Ben Bernanke announced his two policies last week. One is public and called Operation Twist. The other is less publicized. But both are devious and can permanently ruin your life and the lives of 7 billion other people.
Operation Twist is Bernanke’s much publicized scheme to take short term US Treasury debt when it comes up for renewal and roll it over or renew it as long term debt to force long term interest rates down.
Ben will tell you this will lower 30 year mortgage rates and help people buy homes. It also allows the Treasury to finance the US debt more cheaply. He wants gross interest on that US debt to remain at 500 billion dollars a year and not skyrocket to a trillion dollars a year.
Critics have said the real unemployment rate is 23% and people rightly fear that it will go past 30% so they do not want to take on any new debt by buying a home. And low interest rates make the purchase of Treasury bonds not very appealing because the real inflation rate in America is 11% and 12% in the UK.
The markets since Bernanke’s announcement have been very negative. In these times people are more worried about the return of their capital than the return on capital. The dollar has increased 5% in value because people are moving capital at the drop of a rumor and even obviously false rumors at that. That made the dollar look good last week but can just as easily make the dollar look really bad next week.
Bernanke’s lowering interest rates fits very nicely into President Obama’s only plan for curing unemployment. Dr Michael Hudson says Obama’s only plan is to cut wages 30% so America will stop losing jobs. And sharply lower wages will somehow create jobs or so the trained seals say. I grant America could export more food but higher food prices would cut wages, Of course that is the Obama-Bernanke policy.
Now let’s talk reality.
Ben wants to keep interest rates low so his bankrupt banker buddies can hold trillions of dollars, euros and pounds in toxic assets on their books for a little while longer. Or at least until that Great and Glorious Day when the bankers have stolen everything from us and it all belongs to them.
But Ben’s greatest trick is the Monetary Base or M0. He created 2 trillion dollars at zero interest which he gave to the big banks. The banks in turn buy Treasury bonds. Until last week the banks had it made. By lowering long term rates Bernanke is not only devaluing the dollar and lowering real wages he is forcing money from M0 to M2.
His 2 trillion stashed at the FED was M0 and was called sanitized debt. Forcing the bankers to move their debt from the FED to their banks just increased M2 money supply is called Monetizing debt. Under fractional reserve banking, the banks can loan out ten times as much as they have on deposit. The current M2 Money Supply which is cash plus checking account money is about 10 trillion dollars. Under the rules of fractional reserve banking, the banks can increase the money supply by 20 trillion dollars to 30 trillion dollars. That might be a tad bit more inflation than you would care to have in your life.
Also last week the Rothschild owned BNP Paribas bank was not able to borrow money from New York banks because bankers know the other guys cannot pay them back.
The FED found that a trillion and a half dollars in short term deposits had been pulled from the big European banks. Some were owned by the Rothschilds and others were candidates for acquisition by them. The FED, the Bank of Japan, the Bank of England and the Swiss National Bank created a couple of trillion dollars which they used to swap for euros.
Previously, I mentioned that the FED had created 16.1 trillion dollars of which he used 6 trillion dollars to buy fraudulent mortgage loans the big US banks had sold to the Europeans. He did that to keep American criminals from going to jail for mortgage fraud. He might have to print up another couple of trillion to buy back dome more fraudulent loans still in European banks. But a lot of those toxic assets are held by German Savings and Loans and not on Rothschild hands so I guess that means they do not matter to Bernanke.
Think of a few elderly men playing a weird game. They are sitting around a table with piles of bad paper. They create even more bad paper and move it around the table. They have done nothing to make things better for you.
I get letters from Europeans asking me if the money the FED is creating will solve their public or Sovereign debt crisis and bring an end to Austerity.
Let me make this perfectly clear.
The Fundamental Fact of Your Existence as a modern man or woman is that the bankers of New York and London want to reduce you to debt slavery.
The whole point of income taxes, VAT, sales taxes, fees, property taxes, Central banking, the Federal Reserve, fractional reserve banking, debt money, usury, wars, the War on Terror, Bailouts, currency swaps by the trillions and even Operation Twist is to transfer all wealth from you to the banks and to reduce you to debt slavery.
Tax increases and Austerity cuts fit the pattern of taking real wealth from us in exchange for paper debt money. It will continue until you arrest the criminals in charge.
What Bernanke said last week with Operation Twist and did with multi-trillion dollar currency swaps is to say with his actions that he is going to accelerate the inflation rate. That means that Bernanke and his banking friends will speed up the rate at which they steal your money.
That faster rate of theft means that you and your fellow countrymen will just hit the wall sooner rather than later.
Hugo Chavez Gold Update: Poor Hugo has not seen one ton of his 211 tons he is owed.
Silver Update: Silver depositories report that people are pulling substantial amounts of money from mutual funds and investing in silver bullion but not so much gold. We might soon see a day where silver bullion separates from the paper markets. I still predict silver will go higher in November. The G-20 meets at Cannes on November 4th.
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