Liberty Maven

Chris Martenson, author of the fantastic Crash Course on Economics, has commented on Ben Bernanke’s remarks to business leaders in Austin, Texas today. As expected, it’s not a positive review.  In fact the title of his article is “Bernanke – Still speaking as though to children”.

Bernanke’s remarks today did little to soothe this ruffled observer.  His remarks struck me as practically dishonest in their inability to speak directly to our actual problems.

WASHINGTON (MarketWatch) – The Federal Reserve has lowered interest rates just about as far as they can go, but the U.S. central bank still has plenty of available firepower it could deploy to restore financial markets to normal, Fed Chairman Ben Bernanke said Monday.

I wish that we could just get some straight talk about our actual condition instead of this weird insistence on “restoring our financial markets to normal.”  This ignores the fact that they were completely abnormal.  Why would we want to return there? I guess it’s this strange insistence on continually repeating the mantra that things can be “restored to normal” that’s got me unsettled.

The way I see it, there’s no “normal” to return to.  Things were hopelessly out of whack before and now they will settle into some new, different level of activity.

Then he quotes from a marketwatch.com article on the same subject, in which Bernanke was quoted as saying that “the Fed could also expand its efforts to supply liquidity directly to markets and investors, bypassing banks and other reluctant institutions.” Martenson was astounded by this remark:

Uh oh. This is a very ominous statement. Let’s imagine what mechanisms he might be envisioning to “supply liquidity directly to markets and investors”. All I can think of is a wire transfer or check directly from the Fed to these “markets and investors”. In the case of “markets” I suspect Bernanke is talking about buying stocks. The Fed granted itself the right to perform this function about 3 months ago and I guess Bernanke is reminding us that they may yet directly buy equities in an effort to support stock prices.

But directly to investors? All I can say there is that if you receive a check from the Fed spend it as fast as you possibly can as that will mark a turning point for our currency. If you don’t believe me, then we should take a road trip to Zimbabwe together because that is exactly what their Central Bank did early on in their current inflationary crisis.

Gold is down $50 right now.  Sounds like a great time to buy.

Read Chris Martenson’s full analysis here.