Money Matters: Bernanke Talks About Our Dying Banking System

Elaine Meinel Supkis

Bernanke backs up his Beige Book bilge with more mysterious mumblings that are designed to soothe investors and put Americans to sleep. He, like all the monsters bringing us this continuing nightmare of red ink, tells us we can't stop this and it is all too mysterious anyway and besides, we need free trade because it is making certain people very rich so shut up! I then found a Presidential Trade Deficit Commission that is now defunct! It has some nifty things including the same threats that no one dare mess with this free trade freight train that is derailing our nation.

From MSNBC:

Banks play an important, though perhaps somewhat diminished, role in providing credit as consumers and businesses increasingly turn to other financial players, Federal Reserve Chairman Bernanke said Friday.

"Banks do continue to play a central role in credit markets; in particular, because of the burgeoning market for loan sales, banks originate considerably more loans than they keep on their books," Bernanke said.

"Nevertheless, nonbank lenders have become increasingly important in many credit markets, and relatively few borrowers are restricted to banks as sources of credit," the Fed chief told a monetary policy conference in Atlanta.

I was on the forefront of 'Bernanke haters' from day one and I suspect there are now many more haters around these days. This lastest statement of this New World Order tool is typical. Banks provide credit? How? I can't see how this is possible! When he admits this ability has been 'diminished' he doesn't say how or why! And who are these other 'financial players'?

Heh. So here are some answers from the non-economist of Culture of Life News: Banks have little credit to extend to anyone anymore. They offer such miserable returns on cast deposited that we are in a negative savings rate now for several nasty years starting from the day Bernanke's demented forerunner, Greenspan, dropped rates to the absolute floor of slightly more than 1%.

Last night I painfully combed through this year's Federal Reserve reports and out of the huge stream of poorly-published numbers, I found theses babies: the USA's overall savings rate as money deposited in banks! And what an amazing series of numbers it is:

2001: $132.4 billions
2002: $184.3 billions
2003: $174.9 billions
2004: $174.3 billions
2005: $-34.8 billions
2006: $-96.4 billions---(note: in the 3rd quarter, last fall, it plunged to $-133.0 billion!)
2007: $-82.3 billlions

So, the banks aren't attracting much money, are they? Hell, they are losing money! Since the money they attract at say, 2% interest is then loaned at say, 5.45% interest on a mortgage and everyone makes money only...the banks are charging below the interest rates so anyone with any brains takes any savings and parks it in euros, gold or the stock market! All of which pay much better returns and none of whom give out mortgages.

So stage right enters the 'Financial players' who are nearly all dressed in black and have black names and they look suspiciously like creatures guarding the gates to Hades. These nasty folk get their money not from savers but from some other 'Financial players' who live in Tokyo and eat raw fish.

Since I know all this, why can't Bernanke say, 'Americans are not saving anymore, banks have no more money to loan for mortgages and now a bunch of unregulated hedge funds are funnelling money from Japan which is really our trade deficit funds, back into the USA in the form of loans'? It isn't that hard to spit out. He could hire me to write his speeches. I could write some scorchers.

Such as having him go to Congress and begin wailing, banging his balding head on the desk and screaming, 'THERE ARE NO RESERVES IN THE FEDERAL RESERVE! AAAAARRRGH!' Then he could draw his samurai sword and disembowel himself. Then all the politicians, bankers and hedgefunders could be arrested and put on trial. After all, the entire point of the secret meeting in 1913 that set up this secret organization that prints our money was, they would build up a huge reserve and then protect the dollar with it!

Well, they failed! And they shouldn't be allowed near any banks because they are incompetent.

And here are the dollars involved in this past real estate bubble:
2001: $686.4 billion
2002: $868.1 billion
2003: $992.6 billion
2004: $1262.3 billion
2005: $1442.5 billion
2006: $1271.3 billion
2007: $968.9 billion

This dramatic graph illustrates the housing bubble created by Alan Greenspan when he decided to 'fix' the mess caused by Bush's tax cuts, the .com stock collapse and 9/11: he dropped interest rates to nearly 1%. At that time, I was outraged when I found out my bank was going to pay me only 0.45% on my money. What the hell?

It has only recently crept up out of that pit to a pitiful near-2%. Gasoline rises more in one week than my account makes in one year. This is unsupportable but the scheme in international banking is to depress currencies for trade purposes. Only in this case, the only currency that is plunging in value vis a vis the rest of the world is Japan and their interest rates are lower than ours and this week they refused to raise them despite the yen falling like a rock!

