Fed Chairman Ben Bernanke’s news conference on November 2 included the admission that the Fed is depending on hope and patience to see if its continuing strategies of Operation Twist and zero interest rates will grow the economy out of recession. In his session with reporters, Bernanke defended Fed actions in the face of increasing criticism from both the left and the right.
Three years after the Federal Reserve's massive and continuing interventions in the financial markets, Bernanke was forced to admit that “recent indicators point to continuing weakness in overall labor market conditions and the unemployment rate remains elevated ... and consequently [the Fed] anticipates that the unemployment rate will decline only gradually.... Moreover, there are significant downside risks to the economic outlook.” He added that “we did underestimate the pace of recovery for some fundamental reasons,” including the continuing declines in the real estate markets and “a certain amount of bad luck.”
Bernanke was forced to reduce further his estimates about the rate of economic growth, now predicting that the U.S. economy will grow at only 1.6 percent to 1.7 percent in 2011, and that 2012 growth will range between 2.5 percent and 2.9 percent, nearly a full percentage point below his previous estimates. He also sees unemployment remaining sticky at between 8.5 percent and 8.7 percent, higher than the 7.8 percent predicted in June. What little growth he has seen in the last month amounts to nothing more than consumers' reaction to the decrease in gasoline prices and Japan’s recovery from the earthquake and tsunami last spring.
The Occupy Wall Street demonstrators are continuing their march toward globalism as they have now endorsed a global tax system, to be instituted and monitored by a new global government. With the G20 summit set to take place November 3 in France, the directors of the Wall Street protests are now setting their sights on the implementation of the “Robin Hood tax” on all transactions involving shares, bonds, and derivatives, and possibly other items as well.
David Galland’s article for the Daily Reckoning painted a picture of imminent collapse of America’s monetary system, which was followed four days later by Clive Maund’s possible scenario of bank failures following on the heels of a eurozone collapse. Mamta Badkar raised the specter of hyperinflation in his Business Insider article by reviewing the “10 Worst Hyper-Inflation Horror-Stories of the Past Century,” reflecting interest in whether, or how, the economic disaster of hyperinflation would affect the United States.
According to Badkar, the runaway inflation of Germany in the early 1920s is one of the worst cases in history, where, at its nadir, the monthly inflation rate reached 29,500 percent in October 1923. In post-World War II Greece, inflation peaked at 20.9 percent a month in October 1944, while in July 1946, inflation in Hungary hit 207 percent daily. In China, following the Second World War, inflation reached 2,178 percent in May 1949, equivalent to a daily rate of 11 percent.
In the mid-1970s, Chile suffered from an inflation rate of 746 percent annually, while Argentina’s inflation rate in 1989 hit 12,000 percent. Bolivia’s inflation between May and August 1985 hit 60,000 percent on an annual basis. Nicaragua’s inflation rate in 1987 exceeded 30,000 percent; Yugoslavia’s daily rate of inflation reached 64.6 percent between 1989 and 1994; and in perhaps the most famous hyperinflation of all time, the purchasing power of Zimbabwean dollars was virtually obliterated, with inflation reaching 416 quintillion percent annually.
A “global political authority” and a “central world bank”: These are the solutions that the Pontifical Council for Justice and Peace recommends for the worldwide financial crisis. “Towards Reforming the International Financial and Monetary Systems in the Context of Global Public Authority,” the document outlining the council’s recommendations, is, in the words of author and Roman Catholic Thomas E. Woods, Jr., “deeply confused,” at once recognizing that central bank-driven inflation and easy credit are at the root of the world’s financial woes and prescribing even bigger government and more highly centralized banking as the cure.
There is some debate over whether the document presents the church’s official position on the matter. While press accounts have often referred to it as if it were a papal pronouncement, National Review’s George Weigel insists that such attribution is “rubbish, rubbish, rubbish.” “The document is a ‘Note’ from a rather small office in the Roman Curia,” Weigel maintains, adding that it “doesn’t speak for the Pope, it doesn’t speak for ‘the Vatican,’ and it doesn’t speak for the Catholic Church.”
Woods, responding to similar criticism from a reader of his blog, argued: “I’m supposed to distinguish between the Pontifical Council and the Pope, you say. Fair enough. But did those people appoint themselves? Is Rome consistently surprised by how liberal its appointees turn out to be? Fewer and fewer people believe this anymore.” Indeed, the council’s recommendations mirror those of Pope Benedict XVI, who in a 2009 encyclical called for “a true world political authority” to, among other things, “manage the global economy.”
Oh happy day! A check from the government! No, not a welfare check or a “stimulus” check, but a refund check to your editor from the U.S. Department of the Treasury — for tax year 2007. Seems the IRS — a division of the Treasury — with which this scribbler has had a running feud, has surrendered. After years of dunning me with claims that I owe thousands in back taxes and penalties, the good folks at the IRS have shown mercy; they have agreed with me that I overpaid my taxes. And they have generously deigned to return several thousand dollars of my meager salary that they had previously confiscated — with interest, no less!
