Federal Reserve Open Market Committee Chairman Ben Bernanke's told the congressional Joint Economic Committee of Congress October 4 that he has the remedy for the ailing economic recovery he admits is "close to faltering": More of the same deficit spending, monetary stimulus, and work to re-inflate the housing bubble.
Bernanke acknowledged to Congress that deficit spending is out of control. "One crucial objective is to achieve long-run fiscal sustainability. The federal budget is clearly not on a sustainable path at present," he told members of the House-Senate joint committee. The Fed Chairman termed the work of Congress' other joint House-Senate "Super-Congress" committee, charged with cutting some $1.5 trillion of the estimated $8-9 trillion in expected deficits over the next 10 years, "a substantial step; however, more will be needed to achieve fiscal sustainability.... In sum, the nation faces difficult and fundamental fiscal choices, which cannot be safely or responsibly postponed."
By those remarks, Bernanke didn't mean that federal, state, and local governments should balance their budgets and stop using deficit spending to continue their stranglehold on the credit markets.
According to Harvey Rosenblum, a top economist at the Dallas Federal Reserve Bank, the American economy is at the “knife edge” between growth and contraction. He spoke at a forum sponsored by the San Antonio Chamber of Commerce on September 27. “We are in the midst of the Second Great Contraction,” he observed, adding that he didn’t think that “monetary policy tweaks” would help much. “The patient isn’t responding well to the medicine,” he said.
And so, the Fed’s inflationary policy is not creating job growth. But, according to Bernanke, it may be preventing deflation, which led to the Great Depression. But while the private sector has formidable assets which could become the basis for future prosperity, unfortunately we are stuck in the mire of uncertainty that socialist Obama and his leftist colleagues have driven us into.
And there are good reasons why this economy is treading water. First, we have a horrendous national debt which Obama refuses to reduce. Indeed, he and his socialist buddies want more debt in order to destroy our capitalist system. In fact, he has engineered the largest expansion of government in U.S. history by enacting ObamaCare, which will increase the national debt even more.
Republican presidential contender and former Federal Reserve Bank official Herman Cain complains about "stupid" questions from supporters of Rep. Ron Paul, a fellow GOP presidential contender, in a new campaign memoir. Cain, who handily won the September 24 Florida straw poll and is the frontrunner in some recent national polls, complains in his new book This is Herman Cain that "Paulites" are lying about his record when they say he opposed an independent audit of the Federal Reserve Bank.
“I have never said that,” Cain wrote in his book scheduled for release October 4, according to the Daily Caller. “I have said: ‘I don’t think you’re going to find anything to audit on the Federal Reserve.’ But they want you to believe that Herman Cain doesn’t want the Federal Reserve to be audited.”
Cain has indeed stated recently that he favors an audit of the Federal Reserve, the nation's central bank. But critics of Cain point out that the former chairman of the Kansas City branch of the Federal Reserve Bank told a radio audience less than a year ago that Cain opposed an audit. While guest-hosting the the Neil Boortz Show on December 29, 2010, Cain said:
Apparently the Federal Reserve is not the only entity threatened by gold. Central banks in Europe are restricting the sales of precious metals, presumably threatened by the fact that citizens are increasingly abandoning the devalued paper currencies and preserving their wealth by purchasing gold and silver.
Most countries in Europe — with the exceptions of Germany and Switzerland — have already mandated that residents may acquire gold only by purchasing it directly from local bank branches. Banks have justified the new policies by claiming that they are intended to prevent money laundering.
The Federal Reserve is seeking contractors to build a tool that will monitor and analyze blogs, news reports, and social-media chatter about the central bank and its policies, with a goal of being able to use “public relations” strategies to counter the growing barrage of negative publicity. But critics quickly added to the institution’s troubled image as the news spread by lambasting the half-baked scheme as “Orwellian” spying and “intimidation.”
The Fed’s “Request for Proposal” explains that the institution needs a platform to “monitor billions of conversations” and “identify and reach out to key bloggers and influencers.” Information collected will be used to measure the effectiveness of the central bank’s “public relations” and “communication strategies” — known in laymen’s terms as propaganda operations.
