Suddenly, the talk of the threat of deflation has coincidentally been put forward as a deep concern at the Fed. And the suggested remedy is, you guessed it, more quantitative easing. Ben has come to save us.
“It is something that we’re going to be watching very carefully,” Fed Chairman Ben Bernanke said in response to a question during a Q&A at forum sponsored by the Cleveland Fed.
“If inflation falls too low or inflation expectations fall too low, that would be something we have to respond to because we do not want deflation,” Bernanke said.
Like a corrupt dictator with ambitions of painting a perfect world for his nation, Bernanke has come to protect us from that lurking nemesis of state—deflation!
My, my, my … so soon after the FOMC meeting? Even after the markets were so hopeful of a Fed save, built up to a crescendo of excitement following the newsflash that a last-minute change in schedule, away from the normal 1-day FOMC meeting to an extended 2-day one was, instead, needed? Surely something big was afoot!
Bernanke surely needed that extra day to convince those three sticks-in-the-mud at the FOMC (as well as those disloyal Republicans so concerned about inflation) that inflation was less important than job growth, and that only he was destined to regain the glory of the 50-states by simultaneously averting a Wiemar style collapse of the dollar and a crushing Japanese-style lost double decade with his books in hand.
Well, Bernanke showed them all why he was destined to seize control of the hearts and minds of a fearful public plagued by a falling empire, didn’t he? He was so prescient when he said commodities prices were “temporarily elevated” by “transitory factors” and demonstrated single-handed why those three dissenters at the Fed are, in fact, enemies to the state.
It’s as if Bernanke was awarded divine understanding of what truly ails the great red, white and blue: it’s those evil speculators in the commodities pits who’ve got to be dealt with.
As in a 1933 Reichstag-like event, The Bernanke, as he is affectionately called, now, made sure commodities traders got their just due for their crimes—through a coordinated maneuver with its allies at the SNB to crush the Swiss franc at the precise moment the gold price was about to breakout to fresh all-time highs.
In an out-of-the-blue sale of a massive 4,000-gold futures position (naked short?) for December delivery which coincided with the SNB announcement, instead of the gold price soaring to $2,000, it was burned to the ground along with the franc.
And to permanently rid the state of those evil freegold speculators who misguidedly sought to flee the tyranny of theft, fear and persecution, The Bernanke led them to a train out of, they thought, the clutches of a dying fiat currency. Instead, the train whisked them to away to captivity and slaughter at the hands of a conniving ideologue.
The message is clear: the U.S. Treasury gets the carrot, gold gets the stick!
The salesman thanks the customer for patronizing his shop and asks him to come again. But the socialists say: Be grateful to Hitler, render thanks to Stalin; be nice and submissive, then the great man will be kind to you later too.
–Ludwig von Mises
And to top it off, injecting comic relief—in a gallows humor way—the Wall Street Journal publishes former vice chairman of the Fed, Alan Blinder (1994-96, another Princeton boy) piece (on the same day as Bernanke’s remarks in Cleveland) entitled, Ben Bernanke Deserves a Break.
The final outcome of the credit expansion is general impoverishment.
–Ludwig von Mises
Who needs a break?