What’s not to love about a government so kind, and munificent? Of course, in order to obtain the refund (of my own money), yours truly was forced to spend a couple hundred hours of indentured servitude researching, copying, and documenting records and receipts. Not to mention hundreds of dollars in accounting fees. Even worse though is the incredible invasion of privacy one faces for the decision to itemize deductions and business expenses, in the hope of retaining a fraction more of one’s hard-earned income. But after all, Big Brother must know of, and approve of, every penny earned and spent by the taxpayer — to keep us all honest, and keep us all paying our “fair share,” so that the government can keep doing all the wonderful things it does for us, right? That’s the “American way,” yes?
Washington Post reporter Karen Tumulty tried to get Republican presidential candidates in the October 11 New Hampshire debate to agree with the left-wing consensus that Wall Street suddenly and inexplicably went insane and greedy all at once during the 2008 housing and financial crash. Republicans were also asked to echo leftist calls for jailing stockbrokers, but if Tumulty hoped for ideological consensus, she left the Dartmouth College debate table disappointed.
Minnesota Representative Michele Bachmann began with an attack on the federal government for creating the sub-prime market crisis through Fannie Mae and Freddie Mac subsidies, the Community Reinvestment Act (CRA) regulations, and "artificially low interest rates" through the Federal Reserve Bank.
Former House Speaker Newt Gingrich followed, launching into a vitriolic attack on the Federal Reserve Bank, and referring to "Occupy" protesters in various cities across the nation:
If they want to really change things, the first person to fire is Bernanke, who is a disaster as a Chairman of the Federal Reserve.... Bernanke has in secret spent hundreds of billions of dollars bailing out one group and not bailing out another group. I don't see anybody in the news media demanding the kind of transparency at the Fed that you would demand in every other aspect of the Federal government. And I think it is corrupt and it wrong for one man to have that kind of secret power.
Wall Street and the Fed demonstrations send the wrong message to average Americans.
Nobody in the Western world has been willing to admit that it is the socialist policies of their governments that have led to the dire economic problems the world now faces. Sir Mervyn King, governor of the Bank of England, revealed how severe the crisis is after the decision was made by the bank’s Monetary Policy Committee to put 75 billion of newly created money into the economy in a desperate effort to stave off a new credit crisis and a UK recession.
The Daily Telegraph quoted the governor: “This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We’re having to deal with very unusual circumstances, but to act calmly to this and to do the right thing.”
“The world economy has slowed, America has slowed, China has slowed, and of course particularly the European economy has slowed,” he said. “The world has changed and so has the right policy response.”
How did we get into this mess? By following the siren song of the socialists who think that the private sector and the taxpayer can pay for more and more socialist programs. And they think that whipping the capitalist horses that drive the economy is the way to get them to support more and more socialist spending. Obamacare is the program that will finally kill the American Golden Goose. Americans will be reduced to a survivalist economy.
Perhaps surprising to some, many conservatives sympathize with the Occupy Wall Street protesters because they understand the motivating factors behind the protests: increased costs on everyday items, unemployment, inflation, etc. However, those conservatives recognize that much of the anger of the protesters is directed at the wrong target. The real enemy, they contend, is the Federal Reserve, and it is for that reason that those conservatives have chosen to use the momentum of the Occupy Wall Street protests to stage Occupy the Fed protests instead.
One organizer, known only as “Anonymous A99,” announced the first operation targeting the Fed, called “Operation Empire State Rebellion,” on March 12. The announcement explained that the movement was intended to be a “decentralized non-violent resistance movement.” Anonymous A99 said of the intent of the organizers:
Writing for the left-wing blog ThinkProgress, Matthew Yglesias noted his difficulty in coming up with a suitable slogan representing what the “Occupy Wall Street” demonstrators really wanted.
My view is that the best demand of all … is “free money for the rest of us.” There are a lot of different specific ways this can be implemented, but the ... Powers That Be … have been willing to provide all manner of free money to players in the banking system. Debt cancellation is a form of free money for the indebted. But why give free money only to banks? And why give free money only to the indebted? Why not free money for everyone? “Everyone,” of course, includes the indebted. But it also includes ordinary people who didn’t happen to avail themselves of the credit binge. It’s an idea so good that it sounds almost silly.
"Everyone knows” that you can’t just hand out free money to everybody. Except actually you can … in the short term, free money for everyone impacts prices … [but] it would do so in a useful way. I don’t know what the best way to turn this into a slogan is, but the point is that if the different institutions that together constitute “the government” worked together, they could put more dollars into our hands. Creditors won’t like it because doing this will devalue their existing debt claims, but so what?