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An Optimist, But Is He Crazy?

By Rick Ackerman Posted on January 6, 2012, 3:25 am EST Last Updated January 9, 2012, 2:47 pm EST

In the Rick’s Picks forum, Gary Leibowitz is a square peg in a round hole. A steadfast Obama supporter, his outlook for the economy is almost as annoying. He actually thinks we’ll muddle through 2012 without a global financial collapse and believes the U.S. economy is on the mend.  Here’s Gary in his own words, posting to the forum yesterday:  “As Obama is being bashed for his outrageous spending spree over these last three years, the economy is showing improvement across the board. The dollar has to do well in this scenario, which will place pressure on commodities. The corporate earnings picture is a bit more cloudy. Overseas exposure will certainly hurt the bottom line.” Crazy, right?   In the first place, where would economic growth even come from, given the shrunken state of America’s manufacturing sector and the death spiral globally of our former bailiwick, grotesquely leveraged financial “products”?  Factor in an apparently intractable deflation in the housing sector, and the best we could hope for in 2012 is to keep the Second Great Depression at bay for another year, right?

And yet, is it possible he could be right – that 2012 will end, just as 2011 did, with no world-shaking financial catastrophe to end these tolerably hard times?  In fairness to Gary, we should note that he is not all lollipops and roses. “I am not proclaiming all is well, or that we will come out of this unscathed,” he continued in his post. “I just don’t see the Armageddon everyone is expecting.  If we do hold off a recession this year, then the odds of a severe recession in 2013 increase greatly. Real estate and other ‘assets’ will most likely take it on the chin. Deflation pressures will mount. Can’t see many winners except cash.”

We’d have to concede that this sounds like the voice of moderation, even if it’s apostasy to the mostly gloomy bunch, including your editor, who post regularly in the Rick’s Picks forum. In any event, based on a purely technical reading of stock and commodity charts, we’d have to concede that a dull 2012, economically speaking, at least seems possible. We’re already on record as saying the euro looks like it will fall no lower than $1.08 at the outside, notwithstanding the fact that we expect Europe’s PIIGS to renege on most of their debts. With regard to the Dow Industrial Average, the technical evidence is as persuasive for new record highs as for a collapse below 10000. Could Gary be right? While we continue to doubt it, we’ll keep an open mind.

***

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  • Richard Polk Dudley January 9, 2012, 2:01 am

    Silver needs to be bought at 29.55 stop for conservative traders, and here at 28.84 for aggressive traders. Gold needs to be bought here at 1612 with a 1587 stop.
    Gold targets 1900 and silver target is 73.00
    April natural gas needs to be bought at 3.15 with a 5.88 objective.

  • Jill January 8, 2012, 8:38 pm

    Interesting point, Mario. And I always enjoy your information about how folks live in China. I probably will never go there, as I have big time problems with jet lag when I fly very far. But China is such a growing influence on the world, it’s fascinating to know about.

  • John Jay January 8, 2012, 12:56 am

    Tom,
    I agree about SS and Medicare. But as the government just prints more money and adds more debt to meet its obligations, the poor and powerless will be the first to suffer. Doctors are already going bankrupt trying to get paid by Uncle Sam. And the government will continue to play a cruel trick with the COLA. Food and energy are an outsized portion of the expenses of a person on a fixed income. So DC just does not count those in inflation. Even worse is the way they ignore the inflation accumulation over the years. Gasoline has gone from $1 to $4 in about ten years. But if the price falls back $.25, voila, deflation by the Feds reckoning.
    Even if it falls back to $3 a gallon it is still 3x what it was ten years ago. What I am stating is that as bad as it is for those not wired into the power structure, when it finally fails, it will get much worse for them. I figure I will get three or four years out of my SS before they go to means testing or it just has a USSR style pension devaluation. NDAA passed by a ten to one vote in the Senate means to me that they know what is coming. And they plan to come out on top no matter what the cost to you and I.

    • Mario cavolo January 8, 2012, 3:46 pm

      I’ve often pointed out thatbitbis so much easier and possible to be comfortably “poor” in Asia compared to the U.S. That is also why I have been saying that anyone who says they actually want a reset, that a collapse is what we need to start over, and such similar ideas, is nuts. With the U.S. having developed and advanced as far as it has economically and societally over the past 70 years, if the bottom does somehow fallout, it will be a psychological, socioeconomic horror story far worse than any previous in the annals of western history. Whereas in China/Asia, living frugal is nothing new if needed. Just the other day a friend remarked that if he passed away he knows his wife would live a simple frugal life, stretching money far beyond what a Westerner can even fathom.

