- David Wessel's new book, In Fed We Trust, is the latest
in the media conspiracy to propagandize the Federal Reserve as the "fourth
branch of Government" and "essential to the nation's financial
survival." The PTB trotted out the economics editor of the Wall Street
Journal, David Wessel, for this massive disinformation effort. He has been
doing the TV interview circuit almost non-stop since the book's publication
in late July, and not a single journalist has challenge him about his one
sided, apologetic view. Wessel was given exclusive access to the big three
insiders who run this show (Bernanke, Paulson, and Geithner) so it is only
natural that he writes this book from their carefully crafted half-truths.
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- The NY Times was a typical promoter of the book. "In
these pages Mr. Wessel, the economics editor of The Wall Street Journal,
chronicles how the Fed chairman Ben S. Bernanke, with Henry M. Paulson
Jr., then the Treasury secretary, and a small group of associates, frantically
worked to shore up the United States economy, capturing how this handful
of people -- 'overwhelmed, exhausted, beseeched, besieged, constantly second-guessed'
-- tried to catch and stabilize one toppling fiscal domino after the next."
Sure, but nary a word about their feverish attention to refilling the empty
coffers of the major insider players who milked the system dry.
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- The Random House blurb says, "Believing that the
economic catastrophe of the 1930s was largely the fault of a sluggish and
wrongheaded Federal Reserve, Bernanke was determined not to repeat that
epic mistake. In this penetrating look inside the most powerful economic
institution in the world, David Wessel illuminates its opaque and undemocratic
inner workings [that's an understatement], while revealing how the Bernanke
Fed led the desperate effort to prevent the world's financial engine from
grinding to a halt."
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- This book is a total and complete apologist's view, almost
worshipful in tone. In no case does he give the opposing view, except as
a token introduction to the carefully prepared rebuttals of Bernanke and
Paulson that he showcases and amplifies. Even Reuters noted there was room
for deeper investigations on what really went on behind the scenes: "Former
U.S. Treasury Secretary Henry Paulson talked often to the head of Goldman
Sachs at the height of the credit crisis but [claimed he] did not actively
seek to help the bank he once ran, a spokeswoman for Paulson said on Saturday
.The New York Times on Saturday reported records of two dozen conversations
between Paulson and Goldman chief executive Lloyd Blankfein the same week
last September that rival bank Lehman Brothers collapsed and insurer American
International Group -- closely connected to Goldman -- was rescued with
public funds. Goldman was a major beneficiary of the AIG bailout, receiving
nearly $13 billion in counterparty payments ultimately funded by taxpayers,
according to AIG disclosures in March. The company insists that it was
fully collateralized and hedged against those positions in the event of
an AIG failure, so it had no material economic exposure to the bailout."
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- All of this is a concerted effort on the part of the
establishment to halt the movement to audit the fed and curtail its independent
powers. Obviously the PTB are very worried about the following response
to Wessel's book by a blogger: "Now he [Wessel] is playing politics
by describing violations of secrecy as being violations of 'independence.'
What is the real reason Bernanke doesn't want the records for where our
loans and money are flowing to ever be released? --not in one year, not
in two years...never. He is a criminal trying to hide his crimes."
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- The constant barrage of positive spin emanating from
the news media is keeping the public in a hopeful mood, but it's not having
any real effect on the economy, except in those areas where the US is directly
injecting money--such as the wasteful "Cash for Clunkers" program,
or the Federal and State incentive payments being offered on the purchase
of a new home. Without these artificial injections of cash, these two markets
would be going nowhere.
-
- As Reuters pointed out, "For the first time, more
than 34 million Americans received food stamps in May, the government said
on Thursday, another symptom of the longest and one of the deepest recessions
since the Great Depression. Enrollment surged by 2 percent to reach a record
34.4 million people, or one in nine Americans, in the latest month for
which figures are available. It was the sixth month in a row that enrollment
set a record. Every state recorded a gain, and Florida had the largest
increase at 4.2 percent."
-
- Paul Craig Roberts talks about government figures that
manipulate the official view of the economy. "'U.S. Stocks Gain, Treasuries
Drop as Unemployment Rate Declines. 'Let's have a look at the reported
decline in the rate of unemployment. Do you believe that the US auto industry
added 28,000 jobs in July amidst GM bankruptcy, sell-off and close-down
of GM auto divisions, and demise of GM suppliers? No? Well, that's what
the Bureau of Labor Statistics reported. The 28,000 new jobs were created
by 'seasonal adjustments.' July is a month when jobs are automatically
added by the BLS to seasonally smooth the layoffs of auto workers during
July's retooling for the new model year. This year most of the retooling
did not occur, yet the annual seasonal adjustments did.
-
- "Adjustments are also made for supporting industries,
which are partially idled while auto production halts for retooling. More
phantom jobs were created by the 'Birth-Death Model.' The payroll jobs
data contains guesses about the numbers of new startup company hires and
jobs lost from business failures. Failed businesses don't report the lost
jobs (deaths), and new jobs from startups (births) are not captured in
the reporting. The government estimates these numbers, but the estimates
are based mainly on growth periods, not on recessionary times.
-
- "The employment outlook was further improved by
pushing another cadre of workers, who have been unemployed for too long,
off the unemployment rolls. Remember that the long-term discouraged (people
out of work for more than one year) are not counted as being in the work
force. The length of the current downturn means that short-term discouraged
workers, who are counted among the unemployed, are now moving into the
long-term discouraged category, which simply erases their existence and
lowers the measured rate of unemployment.
