed to run off naturally as the markets they are meant to assist improve", my emphasis, Jon Hilsenrath (JH) at the WSJ, 20 April 2009.

JH, your piece is so bad, you should be ashamed of yourself. How do you know what Zimbabwe Ben (ZB) is "confident" of? As opposed to what he says to steal US dollar holders savings to give them to his cronies? ZB deals in confidence. Misplaced confidence. Ignore ZB's words. If "inflation" was "in the outlook", would ZB say so? GSG economists are either crazy or paying ZB back for GSG's $13 billion received from AIG. Why listen to them? GSG clients, take your business elsewhere. For your own sakes, if not the good of the country. ZB "will have to withdraw this money" writes JH. Really? Just like the Fed did in 1946 which led to 1947's inflationary explosion. "If investors don't believe"? That's it boys and girls, clap hands so Tinkerbell will live! We live in a world of Peter Pan economics. That's it JH, give ZB his "out". It's too "operationally hard" to reduce the monetary base, so ZB can "fail valiantly in the attempt". Sure. Long-term US dollar bonds are a screaming sell.

2 comments:

darkcloud said...

Good one, SC.

And "The Club" continues on with their mirage.

Remember ZB saying in summer 2007 subprime was contained and losses would "only be" $50B to $100B?

GSG crazy or paying back ZB?

I say both.

Anonymous said...

Don't you think that Chairman Bernanke could find another shill than Goldman Sachs?

I mean Government Sachs is being besmirched by all the Paulson, Friedman, Rubin nonsense... the list is getting pretty long...

But the fundamental point about coming inflation is sound...money quote...

One worry is that the Fed has pumped so much money into the economy, and done it in so many unconventional ways, that it is going to be operationally hard to reverse course when the time comes. ...If the Fed is confident about doing this they should explain to the markets how they will... no one will hold them to it... but it's seems like an enormous task for which they may not have the tools or authority...