Simply put: Bernanke, The Fed (Federal Reserve), The dollar, Inflation, Deflation

By: Joshua Gamen

Fed Chairman Ben Bernanke was on TV last night(60 Minutes). And it is important that this issue be discussed.

First off, did anyone else notice how shaky he looked?? Hard to blame him, anyone who is going in front of the whole world and trying to keep an illusion going and blatantly lie, would be thought to be a littler nervous. I wonder if after seeing the interview, the World Bankers aren’t wishing they had Obama be the Fed Chairman instead of the President. After all, let’s be real, the Fed Chairman has more power than the President anyways.

Bernanke “claims” he has two main concerns: unemployment and deflation. He says that at the end of the economic peak of last year(don’t feel alone if you didn’t know there was one) 8.5 MILLION JOBS in America were lost, and since then, only 1 million jobs have been created. He says it could take 5-6 years to get back to normal levels of unemployment.

But let’s be REAL. The real unemployment in our country today is much, much, muuuuuuuch higher than what is being claimed. If you factor in the people who have gone more than the 6 months on unemployment and still can’t find a job, the people who have simply given up looking, and the people who are technically “employed” but don’t make enough money to pay for food, clothing, and shelter, then you are looking at a rate of 22% unemployment – and growing. We will soon be to great-depression levels of unemployment. As was put very well by the National Inflation Association:

“Bernanke’s(The Fed’s) policy of printing more money and creating inflation will not create jobs because the money the Fed creates is going to fund non-productive and wasteful U.S. government spending. The only jobs being created are artificial government jobs.”

Truth be told, we are far from reaching a gold bubble, but we are in a bubble alright. A U.S. government spending bubble. I commend our government for looking at ways to cut our deficit right now, but the truth is, there is no way that can physically do enough, no matter how much they cut back. Government spending is up 108% from 10 years ago. This spending bubble will eventually go bust when the U.S. Dollar becomes worthless and the U.S. government can no longer meet it’s obligations.

Bernanke says we should only be concerned about the long-term deficit, “Because in 10, 15, 20 years from now the entire budge will be spent on Medicare, Medicaid, Social Security, and interest payments on the debt, and there will be no money left for the military or other services the government provides.”

Right now, the truth is that social security, medicare, and medicaid are broke. We are simply financing these payments to these government programs by the taxes we currently paid. The money that our parents and grandparents are receiving right now from those programs is our taxes, as the money that they contributed to those funds was spent by our government a long time ago.These government programs are estimated to be 50-60 Trillion Dollar time bombs!

Countries usually see hyperinflation of their currencies once interest payments on their national debt reach 50% of tax receipts. The U.S. is on track to reach this limit in the next 5 years. So my response to Bernanke saying we only need to be concerned with “long-term” deficits is this: WE NEED TO BE CONCERNED WITH HAVING OUR CHECKINGS, SAVINGS, AND 401 ACCOUNTS WORTH ANYTHING IN 5 YEARS(AKA SURVIVING), BEFORE WE WORRY ABOUT SURVIVING THE NEXT 10,15, AND 20 YEARS.

Bernanke said on TV last night, that inflation is “very very low” and that this is a major concern to him because we are very close to falling prices(deflation). He says the problem with this is that it would lead to falling wages. He said that the risk of deflation is now very low, but only (props to himself)because of the $600 billion in “quantitative easing.” He claims that if they had not acted the way they did with the $600 billions, deflation would be a more serious concern.

The TRUTH: inflation is not very very low. The best gauge against inflation has, and always will be the price of gold. Gold, at the time I am writing this, is at $1,425 per ounce! If deflation was a true risk, as Bernanke claims, we would be seeing the price of gold dropping, NOT SOARING! The Fed’s actions have now made deflation absolutely impossible and we need to be concerned about the risk of massive inflation, even perhaps hyperinflation. If we really were to see deflation, this would actually be a good thing, because our savings and incomes would be worth more and prices of things like food and energy would become cheaper.

The reason so many people have talked about deflation and believed the Fed that we have been seeing deflation is simple. Over the past 2 years of our nation’s economic collapse, we have been hit so hard, so fast, they we have had to drop prices in the things we produce, just to make trade still possible in our community. The issue of us not having enough money in circulation to have a strong economy is not that there is a lack of dollars, it’s that there is a lack of dollars to our middle and lower class. The ultra rich and banks have profited from the bubbles we recently rode through, and are still profiting. So devaluing the dollars that we, the people, do have DOES NOT HELP, it hurts us more. A real solution would not have been to print more money, but to let the banks fail when they ran themselves into the ground.

