I’m not sure how they got the hidden cameras in the room, but here is Peter Schiff, donning a cowboy hat discussing economics with President Barack Obama. There seems to be something odd about their speech patterns and use of profanity though. This must be how they talk when they think cameras aren’t around.
by Michael Pento, Senior Economist of Euro Pacific Capital
Word on the street is that the Fed is now “out of bullets.” Many economists fear that in its efforts to spur recovery, the Fed may have already exhausted its array of monetary ammunition and that it has nothing left of significance to fire at the steadily advancing recession. They believe that since interest rates are already near zero and Fed policies have failed to inspire banks to expand commercial and consumer lending (despite ample bank reserves), the tools traditionally employed by the Fed have been rendered impotent.
To their credit, these commentators are 100% correct in asserting that the Fed can’t help the economy by printing more money. But it’s not because the Fed policy is without consequence, but because the Fed has always been incapable of creating real growth. All it can do is manipulate the purchasing power of money. By keeping prices from falling more that they would have naturally, Fed intervention has created a burden. Lower prices would have cushioned the effects of the recession for many people.
However, because it failed to spark faster GDP growth, most people now agree that Fed’s traditional ordnance, namely purchases of short-duration Treasuries from primary dealers in order to depress the yield curve, has lost effectiveness. But the Fed is never… ever… ever… out of ammo. In fact, according to Mr. Bernanke himself, the central bank may be about to unleash the heavy artillery.
Our central bank controls the printing press, so it has the ability to create money at will and use it to purchase anything it desires. It can and does purchase longer-dated Treasuries and other bank assets like home loans. If these funds are falling into the black hole of the banking system, there are ways for the Fed to cut out the middle man.
Today, Ron Paul, released the following regarding Obama’s speech last night.
And of course, he’s spot on as usual. Note that the picture associated with this post was not released by Ron Paul as part of the press release.
“The President’s announcement that all U.S. combat troops have left Iraq is no more believable than the ‘Mission Accomplished’ declaration was in 2003.
“Once again, we are being told the mission has been accomplished and our brave men and women are coming back home. Though the people are hopeful they remain skeptical, and rightfully so.
“The biggest problem is that success in Iraq is undefinable since the mission was never defined. The reasons given for the invasion were based on misinformation. Now, the war has cost us hundreds of billions of dollars and this has contributed significantly to our economic woes.
“Forty-four hundred Americans are dead, thirty thousand severely wounded, and more than a hundred thousand are suffering from serious health problems related to Post Traumatic Stress Syndrome. This alone should tell us that it was not worth the investment and the needless sacrifice of our young people and the taxpayers.
“It is deceitful to imply we will avoid hostilities with this new policy. We still have to contend with:
the 50,000 troops carrying weapons remain in Iraq
the 100,000 contractors that remain with more expected to go to Iraq
the 9,000 special ops personnel trained in assassinations that remain in Iraq
a huge embassy, bigger than the Vatican, that will remain
Dozens of military bases that will stay
Al Qaeda organizations that did not exist before the war
Muqtada al Sadr, a strong nationalist who has gained much political power
The fact that Iran benefits tremendously with the Shiites now in power in Iraq and is a close ally of al Sadr
“Osama bin Laden wins by ‘proving’ that America has an agenda of occupation in the Middle East. And, we continue to walk into his trap and hand him up his best recruitment tool in his efforts to incite hatred and terrorism against the United States.
“What’s worse, President Obama made it clear last night that the troops and resources leaving Iraq will not come home to defend our country or ease our economic woes. They will instead be diverted to Afghanistan, perhaps also Pakistan and, I fear, even Iran.
“From my viewpoint we are the losers in this fool’s errand of endless war. Tragically, this new policy is not one of peace but merely a charade that will severely undermine our national security and continue us down the path to bankruptcy—a threat that we best not long ignore.”
America is NOT the government, its workers, their unions, or career bureaucrats. It’s the people who go to work every day to make the money that supports their families and pays the taxes that keep the government going. THAT is America.
America is NOT the politicians, their aides, or their cadre of ‘experts’. It’s the people who dutifully show up every election to put their two cents in at the ballot box. THAT is America.
America is NOT the laws that are passed day after day after day. It’s the people who live their lives the best way they can, who don’t kill, cheat, rob and who go through life cheerfully following the two words that keep this country together: honesty and fairness. THAT is America.
America is NOT the news media. It’s the people who go out of their way to inform themselves on issues of the day and simply won’t accept whatever is printed or televised before them. They refuse to let people they don’t know make up their minds for them and more and more inconveniently question what our politicians and courts are doing to this country. THAT is America.
America is an idea, a concept, a conclusion held together by the sheer will of its people. THAT is America.
To paraphrase what I heard in Barack Obama’s speech earlier tonight…
- We’re bringing our combat troops home from Iraq… and sending them to risk death in other no-win wars.
- But we’re gonna keep about 50,000 troops in Iraq to… do what they’ve already been doing since around 2005… nation-building.
- Sometime in 2011 we will remove all U.S. military troops from Iraq (yeah right) but we will leave behind a private “force” to continue our nation-building there.
- Though George W. Bush was a patriot and we may have disagreed on a bit of foreign policy minutia we are in large agreement that we must continue breeding hatred for all things America by shifting our focus toward different faux-monsters to destroy in far away lands.
- Yes, like George W. Bush, I have trouble going to sleep at night because there are terrorist monsters under America’s bed. I don’t care if you can’t see them when you turn on the light and look. They are there! I swear!
- We spent far too much money on the Iraq War so we must bring it home and spend it on entitlement programs then borrow perhaps another trillion or so to copy our Iraq effort in Afghanistan and who knows maybe we’ll do the same in Iran or Pakistan a bit later. This will be sure to help our economy here at home.
