Fed Warns Congress No More Printing of Money

I ran across this on GLP and posted by RuhRoh

theeconomiccollapseblog.com... for-the-exploding-u-s-national-debt

Federal Reserve Chairman Ben Bernanke Warns Congress That The Federal Reserve Will Not “Print Money” To Pay For The Exploding U.S. National Debt


On Wednesday, Federal Reserve Chairman Ben Bernanke warned Congress that the Federal Reserve does not plan to "print money" to help Congress finance the exploding U.S. national debt. In fact, Bernanke told Congress that the U.S. could soon face a debt crisis as bad as the one in Greece if the U.S. government does not get things in order financially. This represents a fundamental change in policy for the Federal Reserve, because they have been enabling the massive borrowing by the U.S. government over the past couple of years by "buying" the majority of new U.S. government debt that has been issued. But now the fat cats over at the Federal Reserve have apparently changed their minds. Using uncharacteristic bluntness, Bernanke told Congress that the Federal Reserve is "not going to monetize the debt".

So why is the Federal Reserve changing course?

Well, there are a couple of possibilities. One is that the Federal Reserve could legitimately be concerned that the exploding U.S. debt could actually collapse the U.S. economy and ultimately the U.S. government.

You see, the Federal Reserve is a parasite. They make money for their owners by sucking money out of the U.S. government and out of U.S. taxpayers. So, just like any parasite, they must strike a delicate balance. They have to keep feeding off the host without killing off the host completely. If the host dies it could end up killing the parasite. So the Federal Reserve actually needs to try to keep the U.S. economy alive so that it can slowly keep draining it.

In fact, during his remarks to Congress, it certainly sounded like Bernanke honestly desires that the U.S. government will come up with a sustainable financial plan for the future....

"It is very, very important for Congress and administration to come to some kind of program, some kind of plan that will credibly show how the United States government is going to bring itself back to a sustainable position."

The second possibility is a bit more insidious. As we have written previously, it looks like "the financial powers that be" have decided to reduce the money supply, tighten credit and hoard cash. All of those things reduce economic activity.

This new public stance by Bernanke is right in line with that. If the Federal Reserve will not finance the exploding U.S. government debt, then either the U.S. government will have to dramatically cut back on spending (which would seriously slow down the U.S. economy) or the U.S. government will have to borrow from other sources at much higher interest rates (which will have very serious negative effects on the U.S.. economy). Either way, this new stance by the Federal Reserve is not good news for those hoping for U.S. economic growth.

The truth is that someday the exponential growth of the U.S. national debt will basically force the Federal Reserve to "print money", but for now it looks like the financial powers have another agenda.

From all indications, it look like that agenda is seriously going to slow down the U.S. economy.

That is likely to seriously anger American voters. Already, millions of Americans have lost their homes and their jobs, and things are probably only going to get worse.

The result is that there is likely to be an overwhelmingly strong anti-incumbent mood in the nation as we approach the election season of 2010. Even now, only 10% of American voters say that Congress is doing a good or excellent job.

That is not good news for the fat cats in Washington.

Not that we should feel sorry for them when they get voted out.

Uncle Ben turned the tables on them, did you hear?

Question was posed to Uncle Ben what his strat was for raising rates.

Then Ben asked congress what their strategy was and how they were going to quit spending so much.

... crickets ..

Then some goon senator had the nerve to call Uncle Ben out and say he didn't have the gull to raise rates.. This was on MSNBC or CNBC earlier today

Commentator then asked the Senator the same question that Ben asked earlier.. then you hear the same old rhetoric

1) I think congress is the REAL PROBLEM and their spending

2) You shouldn't call Uncle Ben out publicly, not a great career move

In fact, Bernanke told Congress that the U.S. could soon face a debt crisis as bad as the one in Greece if the U.S. government does not get things in order financially.

I wonder how long it took him to figure this one out.

I wonder even more why it has taken him so long to tell Congress.

I can't help but about all the craziness in Washington DC.

Good thing they had that useless health care debate.

Looks like the real President has made an executive decision and it needs to be carried out pronto.

Bernanke may have shown a flash of his stones...but he wouldn't do it against Ron Paul.

The biggest rat of all is jumping off the ship. I think we are in for a bumpy ride folks. They have run out of options they can not sell the debt and they can not print money to pay for it. We are truly screwed and if you can prepare it is only a matter of time it could be weeks or months or a couple of years something has to give. And if they can not find a war big enough the war will be on us it is the only way and history backs this up.

