The Other Big Ben

QE2 Paul Ryan vs Ben Bernanke

Today – 02-09-11,  the House Budget Committee Chairman Paul Ryan challenged Federal Reserve Chairman Ben Bernanke’s policy of so-called quantitative easing – the printing of new U.S. dollars to buy government debt – and raised concerns that a weakened dollar and inflation could cause the loss of the currency’s global reserve status.

“There is nothing more insidious that a country can do to its citizens than debase its currency,” Ryan told Bernanke.  “Chairman Bernanke, We know you know this. We know that you’re focused and concerned about this. The Fed’s exit strategy and future policy – it will determine how this ends.”

Ryan said he believed a “course correction here in Washington is sorely needed.  Endless borrowing is not a strategy,” he said. “My concern is that the costs of the Fed’s current monetary policy – the money creation and massive balance sheet expansion – will come to outweigh the perceived short-term benefits.  It is hard to overstate the consequences of getting this wrong. The dollar is the world’s reserve currency and this has given us tremendous benefits in the global economy,” Ryan said.

Bernanke, in his opening statement defended the purchase over the last two years of almost $1.7 trillion in U.S. debt as having kept interest rates low and as having injected liquidity into the markets and the economy to sustain bank lending and consumer spending. “By easing conditions in credit and financial markets, these actions encourage spending by households and businesses,” Bernanke said. “A wide range of market indicators suggest that the Federal Reserve’s securities purchases have been effective at easing financial conditions, lending credence to the view that these actions are providing significant support to job creation and economic growth.”  Bernanke said a Federal Reserve study found that the QE policy has created or saved as many as 3 million jobs. “It could be less, it could be more, but the important thing to understand is that it is not insignificant,” he said.

I have to ask the questions:  Who the hell does Ben Bernanke think is the recipient of all these bank loans he says are taking place?  Americans can not even sell their homes before they are foreclosed on because banks will not lend the money to prospective buyers!  Houses sit on the market at ridiculously low prices and people can’t buy them unless they can pay cash!  Is that the “sustaining of consumer spending” that Ben is touting?  What difference does it make if interest rates are low and the majority of people can’t get a loan? In short, that doesn’t work Ben!

The only “liquidity” that got injected into the “markets” is on Wall Street!  Sure, stocks are back up to pre recession levels but Americans are still out of work.  The bogus media and the mistrusted administration in the White House tells us that unemployment just went down but only a handful of trustafarians are believing this spin.  That lie came to bolster the stock market, as traders are the only ones profiting.  Those that have jobs are doing twice the work as most corporations rake it in on the stock market.  Their bottom line has to improve when the payroll and admin is cut in half.  Could Ben have been a lot more specific on just where these jobs that were created are located?  Could you please just tell us where this “economic growth” is taking place – other than Wall Street?  (and do it with a straight face)  Cities and States are fighting and wrangling to keep from going bankrupt and you are talking about economic growth.  American citizens are filing for bankruptcy protection in record numbers.  More banks have failed and closed in the past two years than any other time in history.  Your statements to Senator Ryan and those that read them just don’t make good sense!

The second round of QE – which is $600 Billion dollars compared to the first round total of $1.25 trillion – is currently half done, Bernanke said.  Under questioning, he said that if the economic recovery was still stagnant in June when QE had run its course, “we would have to think about additional measures.”  So Bernanke and co. has already dropped over a trillion dollars and the average citizen is still reeling.  They still have another 300 billion dollars to spend and if thats not enough, he’s ready to fire up the press again!  Most Americans and the leaders of all the other nations in the world thought this printing press solution was a bad idea but Bernanke did it anyway.  Here’s a clue Ben and tell this to your buddy Senor’ Obama:  Americans living on Main Street really don’t want to deal with your Central Bank or World Bank or New World Order or whomever it is that you guys are trying to prop up.  Work for America or have the decency to step aside.  I just pray that someone will be watching your personal bank account and who writes the checks you cash.

Brian Gray

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