- God Bless America because we need all the help we can get with me as your president.
- You should have all voted for Ron Paul. Let’s hope you get another chance in 2012.
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That about sums up what I heard from President Barack Obama tonight. The non-paraphrased version is available too. I assure you there is not much different than my condensed version except for maybe that last Ron Paul bit.
This scheme of legalized theft actually fosters additional corruption, as demonstrated in the sample letter below. Please use the new evidence we provide to send Congress another letter arguing that . . .
Civil asset forfeiture laws should be made illegal.
President Obama’s hardcore supporters aren’t wasting any time trying to get the Obama administration another vote for their radical left-wing agenda. In Kentucky, they have started an intense door-to-door campaign urging voters to support “Obama-friendly” candidates like Jack Conway.
Louisville WHAS 11′s political reporter Joe Arnold has the scoop:
Supporters of the policies of President Barack Obama knocked on doors in Louisville and Lexington over the weekend, as part of the “Moving America Forward” canvass to “support Democratic allies for President Obama.”
Presumably, that includes candidates for federal office, Jack Conway and John Yarmuth.
According to a release from Organizing for America-Kentucky (OFA-KY), volunteers are reaching out “to 2008 first time voters, sporadic voters, and newly registered voters to talk to them about the importance of electing Democratic allies for President Obama who will keep the country moving in the right direction.”
As President Obama has made clear in recent weeks, this election represents a choice between Democrats who have worked tirelessly to move the country forward or a return to the failed Republican policies that set the country in the wrong direction. Since taking office, President Obama and Congressional Democrats have passed historic reforms to the health insurance industry and Wall Street, and pulled the American economy back from the brink of depression.
Jack Conway was named by Senator Robert Menendez, leader of the Democratic Senatorial Campaign Committee, as “the next Obama.”
Voters should question why Jack Conway used his support for ObamaCare in the primary to defeat the conservative Democratic candidate Daniel Mongiardo – Jack also pandered to the left on the Bush tax cuts against Mongiardo, only to pander back after the primary (the media did not report it) – but, now, Conway does not campaign on his support for the extreme Obama lead takeover of the health care industry.
But the similarities don’t stop with ObamaCare, several of Jack Conway’s limited issues listed on his campaign website resemble Barack Obama campaign pledges; especially, Jack Conway’s “jobs plan.”
Is Jack Conway the next Obama? Or was Barack Obama’s platform a one-hit wonder?
Jack Conway faces Dr. Rand Paul in Kentucky for the senate seat being vacated by retiring United States Senator Jim Bunning.
Watching economists and media analysts react to breaking economic news is a bit like looking at a flock of pigeons flying over the New York skyline. A true wonder of the urban landscape, the flocks can include hundreds of individuals who show an uncanny ability to stay in tight formation as the group quickly zig-zags between buildings. What may be even more remarkable than their ability to randomly fly while maintaining cohesion is the flock’s refusal to stick to any particular direction for very long, and their determination to fly feverishly without actually going anywhere. Sound familiar?
Today’s weak GDP numbers have finally caused the mass of economists to revise downward their formerly optimistic recovery forecasts, with many finally entertaining the possibility of a “double dip” recession. It should be obvious by now that these economists only have the capacity to describe where the economy is moving in the short-term…they have no ability to explain the reasons behind the macro trends or make predictions that go beyond the next data release. But economics is not dart throwing. It can be understood and properly forecast.
The major mental block is that most economists believe that an economy grows as a result of spending. Any policy that encourages spending and discourages savings and investment is considered beneficial. Unfortunately, these policies, which only succeed in growing debt and government, act more as an economic sedative than a stimulant.
On the subject of the “recovery,” I’d like to highlight some of my past predictions, and those of my colleague Michael Pento. With the benefit of hindsight, you can see that although these thoughts were widely dismissed as chronic pessimism at the time of their publication, the current situation supports our conclusions. Although some of our predictions, like for higher bond yield, have yet to materialize.
Michael and I may be birds of a feather, but we don’t blindly follow the flock. We believe economics is a scientific discipline with established laws, and that applying those laws will yield fairly accurate predictions over time. Most other economists say what they need to say to appease their employers (whether on Wall Street or in Washington) and maintain the respect of their peers.
by Michael Pento, Senior Economist of Euro Pacific Capital
I’ve made a living out of exposing economic fallacies, but there’s one whale that I can’t seem to harpoon. Even top-flight Wall Street analysts seem to believe that the Fed’s doubling of the monetary base after the credit crunch has not had an inflationary impact on our economy. Their logic can be summed up like so: “The money the Fed created and dropped from helicopters has all been caught in the trees.” In other words, the Fed is creating money, but it is just being held as excess reserves by the banking system instead of being loaned to the public. Therefore, the money supply hasn’t truly increased, there is no money multiplier effect, and aggregate price levels are behaving themselves.
But this is only a half-truth. Yes, most of the money created by the Fed has been kept by commercial banks as excess reserves. However, the Fed doesn’t conjure reserves by magic. It first creates an electronic credit by fiat, then purchases an asset held by a financial institution. Those primary dealers then deposit that Federal Reserve check into their reserves. The act of creating money from nothing and buying an asset — be it a Treasury bond or Mortgage Backed Security (MBS) — drives up the price of that asset in the open market. Those price distortions send erroneous signals to private buyers and sellers, eventually creating gross economic imbalances.
Therefore, the inflation created by the Fed first gets concentrated in whatever asset it has chosen to purchase – before spreading throughout the economy.
Liberty Maven