From the Nikkei:

Foreigners Had Record 28% Stake In Listed Japan Firms In FY06

TOKYO (Nikkei)--Foreign ownership of companies listed on five of Japan's stock exchanges rose 1.3 percentage point to 28% in fiscal 2006, a fourth straight record.

I was expecting this news! The downside of making one's currency as worthless as Confederate dollars after Sherman's March to the Sea is that anyone can buy out the home country! And hitherto, Japan has successfully fended off invaders from Europe or China but thanks to the need to pretend they are part of WTO and the G8 nations, the Japanese have to let people buy up Japanese businesses! This disturbs them greatly! The USA has been esvicerating itself for a long, long time and has sold off over 50% (cement, for example, is 87% foreign-owned, sound recording is 95% foreign owned, etc.).

If Japan keeps its currency super-cheap, in 15 years, they will be where we are now. This bothers them and they are now wondering if they should raise interest rates. I suspect, due to total silence from China, the Chinese are actually happy that Japan is keeping the yen super-cheap. They have been raising the yuan relentlessly. The idiots who destroyed our Federal reserves think China raises the value of the yuan only if we twist the dragon's arms. This is ridiculous. We can't twist nothin' no'how.

And here is why, courtesy of the Federal Reserve's data collections---net government savings:

2001: $51.5 billion
2002: $-282.1 billion
2003: $-394.9 billion
2004: $-312.5 billion
2005: $-148.4 billion
2006: $-171.6 billion
2007: $-171.6 billion

That should be nyet goverment savings. Like, there are as much savings in the government as with bank depositors=nada. During the Greenspan regime of 1% interest, spending went wild and savings went deep into the red. These things are connected not that Bernanke can say this in public. Then we would have to arrest Greenspan for fraud and bank robbery!

Here are even uglier figures showing the irresponsibility of Greenspan and now, Bernanke--the Net Financial Investment figures:

2001: $-4.5 billion
2002: $-273.1 billion
2003: $-130.9 billion
2004: $-496.5 billion
2005: $-380.7 billion
2006: $-275.6 billion
2007: $-396.4 billion, first quarter

From Grandfather Hodges:

Foreigners now own more and more of America - - about $9 trillion of U.S. financial assets, including 13% of all stocks, 13% of agencies, and 27% of corporate bonds, according to Gillespie Research. According to the Federal Government Debt Report they also own 46% of Treasury bonds & bills. Additionally, they own real estate and factories.

On 16 June 2005 Federal Reserve Chairman Ben Bernanke told the Economic Club of Chicago "the towering U.S. current account deficit must be addressed, because currently we have a net obligation to foreigners of about $3 trillion. At some point, foreigners wouldn't want to continue to lend to us, and would want to get paid back."

Here he is yet again, saying the obvious but not obviously saying what should be said. Grandfather Hodges' web site is filled with data and graphs and is a good read but he is also a right winger who can't say the obvious, namely, Ronnie Reagan, his hero, is the con artist who let all this go utterly out of contol. For the biggest fraud of all, the Social Security Trust Fund was a front for raising taxes on the poor working class and giving huge tax cuts to the rich. And now, we have no Federal Reserves, 75% of the gold in Fort Knox is gone with the wind, the government spends all the Trust Funds and is still very deep in the red and the working class has seen their wages fall vis a vis inflation thanks to the Federal Reserve printing money while keeping interest rates too low.

Here is his graph for the Social Security robbery:

Here is a comparison of FOREX reserves broken down, per person, in several nations: From the Hodges Report:

1. USA with a mere $224.26 in international reserves per citizen, compared to >
2. China with $788 per person (despite its huge population)
3. Germany with $1,382 per person,
4. Japan with $7,011 per citizen,
5. and even tiny Switzerland with $8,689 reserves per person.

Japan has 31 times more reserves for each of its citizens than does the U.S.

And worse, most of these reserves, at least $3 trillion, are in American dollars which means our own reserves are tiny as a mouse compared to a pod of whales! The people running this bankrupt bank, the Federal Reserve, can only print more money, they can't undo this mess they created! And this means their only tool is...hyperinflation.

