Helicopter Ben Begs for an LZ

Via AP and RawStory:

"High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets and the broader economy," Bernanke said in a dinner speech to Columbia Business School in New York. "Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest," he said.

Bernanke (is he really still at the Fed's helm?) wants to end a banking crisis by just changing the numbers on the bank accounts. Forgive debt (contracts? We don't need no stinking contracts!). Let Fannie and Freddie put those of us who actually made good investments and make our payments every month on the hook for neg-am arms.

There's nothing more to be said for the failure named Bernanke. This says it all:

In his remarks, Bernanke did not talk about the interest rate policy or the state of the economy.

We've Learned Our Lessons

Last night a friend advanced the hypothesis that "we've learned our lessons." His implication was that the Federal Reserve Board is firmly in control of the money supply and there won't be a complete dollar meltdown. Ironically, that statement was made in the context of the Las Vegas housing market which is in the throws of a Fed-induced meltdown.

Even people like my friend that know we should all be as liquid as possible and heavily weighted toward hard asset investments aren't grasping the significance of the writing on the wall. The dollar is at all time lows, the current-account deficit is staggering, real price levels of staples (not the faux CPI-U which even ticked up hard last month) are rising incredibly fast, and, most tellingly, foreclosures are moving past sub-prime mortgages and cutting huge swaths in regular mortgages.

I think my friend treated the stats I threw at him incredulously, even though deep down he knows they are right. Not surprisingly, they are the exact stats that came up during Ben Bernanke's recent visit to the House Financial Services Committee (which I hadn't seen until this morning):




It doesn't appear to me that Bernanke has learned his lessons at all (even beyond the belief that the Federal Reserve can magically manipulate the money supply without doing a lot of damage).

Fiat Money and the Business Cycle

2008 Presidential candidate Congressman Ron Paul has, as one of his campaign issues, returning sound money from its current outlaw status. It's an easy process, actually, of reversing the steps by which fiat currency gained its hegemony. It is as simple as removing capital gains taxes on the items people may choose to use as money and calling off the dogs at the Treasury Department that are currently spreading personal opinions as legal fact in regard to alternative currencies.

Congressman Paul is promoting sound money with a populist message: the Federal Reserve is exacting an "inflation tax" by debasing the very dollars in your wallet. It's a simple message (simplified further by his supporters to "abolish the Fed") as far as it goes, and non-controversial from the standpoint that no one other than Ron Paul supporters has even bothered to notice it.

What I've noticed, though, is that Paul seems to be studiously avoiding the subject of fiat money and the business cycle. I have to wonder if he isn't missing an opportunity right now to talk about this far more lecherous effect of the federal reserve system. This will be a controversial topic - what better time to broach something controversial than when everybody seems to be ignoring you?

Respected economists and high finance types are going to start throwing bolts of lightning if an "abolish the Fed" campaign gains the least bit attraction. The axes that unions and corporations will throw at a non-corporatist candidate will pale in comparison.

Big investors, lenders, and borrowers are far too addicted to easy credit to give up without a big fight.

Speaking of...

...fiat currencies, sound money, and inflation, here's Congressman Ron Paul giving a speech at a campaign rally in Des Moines, IA, yesterday:

Part I

Part II

Part III