In case you missed it, Alan Greenspan just set a new world record for hypocrisy stating that the Fed's stimulus has had little impact on the US economy.
As a brief reminder, it was Alan Greenspan who created both the Tech and the Housing bubbles by maintaining loose money policies. It was also Greenspan who helped Wall Street to dismantle regulation related derivatives, leverage, and more.
Put another way... pretty much every single problem with the financial system today was created or at least greatly aided by Alan Greespan and his policies. And if you think Greenspan was just an ignorant dupe, you should consider that as early as 1999 he stated in private that derivatives could "implode" the market.
So to see Greenspan now criticizing Bernanke's moves is beyond astounding. Don't get me wrong, I'm not in any way defending Bernanke. I'm just saying that it's odd to see Greenspan criticizing someone who did the EXACT same things Greenspan himself did.
Regardless, Greenspan's statements (he also said Greece will default) tell us quite a few things about the Fed:
1) The Fed is a political entity and as such politics, not economics or finance determine its decisions
2) The Fed is aware that it is incompetent but is beholden to the Wall Street banks
Regarding #1, Greenspan's sudden move to start stating the obvious, after years of presenting rambling nonsense defending Wall Street, reveals in plain terms that those who run the Fed are essentially political lackeys who operate on behalf of Wall Street. They are not regulators, nor are they actual policy makers. They are politicians who act as front men for the big banks, presenting a friendly face for Wall Street's rampant greed and corruption.
Which brings us to point #2, for Greenspan to note that the Fed's actions have accomplished next to nothing makes it clear, beyond any doubt, that those at the Fed are aware that their policies are futile. Bernanke himself has even hinted at this in a recent press conference in which he stated that the Fed didn't understand why the economy wasn't improving.
The take home point with all of this is that the Fed is in fact powerless to address, let alone fix, the Financial Crisis that began in 2007. Indeed, the Fed's key role in creating it was to let Wall Street dictate the Fed's moves. And now that the Fed is supposed to solve the Financial Crisis, we're finding out not only do they have no clue how to do it, but they're even aware of this fact.
The trouble with financial forecasting for Europe is that the biggest decisions are always made in the political arena, NOT economically. Case in point, Greece, which is obviously bankrupt, voted for another round of bailouts despite the fact the first round was a disaster (won't be paid back) and the Greece economy is in ruins.
From a purely economic standpoint, it'd made a heck of a lot more sense to kick Greece out of the Eurozone (why should Germans be shouldered with Greek liabilities?). No businessman with a clue would want to support another Greek bailout. However, politics, not business rules in Europe politicians are both clueless and insanely corrupt.
This is why the Euro has held up and even rallied despite the fact the Eurozone is beyond doomed. Does anyone really believe the Euro is going to even exist in its current form a year from now? We've had two Greek bailouts and now Portugal is lining up for a bailout too. And what's going to stop Spain and Italy from doing the same?
Finally... how on earth is a strong Euro good for the European economy? Why defend it? Why not let it collapse to benefit European exports? Again, politics.
This is why I'm ultra bearish on the Euro and the Eurozone. Sure, the US has horrible deficits, debt loads, and politicians. But the idiocy that occurs on this side of the pond is NOTHING compared to what happens in Europe. In the US, people at least want to be a part of the US (you don't see New Yorkers wanting out of the union because California is bankrupt).
Europe on the other hand is a bunch of countries, who don't even speak the same languages, have a long history of wars amongst each other, and who really don't even like each other, joined together under a single union which most European voters now don't even want to be a part of.
After all, Greece was bailed out in May of last year. It's since requested an extension on paying back its bailout funds... AND asked for a second bailout... in 12 months. Spain also just tried to raise 3 billion in Euros to restructure its banks and only managed to raise a little over half of this... at spreads 10 TIMES when investors demanded the last time. Italian banks have fallen 27% so far this year on debt problems... and on and on.
Indeed, the Euro is setting up for a BIG move in the near future. The currency has formed a triangle pattern. These patterns can break out either to way, but given the problems Europe faces today, it will likely be downward.
Comment:
Comrades, if any of you have savings accounts, I'd get myself a safety deposit box if I were you. Back when the Great Depression hit in 1929, banks closed up to keep people from withdrawing their money. Then again, seeing as how our money will be worth next to nothing, maybe it doesn't matter. But still, something being worth next to nothing is still better than it being worth nothing! Hell, forget the safety deposit box, just stuff it in your mattress!
Seriously, it's quite obvious that this whole economic disaster has been engineered. But why? Just to make the rich richer? That is part of it, I'm sure. But there may be more to it than that.
Last year I read a story about how the United States government wanted to start a new currency that would become the currency of the entire North American continent. It would be our new money, as well as Mexico's and Canada's. It was supposed to be called the "Amero". They story even included supposedly leaked pictures of several of the proposed denominations of the Amero. It was supposed to happen in one or two years.
I didn't place much stock in the story. I figured it was probably a lot of hooey. A good imagination, a nice graphics program, and photobucket were all one would need to pull off a story like that. But the way things have been going, I'm beginning to wonder. And the timing fits too.
We may have an answer to that and soon. August is the default deadline. I'm sure they'll figure a way to postpone it again. But the more they put off the inevitable, the worse the collapse will be when it comes. When it comes, when the dollar collapses as we know it will, if a new currency takes it's place, one that becomes the currency of Mexico and Canada, no matter what they call it, then we'll know for sure and without a doubt that this economic disintegration we're suffering from was engineered, not just to make a profit for the wealthy, but to create a new currency that will increase their stranglehold on us even more. We'll know soon enough.
Dan 88!
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