Bank of Bernanke: When All Else Fails, Print Money

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Bank of Bernanke: When All Else Fails, Print Money

The job is so top secret, that the Fed Chairman never gives interviews... Except when we are in the worst financial crisis in history and the populace has no trust in you. Then you go on 60 Minutes and talk about how much you care about Main Street.


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Comments [13]

Idiot's picture

Bernanke is far more powerful

Bernanke is far more powerful than the President. Obama is a pawn of international bankers. The Federal Reserve is unconstitutional. It literally gives the government authority to create paper money out of thin air.

If people read the constitution, they would realize that it does not mention any kind of central bank. They would see that it's Congress that has authority to coin money, and believe it or not, only gold and silver should be legal tender. The idea that the government has the power to say that a piece of paper is money is madness. The top of our dollar used to say, "SILVER CERTIFICATE." It now says "FEDERAL RESERVE NOTE." This was gradually phased in over the course of about 60 years, culminating in the early 70s.

CA_Medicine_Woman's picture

Absolutely no one. The more

Absolutely no one.

The more I look at the Fed, the more concerned I get. The picture forming in my mind is a Congress Chartered, privately operated and controlled, legalized pyramid scheme.

Fastgurrrl's picture

Yo Mysticsmb, *hug*. :) Of

Yo Mysticsmb, *hug*. Smile

Of course, you are correct it's POSSIBLE some good can come out of ANYTHING, darling.

mysticsmb's picture

Hey FG, I didn't mean

Hey FG, I didn't mean anything by the 'actually watch' phrase--sorry if that came across as accusatory. What I meant was you didn't reference anything BB said with respect to AIG, which I thought was kind of important in light of your quote from Frank.

Again, I share some of your skepticism about the Fed and the vast powers assigned to the Chairman and would like to see reforms instituted in the future, but as of right now Bernanke's job description is what it is. Is he just 'placating' the masses by trying to increase transparency? Maybe. But that doesn't necessarily mean some good can't come out of it as more people learn about the Fed and its role and can begin asking questions themselves.

I also appreciate that Bernanke is well-schooled in the history of the Great Depression...and that he's NOT Alan 'Derivatives' Greenspan.

Fastgurrrl's picture

He and "the Fed" do not

He and "the Fed" do not answer to the President or Congress.

WHO DO THEY ANSWER TO?

LongBeachDogLover's picture

Right on

Right on Fastgurrrl......

Fuck Bernanke. He has too much power.

Fastgurrrl's picture

Good morning,

Good morning, Mysticsmb.

"did you actually watch or read Bernanke’s interview?" Yes, I watched the above video, ummm, thanks for asking.

When asked that since "the Fed" is supposed to monitor all these banks, then how did this happen, he said they, "the Fed," could have done a better job. Oh, ok.

"The Fed" is one of the least transparent, which he admits. I think they realize more and more people are waking up and QUESTIONING what is/has been going on and are tired of everything getting dumped on the backs of "main street." This is why he "opened up" for this interview, in other words, trying to placate whoever IS paying attention, especially to "the Fed" now.

"The Fed pays for itself and returns enormous profit to the Treasury." Hmmm.

"This isn't tax money that is being used." Hmmm.

I've got a lot of hmmms, about a lot of stuff. A fox in charge of the hen house decides to talk to me/the American people a little, hmmm. Makes me feel not one iota better, and changes nothing whatsoever about my view of "the Fed."

Robin Rigby's picture

Well, since I work for an

Well, since I work for an insurance company and AIG is an insurance company I can tell you a thing or two I've learned about insurance failures. When one insurer goes belly up, dozens of others follow. The reason? People have to go searching for a new carrier. Unfortunately, it costs a lot of money to insure a new customer (a new auto policy doesn't make a profit for the insurer for a year). So... If all the other insurers suddenly have to write new policies for all the people left out in the cold by the failure of another company their profits for that year suddenly go down the tubes.

That's a problem because the various Departments of Insurance in the various states require insurers to maintain a certain level of financial strength and liquidity. Add to that that AIG was insuring some of these toxic debts and that lacking this insurance could cause financial problems with the banks that used them (I don't know about this aspect of it, just speculating). Well, it's a mess.

Luckily for my employer we are one of the most financially stable insurers in the US and the new business we've gained from people jumping the AIG ship actually helped our 2008 numbers.

You know, the federal government has refused (several times) to regulate insurance. They leave that up to the states. Wonder if that's such a smart idea if it leads to this sort of thing.

Lezbeth's picture

What was the fed's role in

What was the fed's role in this crisis? Greenspan was a huge contributor. By keeping interest rates low, he drove investors away from US Treasuries and sent them looking for higher returns. Mortgages and mortgage backed securities offering 5-7% had much better returns than a piddly 1.75% (a typical interest rate Greenspan established). With all that foreign investment money pouring in, the investment banks pushed mortgages like 5 cent lemonade. Little independent lending firms popped up everywhere, arranging loans and immediately selling them off to investors clamoring for a way to make money. What really drove this crisis? MIT geeks coming up with investment vehicles (mortgage derivatives) that fell outside regulatory requirements. Greed...greed...greed.

Truth is, the fed, the banks, the best economists in the world cannot come close to estimating how much money went into that hole. When BB talks about "toxic assets," he is talking about trillions in securities traded with absolutely no hard assets behind them. When he says the banks borrow on collateral, I say p'shaw! The banks don't have collateral--that's the problem. This interview, as sincere as it sounded, was more flim-flam. There's a strong attempt here to get people to "buy in" to the idea of recovery. I'm holding on to my wallet.

mysticsmb's picture

Fastgurrrl, did you actually

Fastgurrrl, did you actually watch or read Bernanke's interview? I understand your skepticism regarding the FR itself, but I'm not sure it's fair to blame Bernanke for AIG's shameless greed:

"Let me just first say that of all the events and all of the things we've done in the last 18 months, the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG. Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, we had a situation where the failure of that company would have brought down the financial system," Bernanke said.

"You say it makes you angry?" Pelley asked.

"It makes me angry. I slammed the phone more than a few times on discussing AIG. I understand why the American people are angry. It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but the stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy," Bernanke explained.

...In other words, Bernanke thinks government should stabilize failed financial companies and take them apart slowly. "So, for example, in the case of AIG, we've prevented a bankruptcy, because of the chaos that would create. But we're also demanding that AIG divest itself, sell off its subsidiaries, and use the proceeds to pay back the government," he said.

Fastgurrrl's picture

I posted this earlier on my

I posted this earlier on my facebook. I will say again, the "Federal Reserve" is a complete RACKET that has been hoisted upon our backs:

Obama will try to block executive bonuses at AIG:
http://news.yahoo.com/s/ap/20090316/ap_on_go_pr_wh/aig_outrage

"Frank noted that the Federal Reserve Board, using a Depression-era statute, was the institution that gave AIG its initial government bailout, before Congress passed legislation providing for additional assistance and said that not enough safeguards were built into the deal."

FU BERNANKE

Jimbo's picture

The Fed IS the problem. It

The Fed IS the problem. It was just one short year back when Fed Chair Bernanke testified - that's right testified, that the underlying economy was in good shape. I feel the doors of hell opening to swallow him up.

If we want to restore confidience in all market finance, we need to restore the credibility of the Fed. Get someone who can tell the truth. Is that so hard?

Amen.

Erin Blackwell's picture

second sentence: "worst" and

second sentence: "worst" and "populace"