“There is need for the Communications Group to be timely and proactively aware of the reactions and opinions expressed by the general public as it relates to the Federal Reserve and its actions on a variety of subjects,” the document states. News outlets, Facebook, Twitter, forums, blogs, YouTube, and other social media platforms will all be targeted.
Our nation stands at the precipice of an economic meltdown that would make the current recession seem like the “best of times.” The almighty dollar, once labeled “good as gold,” stands close to repudiation. Yet the Obama administration and congressional leaders are failing to address the reason for the dollar’s decline.
We find ourselves mired in the “it can’t happen here” syndrome. The experts won’t tell the public what happened in Germany in the 1920s, or in Hungary and Argentina more recently, or in Zimbabwe only a few years back. But all of the agony and chaos experienced in those nations should be expected in America. The dollar has plummeted so far in value that its worth is now less than five percent of what is was when a deceived Congress voted to create the Federal Reserve in 1913.
Addressing this increasingly dire situation, Congressman Ron Paul has introduced H.R. 1098, the “Free Competition in Currency Act of 2011.” Its main purposes are: 1) repeal the legal tender laws; and 2) bar taxation when buying or selling such commodities as gold, silver, and platinum if the intention is to use them as money.
National Review's latest cover story is a character assassination of Ron Paul and the JBS.
The sovereign debt woes of the European Union are nearing a critical stage. Greece's short-term bonds have recently shot to 60 percent, indicating an extremely high probability that the ancient country will default. Though Portugal and Spain, two of the other “PIIGS” member-states in the EU, are temporarily off the radar screen, neither has solved its fundamental debt problems.
In Finland, the only Scandinavian nation in the eurozone, the True Finns political party has enjoyed remarkable success running largely on a platform of refusing to bail out spendthrift EU members whose expenditure-to-revenue ratios would make full repayment of debt instruments unlikely without outside help. The other Scandinavian nations have become increasingly reluctant to join the eurozone over the last few years.
The sovereign debt crisis originally involved four governments — the so-called PIGS: Portugal, Ireland, Greece, and Spain. What is particularly disconcerting for those attempting to solve the EU's economic problems has been the inclusion of Italy in this group (now known as PIIGS).
As the nation continues to struggle with a prolonged economic slump and an unemployment rate that remains stubbornly above nine percent, former Federal Reserve Chairman Paul Volcker has warned the Fed against the temptation to jeopardize price stability in an effort to jumpstart the economy. Even "a little inflation" can be dangerous, Volcker warned in an op-ed piece in Monday's New York Times. Volcker noted "a sense of desperation" abroad in the land, since "both monetary and fiscal policy have almost exhausted their potential, given the size of the fiscal deficits and the already extremely low level of interests rates.
"So now we are beginning to hear murmurings about the possible invigorating effects of 'just a little inflation.' Perhaps 4 or 5 percent a year would be just the thing to deal with the overhang of debt and encourage the 'animal spirits' of business, or so the argument goes." Businesses will be encouraged to invest today in anticipation of higher prices tomorrow. A further weakening of the dollar would also boost exports, thereby spurring an economic recovery, some theorists have suggested, arguing that we can return to price stability as the economy expands again.
Anyone who watches television news for more than a few hours is likely to see an advertisement for gold. As the Federal Reserve continues to print fiat money in vast quantities — backed by nothing except the vague promise that this paper is legal tender and can be used to pay all debts public and private — people are increasingly looking for something of real value. And that something is gold.
When American currency was redeemable in gold, its value was stable. Even “bimetallism,” which provided that currency could also be redeemed in silver, did not significantly affect the value of the dollar.
Historically, a major issue in certain presidential campaigns — such as those of William Jennings Byran v. William McKinley in 1896 and 1900 — was whether to allow dollars to be redeemed in silver. Because of America's silver mines — primarily in the Rocky Mountain region — allowing such an exchange would bring more currency into circulation, producing mild inflation. What person alive then would have ever imagined the dire straits of today, when our currency is backed only by a federal government drowning in debt?