-
- "All sorts of distortions can find their way into
the official statistics. For example, industrial production estimates are
based on electricity consumption. Unusually hot weather, which causes a
jump in air conditioning use, appears in the statistics as an increase
in industrial output. Cool weather spells during summer reduces electricity
use and results in a phantom drop in industrial output. Nominal retail
sales figures can increase from an uptick in inflation. An increase in
real GDP can be the result of underestimating inflation. Other distortions
come from the year to year comparisons. As time passes, new comparisons
are no longer with previous peaks, but with more recent lows. Thus, reported
declines are less severe than previously, which makes things sound better
when they aren't. By spinning the financial news, the appearance of recovery
is created, and this lures people back into the stock and real estate markets
where they can lose the remainder of their wealth."
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- Andrew Gavin Marshall, writing for Global Research says,
"...The current crisis is not over. The parallels between the current
crisis and the Great Depression are frightening. This trend of building
speculative bubbles is reminiscent of the 1920s stock market speculation-driven
bubble; built by the Federal Reserve, which eased interest rates, provided
liquidity to the banks and actively encouraged speculation. Bubbles that
were created then burst.
-
- "In 1932, Congressman Louis T. McFadden stated before
the Congress that the Federal Reserve banks are not government agencies,
but 'are private credit monopolies which prey upon the people of the United
States for the benefit of themselves and their foreign customers; foreign
and domestic speculators and swindlers; and rich and predatory money lenders.'
Following the creation of the Fed in 1913, Congressman Charles A. Lindbergh
said, 'From now on, depressions will be scientifically created.' Indeed,
he was right. The current crisis, likely leading to a Great Depression,
is being used as the primary means through which a global government is
being constructed.
-
- "In 2007, UK Prime Minister Gordon Brown called
for a new world order in reforming the UN, World Bank, IMF and G7. When
the bank Bear Stearns collapsed, due to its heavy participation in the
mortgage securities market, the Federal Reserve purchased the bank for
JP Morgan Chase, whose CEO sits on the board of the New York Federal Reserve
Bank. Shortly after this action, a major financial firm released a report
saying that banks face a 'new world order' of 'consolidation and acquisitions....Out
of the ashes of the financial crisis, a new world order will emerge in
constructing a global government."
-
- It is no wonder that U.S. Treasury Secretary Timothy
Geithner asked Congress last Friday to increase the $12.1 trillion debt
limit on Friday, saying it is 'critically important.' In contradiction
to all the positive spin being proffered by Benanke and company, Mike Whitney
says that "No one is fooled by the fireworks on Wall Street [actually
some are]. Consumer confidence is still falling. Everyone knows things
are bad. Everyone knows the mainstream press is lying. The restaurants
and malls are empty, the homeless shelters are bulging, and even the big-box
stores have stopped hiring. The only 'green shoots' are on Wall Street
where everyone gets a handout from Uncle Sugar.
-
- "Bernanke has pulled out all the stops. He's lowered
interest rates to zero, backstopped the entire financial system with $13
trillion, propped up insolvent financial institutions and monetized $1
trillion in mortgage-backed securities and US sovereign debt. Nothing has
worked. Wages are falling, banks are cutting lines of credit, retirement
savings have been slashed in half, and home equity losses continue to mount.
Living standards can no longer be bandaged together with VISA or Diners
Club cards. Household spending has to fit within one's salary. That's why
retail, travel, home improvement, luxury items and hotels are all down
double-digits. The money has dried up."
-
- According to Bloomberg: "Borrowing by U.S. consumers
dropped in June for the fifth straight month as the unemployment rate rose,
getting loans remained difficult and households put off major purchases.
Consumer credit fell $10.3 billion, or 4.92 percent at an annual rate,
to $2.5 trillion, according to a Federal Reserve report released today
in Washington. Credit dropped by $5.38 billion in May, more than previously
estimated. The series of declines is the longest since 1991.
-
- "A jobless rate near the highest in 26 years, stagnant
wages and falling home values mean consumer spending... will take time
to recover even as the recession eases. Incomes fell the most in four years
in June as one-time transfer payments from the Obama administration's stimulus
plan dried up, and unemployment is forecast to exceed 10 percent next year
before retreating."
-
- "What a mess. The Fed has assumed near-dictatorial
powers to fight a monster of its own making, and achieved nothing. The
real economy is still dead in the water. Bernanke is not getting any traction
from his zero-percent interest rates. His monetization program (QE) is
just scaring off foreign creditors."
-
- On Friday, Marketwatch reported: "The Federal Reserve
will probably allow its $300 billion Treasury-buying program to end over
the next six weeks as signs of a housing recovery prompt the central bank
to unwind one of its most aggressive and unusual interventions into financial
markets, big bond dealers say." Right. Does anyone believe the housing
market is recovering? In the first 6 months of 2009, there have already
been 1.9 million foreclosures.
-
- Robert Chapman adds that, "The Fed's Wall Street
bubble, as we forecast in January, will need at least $2 trillion more
in 2010, if the economy is to just stay on an even keel. The massive debt
liquidation particularly in banking, Wall Street and in insurance demands
many more trillions of dollars. $23.4 trillion is not going to be enough.
Presently the Fed is in the process of monetizing $2 trillion in Treasuries,
Agency paper, such as Fannie Mae and Freddie Mac and collateralized debt
obligations held by lenders. It is a secret what the Fed is paying for
this almost worthless paper. Is it any wonder the public has lost trust
and confidence in these players and our government?"
-
- (End Excerpt)
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- World Affairs Brief - Commentary and Insights
on a Troubled World
-
- Copyright Joel Skousen. Partial quotations with attribution
permitted.
-
- Cite source as Joel Skousen's World Affairs Brief http://www.worldaffairsbrief.com
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