Tuesday, April 20, 2010

The Truth vs. Ben Bernanke - How Do You Know Bernanke Is Lying?

A: His lips are moving.   Here's a direct quote from a speech Bernanke gave to the National Economists Club in 2002, when he was jockeying to become Greenspan's successor:

“U.S. Dollars have value only to the extent that they are strictly limited in supply. But the U.S. Government has a technology, called a printing press or, today, its electronic equivalent, that allows it to produce as many U.S. Dollars as it wishes at essentially no cost.”

The golden truth is that hyperinflation is a response to deflation and a Government's attempt to prevent deflation.  That is exactly what Banana Ben Bernanke is doing now. Gold has gone up in dollar terms 452% since its 2001 bottom at $250 - 16%/yr on average every year - without the benefit of any perceived price inflation. Imagine the move gold will make when Bernanke's monetary policies begin to translate into price inflation - imagine the move the mining stocks will make...

Bernanke's entire monetary foundation is based on the devaluation of the U.S. dollar. That's why gold has done what it's done over the last 9 years...Got Gold?


  1. for sweet jebus! when in good god are the junior miners going to go?!?!?! most of them r still stuck at the 08 collapse level!!!

  2. LOL. Soon I hope. It's absurd. They are reeeaaallly cheap - most of them.

  3. Dave, the stock market is making alot of people look like absolute fools... I won't be surprised we get monster highs when hyperinflation hits. Nice to see you haven't been shouting top on u'r blog everytime a correction happens. ;)

  4. I stopped speculating on the direction of the stock market a long time ago. Occassionally I buy AMZN or GS or AAPL puts.

    In fact in Nov 2005, when the Fed revealed that it would stop reporting M3, I predicted that the Fed was going to reflate the stock bubble to try and offset the wealth effect of the housing collapse. I said we could see the Dow hit 20,000 eventually and that gold would outperform the Dow by at least 2:1 and mining stocks 5:1.

    In Weimar Germany, the stock market went to incredible levels even though the population was going broke...