The fed has been circulating debt in a ponzi style scheme, for about a year now, through proxies to make it look like there's more demand for our debt overseas than actually exists. In short, we are already monetizing the debt.

[edit on 25-2-2010 by projectvxn]

"Bartender warns local 20-year alkie there will be no more shots of Wild Turkey" shoud be the headline.

too little too late in my opinion. They should have done this a year and a half ago.

reply to post by TrainDispatcher


Thanks for the great post. Yes, it's very difficult to figure out.
Meanwhile, in other news today, the President and Congress burped, put their heads back to the trough, and moved ahead with their discussions on a multi-trillion dollar health package.

I just ran across this from the WSJ, don't know if this has been brought up yet or not...




blogs.wsj.com...

Originally posted by projectvxn
The fed has been circulating debt in a ponzi style scheme, for about a year now, through proxies to make it look like there's more demand for our debt overseas than actually exists. In short, we are already monetizing the debt.

[edit on 25-2-2010 by projectvxn]

Exactly the nerve of these federal reserve jackasses is astounding. They do anything they want below board make unlimited funds from nothing. Then tell Congress no as there banking buddies and corporate cronies above board make more illogical gains above board then tell u come up with a plan.

SORRY BUT NO PLAN EXISTS TO PAY OFF A FINANCIAL INSTRUMENT TO WHICH DEBT WAS ATTACHED AT INCEPTION!

reply to post by TrainDispatcher


Hello,
This looks like something I should learn more about. I have nothing intelligent to post, other than I'll be watching how things turn-out.
Thanks for the item of concern OP.

so the fed prints loads of money gives it away to their cronies and then says to everybody else who hasn't seen any benefit of it, im sorry but in our debt based system you cannot have any more debt as we have already appropriated more than you can deal with so we are stopping your debt allowance evn though you haven't/wont see any benefit only more pain and hardship from what we have done to you.

sure reminds me of a nasty dealer and a person becoming a heroin addict.

Cold turkey hurts like a b*tch and tends to make the addict very angry and disturbed.

[edit on 25-2-2010 by The X]

reply to post by ISHAMAGI


The fact is, in front of cameras and even a minimal public audience he could NEVER say that the standing policy is monetizing. If he did China would dump their remaining reserves for hard value assets and resources and cut their losses. Japan would as well. They would be faced with a temporary crippling shock to their economy(forcing them to loosen up which is good) as opposed to watching their largest foreign invesment destroy their wealth entirely. They would have their own 1920, and we would simply collapse under the weight of our own currency and the debts they're attached to.

Originally posted by Raverous
too little too late in my opinion. They should have done this a year and a half ago.

It's a lot too late. They should have done this forty years ago instead of taking us off the gold standard -- it was 1971 under Nixon to be exact. A silver dime from 1964 (10 cents) sells for a dollar (100 cents) today, which also happens to be the price of a cup of coffee in 1964 vs. today. The banksters stole all that wealth right out of our pockets and we didn't even notice it. Heck, some deluded people even think they got richer during that period because they turned their dimes into quarters playing the stock market.



Just in case you think that M0 chart has some kind of data glitch at the end, here's a "hockey stick" monetary base chart straight from the horse's mouth.



So don't kid yourselves, they've already printed more green paper than we'll ever need or use. They're essentially recycling money at this point. How many new bills they print doesn't really matter, only the supply at any given point in time does.

I know there are plenty of arguments for both sides.

But I really think congress has a much bigger say in the direction of this country than Big Ben.

I think it is easier for congress/media to gang up on him than it is to actually be accountable for their own actions that have guided us into this mess.

Well there are claims out there that the treasury agents of the uSA have personally told the President of Mexico that the uSA would be on the Gold Standard soon. There where stories not long ago about overseas embassies buying lots of local cash and many other stories. It could be the Fed is gracefully being shut down or trying to intimidate congress. One thing for sure, there is a substantial battle underway behind the scenes and my bets are we're going to see justice return. Amnesty for the massive treason is the intended plan rather than create a civil panic / civil war. Thee are simply way too many criminals in government to make the public aware of what is really going on.

reply to post by GreenBicMan


Agreed. But it all counts really. And hopefully, someday, we will see it all before the court and handcuffs around their hands.

Great thread, great comments, interesting observations.

Given all its toxicity, the dollar is easy to worry about. Eventually it will suffer badly but as for now (next few moths) what other world reserve currency is there? The Euro has been even worse than the dollar.

I say buck Congress, the Fed, and all other forms of condescending authority.