Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Thoughts On The Bernanke Re-Appointment

Politics / Central Banks Feb 03, 2010 - 01:43 AM GMT

By: Graham_Summers


Best Financial Markets Analysis ArticleThe US Congress decided to re-appoint Ben Bernanke as Fed Chairman of the US Federal Reserve. This decision is completely and utterly insane.

Please understand, I do not use the word “insane” for humorous purposes, but as a factual observation. For there is truly no other way to look at Congress’ decision.

For starters, it is clear that the US populace is fed up with the bailouts/ stimulus madness that has governed US monetary policy for the last two years. If Congress’ less than 25% approval rating wasn’t clear enough, voters put a Republican Senator in Ted Kennedy’s former Massachusetts seat (one of the bluest states in the US).

That alone should have woken Congress up to the fact that voters are furious about what’s going on. And yet… Congress (with the urging of President Obama who himself is sporting the lowest approval ratings of any President in history at this point in his term) decided to re-elect the chief architect of the bailout madness: Ben Bernanke, man who has overseen the largest wealth transfer in history, from taxpayers to Wall Street Oligarchs.

If that’s not crazy enough, remember that 2010 is an election year! So many of the folks who put Bernanke back in place are up for election in 10 months or so. I can’t wait to see how they spin their Bernanke vote as a move designated to help the ordinary American taxpayer.

Aside from the career risk associated with putting Bernanke back in charge, let’s consider the man’s qualifications for the job. Setting aside any personal opinions of the man, we know for a fact that he:

  1. Failed to see the financial crisis coming
  2. Proclaimed time and again that the issues were “contained”
  3. Has bought more than $1 trillion worth of the same garbage toxic assets that took down every investment bank (save the ones that received direct bailouts via the AIG bailouts: Goldman Sachs)
  4. Was in charge of a Federal Reserve that used taxpayer money to pay WAY over market values for said junk assets
  5. Has leveraged the Fed’s balance sheet to 42 to 1 ($2.2 trillion in liabilities on $52 billion in capital)
  6. Openly juices the market during options expiration week
  7. Has overseen policies that resulted in the Dollar losing 11% of its value since he took office (it was 20% before the financial Crisis created a surge in demand for greenbacks)
  8. Cannot account for billions in dollars that were handed out to various banks/ financial entities

You get the general idea. Imagine you had a dentist who failed to notice that your teeth were rotten. Then imagine that once your teeth were actually rotten to the core and causing pain he pulled the wrong teeth, charged you twice the industry rate for his services, and then called you back to say he lost your check (after cashing it) and needed another payment at an even higher price.

Would you continue seeing this guy for your dental work?

Me neither.

And yet, Congress decided to greenlight Bernanke’s re-appointment. Like I said, the decision is completely and utterly insane. And it doesn’t bode well for the future of the Dollar OR the US financial system. A lot of commentators get far too technical in their analysis of the US’s financial issues.

The simple facts are that we have a MASSIVE debt problem in this country and you cannot solve a debt problem by sweeping it from the private sector onto the US’s public balance sheet. Similarly, you cannot solve a debt problem by issuing more debt. And yet, Congress has re-elected a guy who thinks these are the best means of combating a debt problem. Even more incredibly, they re-elected him despite the fact he didn’t even see the debt problem coming.

Like I said, completely and utterly insane. Get ready for Quantitative Easing 2.0 and a whole slew of other insane monetary policies.

Good Investing!

Graham Summers

PS. I’ve put together a FREE Special Report detailing THREE investments that will explode when stocks start to collapse again. I call it Financial Crisis “Round Two” Survival Kit. These investments will not only help to protect your portfolio from the coming carnage, they’ll can also show you enormous profits.

Swing by to pick up a FREE copy today!

Graham Summers: Graham is Senior Market Strategist at OmniSans Research. He is co-editor of Gain, Pains, and Capital, OmniSans Research’s FREE daily e-letter covering the equity, commodity, currency, and real estate markets. 

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

    © 2010 Copyright Graham Summers - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

    Graham Summers Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in