This sounds good to most because most 'Mericans are stupid and don't know math.

Karl, you are only taking one side, stable prices and forgetting the "the goals of maximum employment" Maximum employment trumps stable prices.

bertdilbert - How's that maximum employment working out for him.

I see bankers hanging from lamp posts in the future.

Inflation is the biggest tax - and it is a tax on all of years and years of savings.

WE pay this tax directly to the pockets of the banksters and all those Saudi investors.

I rather pay the IRS than the Saudis and the banks look how this Ibn-Talal Saudi "Prince" is in love with the bailout:

http://polytricks.wordpress.com/2008/11/....

the bailout is doublewammy for him - saved his assets AND raised the price of oil.

What could be better for the Saudis ?

The issue becomes you have people at every level who tried what they believe has "worked" (if you can call it that) before - only at a scale never before seen and now it is becoming clear that it was a failure. I don't know how anyone in this administration can argue with nearly every economic advisor fleeing. Did they run away because they thought things were going to be really awesome? "I really don't want to be around to take the credit during a time of immense prosperity that I helped create." No, they wanted to GTFO because they knew what they had created (or didn't, depending on how you look at it.)

We are now at the point where QE2 is winding down and you have a president who is "okay with one term" (as noted in another ticker thread) and sounds like he has really given up (not to be political or anything, but a president who is ambitious does not talk about one term with a year left.)

So, if Obama has largely thrown up his hands, then you have ... what? I suppose my concern is that there is no answer that I can think of.

We have thrown an extraordinary amount of money at the problem with no long-term plan and it is now becoming clear what I thought: that it was not sustainable and now we are largely where we started (on a larger-scale economic basis) and have spent trillions to get there. We spent x% of GDP and we didn't even get that back.

You do QE3 and you could get further cost increases, if not much worse.
You don't do QE3 and the market tumbles. You've already pretty much lost a generation of investors, but if the market tumbles without being propped up, you definitely have lost a generation of investors. That's really the least of our problems, too - you've got a whole host of problems and the money's already been spent.

I really don't see a way that we aren't inevitably screwed - it just depends on which direction. Many on this board believe in the deflationary outcome, I still strongly believe it could go either way - Bernanke goes down swinging, unable to admit failure (and not stopped by Congress, who just wants more printing because they can't handle difficult decisions) and becomes another Von Havenstein.

Either way though, I can't see a way that we're not in serious trouble - just inevitably. There's no way out of this that's good.

To make matters worse, I don't have any confidence in TPTB to handle serious problems in a manner that won't turn disorderly.

And now you have IPOs of internet companies that "don't promise profitability any time soon." (Pandora's CEO this morning.)

Gen,

Here is how I am reading this. Deflation is coming in a big way but we will drive prices higher anyway and pocket the difference.

They'll try but it won't work. Demand destruction (coming from purchasing power destruction) makes this outcome impossible.

So how does this play out?

Bernanke doesn't get the inflation he wants. Demand destruction plays out and we get another 2008. Now we've spent trillions and have wound up in the same place.

So...what happens after that? What do people view as the likely next steps?

The market clears - eventually - or there's a war. A big one.

The problem with "Big War" is that it has a high probability of getting out of control, and if it does.....

It shouldn't just be Bernanke put in jail. Every Federal Reserve member who upheld this monetary policy since the inception of the Fed.

I think it is pretty clear now that the Federal Reserve was always designed and implemented to be a looting mechanism. They control the Congress and the Congress has Article 1, Section 8.

Brilliantly, simple actually.

American citizens have been entirely defrauded.

Quote:

So...what happens after that? What do people view as the likely next steps?

Wage inflation! Ok, not really.

I've been saying the Fed's non-zero inflation targets are criminal for my entire adult life (I'm 50). I've been waiting a long time for this simple idea to get traction. Welcome to my world, KD, glad to have you around!

IMHO: There is a Big War; a World War, a World Wide Civil; underway -right now.

Call it Imperialism, Globalism, Uprising, Rebellion, War on Drugs/Terror/(Islamo)Fascism ; or whatever You like: it is a World War of resource conquest and debt peonage and ideological subjugation.

-& it is just beginning to really heat up...

Quote:

We need to add an "or else" to the Federal Reserve Act to proscribe punishment for violations of The Federal Reserve Act...

I don't usually point out typos, but I think this one changes the meaning you want. Shouldn't it be "prescibe" rather than "proscribe"?

Ben is either stupid or evil. Pick one.
I still think I could fix this mess with some good rope.

I'm going to go with evil; Given that someone in grade school can see what's happening.

Also, isn't debasing the currency a death penalty crime?

http://globaleconomicanalysis.blogspot.c....


Some time back Angela Merkel started calling for haircuts to bondholders on Greek debt which seems kind of peculiar seeing as the German banks have been reported to be in up to their necks on all of this European debt so you gotta wonder why she would be making demands for haircuts.

Wouldnt the German banks take a huge unacceptable hit?

The answer may be that the German banks are now holding CDS sold to them on these positions (mid crises yet!) by the usual suspects on Wall Street.

If BOFA made 9 billion in 2010 writing CDS imagine their total exposure seeing as these things sell for a fraction of a percentage point of the nominal value.

The US banks have probably lost trillions yet again writing insurance on positions that everyone already knew were doomed from the get go.

: )

The scam never ends.

Quote:

The Scam never ends

....backed by the future labor of the wage slaves on the planet.

Themortgagedude

Bernanke is kind of like a doctor. A doctor has a licence to practice medicine. Bernanke has a licence to practice monetary policy. Sometimes the patient does not fulfill his health potential.

Quote:

2% over 40 years results in a price index that is 239% of where it was on your first day of work.

While that may sound bad, the stealing by the criminal banking cartel is much more perverse.

http://londonbanker.blogspot.com/2011/05....

From the Yomiuri Shimbun today, about Japan's Nuclear Industry:

Quote:

Since 2000, power companies have sent at least 100 employees to central government bodies for on-loan postings, according to the government. These government bodies include the NSC and other offices involved in safety at nuclear plants. TEPCO, which has sent 32 workers to the government, had de facto reserved seats at several posts, sources said.

Meanwhile, 68 former industry ministry officials have parachuted into postretirement jobs as executive board members or advisers at 12 of the nation's power companies over the past five decades, according to the industry ministry.

http://www.yomiuri.co.jp/dy/national/T11....

Does this ring any bells? Do we expect it won't take an equivalent 'meltdown in all our reactors' before the same corruption and pursuit of profits by the likes of Goldman.gov with blatant disregard to the risk of widespread destruction will be exposed to the light of day? Unfortunately, for Japan it's too late, now that the crisis event has been triggered, they find themselves unable to contain the toxins from continuing to spew forth, toxins that will take decades to dissipate. I fear that may be an apropros analogy as well.

I think the word is "Repression"
been done before but we had a production base and the debt levels were not at this level. Cap rates a 2% and run about a 4% inflation. Kill the savers reward the debtors.

http://www.imf.org/external/pubs/ft/fand....

Prices are supposed to be stable, not the first derivative, Mr. Fed President! If you're supposed to be aiming for 0% inflation but have allowed 2%-3% inflation, why should I be comforted knowing that you'll declare to be aiming for 2% in the future.

Your 2% target will look more like 5% in reality...and you'll pat yourself on the back for a job well done!