Bernanke claims that those of us who view the Fed’s actions as inflationary are “not looking at the risk of not acting.” He goes on to say that fears of inflation are “way overstated.” He claims it to be a “myth” that the Federal Reserve is “printing money” because “the money in circulation is not changing in any significant way.” To which I reply:

Yes, Mr. Money Manipulator. You are correct about one thing, you are not actually “printing money.” It is in fact just a digital accounting on the computers. A very large digital number that you are creating…However, the Fed’s(M2) money supply(which for all practical uses means the money in circulation plus the money people have in savings) has risen by $44,900,000,000(FOURTY-FOUR BILLION, 900 MILLION dollars) to $8,809,200,000,000(EIGHT TRILLION, EIGHT HUNDRED AND 9 BILLION, TWO HUNDRED MILLION dollars) over the past MONTH.

If you annualize this increase, that is a 6.1% increase in the M2 money supply. This simply means, if you buy food, clothes, or gas, you realize that we are seeing 6% increases on the costs of these things. Compared to the CPI(consumer price index)’s rate of 1.17%. Obviously the CPI is skewed by technicalities and cannot be relied on for any practical purposes.

Furthermore in the TV interview, Bernanke admitted that he did not see the collapse in 2008 coming. He used the excuse that the Fed did not have oversight of AIG or Lehman Brothers, and that if the Fed had (even)more powers, they would have seen the crisis coming.

Interestingly enough, may economists did see the collapse coming. Robert Kiyosaki(author of Rich Dad Poor Dad) has talked about the coming collapse for the last decade. Many Austrian economists warned about the collapse we saw, and all of these economists that warned of the collapse, are now warning about massive inflation coming our way. To again quote the National Inflation Association:

“It doesn’t make sense for Americans to trust Bernanke about inflation when he was wrong about the housing bubble and just about everything else.”

Bernanke went on to say that the gap between the middle class and the rich is due to lack of college education.

Yes, lack of FINANCIAL education. But really, the reason for the income gap between the middle class and the rich is inflation. When the Fed prints more money(Oh I’m sorry…I mean “digitially enhances” the money supply), it steals from the incomes and savings of the middle class and transfers this wealth to the banks and Wall Street, who have access to the Fed’s cheap and easy money. It has nothing to do with college education. Actually, the Fed making it so easy to go to college and get student loans has caused a college tuition inflation crisis.(Note the increase cost of a college degree over the past decade)

We cannot trust Bernanke, or the Federal Reserve. They have continuously lied to us and been wrong about everything. It is all smoke and mirrors and the unemployment and rising prices we are all seeing is starting to expose the truth. How much more can we take?!

It is important for all of us to get REAL financial education. I encourage you to follow the me(Joshua Gamen – http://www.joshuagamen.wordpress.com ), Robert Kiyosaki, and the National Inflation Association. Think about what you are seeing in your lives and try to make common sense of it. Don’t get wrapped up in the fancy financial language that is printed in the newspapers and rambled off on the media. Only together, can we start to unwind the damage that the Federal Reserve has caused over the last 100 years.

Our middle class is our strength. We have brilliant, motivated, strong, driven people. We have the finest businessman, athletes, engineers, teachers, doctors, entrepreneurs, builders, and computer programmers in the world. We are the world’s powerhouse, and we need to maintain it. No more can we let a currency manipulation from the Federal Reserve and World Banks hold us back. We have produced so much in our Nation’s short history, and we need to continue to contribute to mankind and produce more for our coming generations. We don’t need the fed, we don’t need debt. We need REAL.

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One comment on “Simply put: Bernanke, The Fed (Federal Reserve), The dollar, Inflation, Deflation

  1. Are food prices higher than a year ago? Yes. Are gas prices higher than a year ago? Yes. Is tuition higher than a year ago? Yes. Inflation is here, people.

    “Inflation is very very low and that’s a concern to us…” HAHA!

    That’s why I don’t watch the evening news or any other mainstream media, they can skew anything to make the public to believe just about anything.

    Josh, keep up the great work man, you have really figured it out. I look forward to your other posts.

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