The Golden Truth: All Of A Sudden Banana Ben Bernanke Is Commenting On The Dollar..

Monday, November 16, 2009

All Of A Sudden Banana Ben Bernanke Is Commenting On The Dollar..

Historically, when questioned by Congress about the dollar, Bernanke has stated under oath that the Federal Reserve is does not comment or make policy decisions regarding the dollar, instead deferring all money supply and dollar policy decisions to the Treasury Department. Today Banana Ben had this to say (here's the article link LINK):

In a departure from normal practice that no official except the Treasury secretary comment on the dollar, Bernanke said the Fed is committed to a strong dollar. "We are attentive to the implications of changes in the value of the dollar," he said, adding that Fed policy would "help ensure that the dollar is strong and a source of global financial stability

I don't know about anyone else, but I find this change in policy by Bernanke to be quite startling. Either Bernanke is an outright liar - which we know is the case - or he has decided that the Federal Reserve will annex control of the money supply now. We can observe from the price behavior of both the stock market and gold that Bernanke is inflating the money supply and devaluing the dollar. Clearly he is NOT concerned about the relative "strength" of the U.S. dollar.

16 comments:

EdwardoMonday, 16 November, 2009
He's lying, Dave. That's all he has left. He can't be for a strong dollar, because that is tantamount to being in favor of runaway deflation. The wonder of it all is why none of the gutless wonders who question Helicopter Ben don't say, "prove it."
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EconomicDisconnectMonday, 16 November, 2009
The talk about the dollar has really ramped up as of late. The carry trade is none to popular with governments, but the traders love it!

Gold is reacting as it should to all this discussion about fiat money, and it looks like my beloved silver is breaking out today!

Re last nights game;
Pats really let one get away there, but that call on Faulk "bobbling the ball so no forward progress" was pretty lame. Still, the Colts would have scored if we gave the ball back anywhere on the field so all the complaining about the call is dumb.
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MacMonday, 16 November, 2009
Appears Poker night was a bust over at 33 Liberty.
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Dave in DenverMonday, 16 November, 2009
@Edwardo: agree man. was just discussing with Mac about how i wish Ron Paul would stop using his 5 minutes to show us how much he knows about Austrian economics and would fire off quick questions to Bernanke that make Bernanke's balls tingle with fright...

@gyc: dude, I know why Belichick did that, but I still disagree with the call. He has to let his defense have a shot a stopping Indy. It's easier to keep INdy from getting 65 yds than it is from getting 29. i don't think it was the right message to send his defense. they should have never let Seymour go either.

@Mac: let me know what you come up with on yacht rentals.
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EconomicDisconnectMonday, 16 November, 2009
Dave,
we can agree to disagree. If the defense was so awesome and could have stopped the Colts, they had ample opportunity after the faild 4th down. Instead they got dusted, just as they had all 4th quarter. Next time Brady and Co will have to score 42 points, oh wait, Maroney fumbled a walk in touchdown, dang it!
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anliuMonday, 16 November, 2009
Dave do you follow Denninger? He blames usd carry traders for hammering the usd down. And that the fed and treasury should actively defend the usd. This is only partially true. Carry traders are nothing more than maggots feasting on the dying usd. And how exaclty are we supposed to defend the usd? We have no savings, tax base is being decimated, while the government spends like a drunken sailor. If a Volker like action were done today the US government would default on all obligations, domestic as well as international. Next we will see Russian and Chinese war ships at our shores to make uncle sam to pay up.
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AnonymousMonday, 16 November, 2009
Dave:

Ron Paul hinted during the CNBC interview that they are prohobited in the type of questions they can ask.

Would be interested in seeing the "Rules" and who enforces them?

-Henry J. Galt
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EdwardoMonday, 16 November, 2009
Belichick started turning victory into defeat halfway through the 4th quarter when he directed an offense that had shown no difficulty in scoring touchdowns to begin "playing the clock." That was the beginning of the end as the momentum swung hard in the other direction.

And once the ball was turned over on downs he should have directed his defense to let Indy score immediately so the offense would have had some time to get his team into field goal range. A minute would have been plenty of time. I know, heresy, but they weren't going to stop Indy from scoring a TD, so act accordingly.
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EconomicDisconnectMonday, 16 November, 2009
Edwardo,
agree 100%
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MacMonday, 16 November, 2009
Dude, uttely depressing, will do on yatch rentals, are you a good pirate?
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MacMonday, 16 November, 2009
Finally broke down and added GT to my favorites menu bar... Utterly depressing.
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EconomicDisconnectMonday, 16 November, 2009
I am missing the inside joke I think.
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Dave in DenverMonday, 16 November, 2009
@anliu: Denninger, while understanding how corrupt everything is, is a lousy economist and market analyst. I don't follow his commentary.

As I'm sure you know, the dollar carry-trade exists because the Fed/Treasury/Obama are implementing policies that enable it to exist. It's not the trading community's fault. If I see a nickel on the ground, I pick it up. That's all the dollar carry-trade is. Free nickels because the Fed is lending out free dollars.

How would Denninger propose defending the dollar? The only way would be to jack up interest by a substantial amount, force the Government to run balanced budget etc. In other words, the Government/Fed would have to implement policies that would immediately throw this country into depression that would make the 1930's depression look like a Sunday afternoon tailgate party. We're headed there anyway, but may as well kick the can down the road for as long as possible, right?
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Dave in DenverMonday, 16 November, 2009
@Edwardo, gyc: agree with everything you guys are saying about the situation Belichick was facing BUT I still say, in that situation, you have to give your defense a shot at stopping Manning from 70 yards out instead of 30 yards. Plus a punt burns some decent time off the clock if there's not fair catch.

Tom "Tombstone" Jackson, one of my favorite defensive players of all time, commented tonight on ESPN that you have to let your defense try to win the game in that situation.

Having said that, I think they should have let Faulk to off-tackle on 3rd down, and they should have let him try to get the 2 yards on 4th.
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Dave in DenverMonday, 16 November, 2009
@Mac: LOL.
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Dave in DenverMonday, 16 November, 2009
@Henry: they may have guidelines regarding what kind of questions they can ask, but that doesn't mean that RP has to spend his 5 minutes pontificating on Austrian economics. There's plenty of questions RP can direct at Bernanke and he can request brief answers. Or he can do a "yes/no" format.

Grayson literally shredded Bernanke a few months ago. I wish RP would be a lot more agressive.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.