I stumbled across this Presidential commission to do something about the trade deficit back in the good old days when it was 10% the size of today's deficits:

Yes, Virginia, there really was a Trade Deficit Commission! And it was decommissioned in 2000 when the USA decided to turn a $50 billion a year trade deficit into a glorious $890 billion deficit. 17X bigger than when this group of ruling class elites...Rumsfeld???....GAH!....met to hash out solutions to the problems caused by the goons running the Federal Reserve and their New World Order puppets in government.

Click here to see who was chosen to 'fix' our massive trade deficits!

Where are these people? I read the transcripts of their last meeting and it was, as the Beige Book and all Treasury and Fed Reserve announcements, full of demented thinking punctuated by an occassional frisson of fear, they fretted about what to do only to fetch up on the rocky shores of 'free trade' which was supposed to be really good for us, too bad we are deep in debt and losing all our jobs, so sorry.

Here is one snippet of that awesome document this demented crew threw up into my lap:

Wilkommen to the New World Order, Seig Heil! I like the 'Trying to stop the global economy is futile'. Surrender, humans, or die! Yes, they insured that this would be futile. I would suggest this all came about because of one main thing: the USA hit its Hubbert Oil Peak in 1972 and since then, our importation of energy has climbed steeply to 70% of our annual use today. To pay for this, the scheme was for us to sell lots of value-added stuff to outsiders and then pay off this oil. On top of this, the Federal Reserve discovered, if we inflate the currency used to buy world energy, the dollar, then we pay for oil and such with increasingly worthless dollars and they would have to recycle this paper back here as fast as possible so it buys stuff before it declines further.

Only this scheme has failed utterly, like Wiley Coyote's plans. So not only do we have high oil costs that is sending much of our wealth to oil countries, we are also forced to outsource all our industries in order to get rid of inflation caused by the Federal Reserve printing money to make it more worthless! And this magnificent plan is a vicious circle! So, weakening the dollar is making OUR economy weaker! Duh. And it makes the trade deficit worse because the oil countries keep jacking up the price of oil.

Item #3 on the defunct Trade Deficit Review Commission talks about who will be hurt...without saying 'the workers'...and frets about how we can't run a deficit forever. But the claim there is no way to determine how long we can run up this flagpole is plain silly or better still, a total lie.

They know there are limits. They know what these are. And guess what? Just as I said the Chinese would start raising the value of the yuan once they get over $1 trillion in FOREX reserves, so it is with the trade deficit: when it crosses that frontier, we are doomed. Each day, just as our own government tracks the red ink, so do an army of Chinese accountants wearing green eyeshades and using giant computers that are focused on one thing: when the USA is ripe for bankruptcy.

In this section, they complain about lack of data. I agree. We don't have near enough data! But the reason for this is simple: what data we do have is already tremendously alarming. Everyone in DC should be running around, screaming, clothes on fire! There should be emergency meetings running everyday as everyone pores over the data and changes everything so we cease having this giant trade deficit, giant budget deficits, loss of savings and other bad, bad, things.

This can't wait! The Chinese are watching with eager attention. And so is bin Laden.

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Comments

When this mess deteriorates into chaos, the American people will put Bernanke in a bright orange jumpsuit and ditto Greenspan, if he's still alive.

Posted by: teddy | June 16, 2007 at 05:48 PM

As I say, 'Arrest them all!'

Posted by: Elaine Meinel Supkis | June 17, 2007 at 01:11 AM

Teddy,
By the first century Roman citizens had the best of everything. While living "high on the hog" their treasury shaved the coinage and crafted inflation schemes. In terms of purpose and resolve the Empire lost momentum. Their cities lost clout, infrastructure and the outliers became backwaters. I haven't found any stories about how outraged the public became to see it fall apart. Only when the cost of a jar of wine exceeded that for a loaf of bread did they riot.

By the time it was done Roman bureaucrats abandoned the place, managed to ingratiate themselves with lesser barbarian kings and made do stealing on a smaller scale.

Posted by: Cato | June 18, 2007 at 02:08 PM

We need to take action and get responsible people in congress, and not these crooks who take money from lobbyists for there future political agendas.Social Security needs to be untouched and anyone messing with it gos to jail.I remember when george W asked americans to eliminate the social Security trust Fund and instead substitute it with a stock market fund and that our return of interest whould be better.Whats are stock market looking like president Bush.It was the the most stupid thing I ever heard.This Administration has been an utter failure.

Posted by: edwin jewell | August 07, 2008 at 08:15 PM