Congress, Barack Obama: Rein in Ben Bernanke
Mark Anderson
November 17, 2008
I was just checking out the Fed's balance sheet. Pursuant to the latest figures - as of November 13, 2008 - the Fed's balance sheet stands at over $2.2 trillion.
Not too many weeks ago, I was alarmed at seeing the Fed's balance sheet at over $1.5 trillion, which was up from below $1 trillion not too many weeks before then. Let me make this more precise: since September, Ben Bernanke & Co. have more than doubled the Fed's balance sheet!
If the loan market were to get "unclogged" and inflationary credit expansion proceeded the way central planners in Washington are planning, doubling the Fed's balance sheet would effectively lead to a doubling of the money supply. That is, of course, unless Ben Bernanke did the righteous-but-unimaginable thing of raising the reserve requirement (anything less than 100% is legalized fraud).
Gentle reader, the only thing standing between us and an inflationary holocaust is that enough banks still want real collateral before making loans. Thus the loan market hasn't been "unclogged" in this no-savings paradigm. For that, you can thank your lucky stars.
Ben Bernanke has got to be one of the most dangerous men in America. Bernanke has been busy trading his "liquidity" for junk with no collateral. Not that Bernanke would be any better if he was trading his "liquidity" for real collateral.
Bernanke's moves almost make me wonder if I could get him to buy some of my old love letters. Pursuant to the mis-named Monetary Control Act of 1980, the Fed can inflate to buy up anything. Bernanke's guarantees to every junk piece of paper will do what Osama bin Laden could only dream of doing: bringing America to her knees. If the Congress needs an issue to take up, reining in the Federal Reserve before this happens should be amongst one of the top few.
Not too many weeks ago, I was alarmed at seeing the Fed's balance sheet at over $1.5 trillion, which was up from below $1 trillion not too many weeks before then. Let me make this more precise: since September, Ben Bernanke & Co. have more than doubled the Fed's balance sheet!
If the loan market were to get "unclogged" and inflationary credit expansion proceeded the way central planners in Washington are planning, doubling the Fed's balance sheet would effectively lead to a doubling of the money supply. That is, of course, unless Ben Bernanke did the righteous-but-unimaginable thing of raising the reserve requirement (anything less than 100% is legalized fraud).
Gentle reader, the only thing standing between us and an inflationary holocaust is that enough banks still want real collateral before making loans. Thus the loan market hasn't been "unclogged" in this no-savings paradigm. For that, you can thank your lucky stars.
Ben Bernanke has got to be one of the most dangerous men in America. Bernanke has been busy trading his "liquidity" for junk with no collateral. Not that Bernanke would be any better if he was trading his "liquidity" for real collateral.
Bernanke's moves almost make me wonder if I could get him to buy some of my old love letters. Pursuant to the mis-named Monetary Control Act of 1980, the Fed can inflate to buy up anything. Bernanke's guarantees to every junk piece of paper will do what Osama bin Laden could only dream of doing: bringing America to her knees. If the Congress needs an issue to take up, reining in the Federal Reserve before this happens should be amongst one of the top few.
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