      Cheers, Mario

  • Tom January 7, 2012, 8:13 pm

    John Jay,
    social security and medicare are not government largess or entitlement.most people have paid into both since they started working. The government borrowed the funds and replaced them with IOU’s. The media and some government officials are trying very hard to change perception of what these programs actually are how they are/were funded by referring to them as entitlements. Congressional health care and retirement are entitlements as the recipients do not contribute one dime to them, only the tax payers do.Food stamps and section 8 housing are entitlements also, but are part of our social contract.I don’t think paying for a congressman’s old age is what I want my tax dollars doing. Would rather help the needy poor and mentally challenged.

  • John Jay January 7, 2012, 5:45 pm

    I have another prediction. The mess we have now will look like the “Good Old Days” when the US empire Ponzi scheme finally collapses. I read more and more articles about seniors on SS and not much else who are barely making it, even with some food stamps and Medicare. I think the food stamp cut off for a single person is 10K a year of income. That is very poor indeed. I think there are 10,000 boomers a day hitting SS minimum of 62. With Zirp in place forever, they will be burning through any savings they have rapidly. If and when SS, Medicare, Food Stamps, Section 8 housing, and all the government largess evaporates or takes a big cut it will get very ugly.
    I am not rooting for or against what is coming because it would be like rooting for or against the onset of Winter or a Tusnami. I am simply a witness and observer of the powerful forces at work here.

  • C.C. January 7, 2012, 5:34 am

    I’ve been wondering why central banks and nations outside the center-of-the-Universe (That would be U.S.), keep accumulating this overpriced commodity called gold?

    Those crazy fools.

    Personally, I’ll take the fat side of the competitive devaluation trade. 90 handles on the DXY for any protracted period of time mean not good times for U.S. economy and the de-facto proxy for M.O.P.E., the DJIA/S&P.

  • bc January 7, 2012, 12:23 am

    Why is it that when ever the government engages in price controls, some expert asserts that, “This time is different”, and then explain how this time price controls won’t fail, won’t distort behavior, actually make sense, etc. We are living right now with money price controls aka ZIRP. Assuming rates stay low permanently through 2013 we might indeed have a boom. The question then becomes: How long can ZIRP from the Fed last? Given that banks can’t make any profit under ZIRP, voting retirees on fixed incomes numbering in the millions are getting screwed under ZIRP, draconian capital controls will be required to block any carry trade under ZIRP, and Europe is coming apart with or without ZIRP, my guess is not much longer. But, I could be wrong.

  • ken horn January 6, 2012, 10:41 pm

    Gary, my remarks were directed at the Obama admin because he is such a stark example of a big spending, bloated gov’t & entitlement advocate. The more important point, if one is objective, is to analyze “big gov’t”. Now that the general public has gotten a glimpse of what these self-serving, pandering pols do with our $$$$, (crony-capitalism, vote buying, insider info, their own retirement plan, their own healthcare-you get the picture) then libs & conservs should BOTH want their money kept out of their hands. The entitlements are unsustainable, but are used as vote-getters, so it’s always left to the next admin. There should be a big neon sign in everyone’s head saying “don’t give these guys another penny” They ALWAYS want/need more. I know those compassionate pleas to the heartstrings move you, but don’t think for one minute those $$$ will go where you think. (also, have you noticed the big spenders in Congress are very tight with their own money). I could go on & on with the parade of “usual suspects” being nabbed for corruption & payback, but space is limited……

  • Jill January 6, 2012, 10:27 pm

    One reason why you may be right, Gary, is that, if Eurpe implodes, then the U.S. may be perceived as a safe haven– just as the U.S. dollar apparently already is, as Rick mentioned in his post above about the DXY.

    • Jill January 6, 2012, 10:27 pm

      U.S. stocks I meant.

  • Tom January 6, 2012, 9:29 pm

    DO it appears that gold isn’t listening to you.Maybe you’d be better off talking nice to it so it might mind you. Of course we still have a long way to go in 2012.

  • Divergent Opinion January 6, 2012, 4:44 pm

    leibowitz, your ‘muddle through 2012′ pseudo-bullish essay is terribly ill-timed today, because all markets (except cash) are about to bigtime crash.

    yet, it is predictable that you wrote this now, as there is so MUCH bullish sentiment in the air at present, that all you have done is to add yourself, as one more bull in the current bull MEGA large corral.

    but here’s my bear hand, so read ’em an’ weep:

    the AAII sentiment survey ending on 1/4/12, came out yesterday, and it reads an INCREDIBLE 49% bulls, 34%neutral, and ONLY 17% bears (as comparative reference, the longterm avg. for bulls is 39%, and for bears, 30%).

    This kind of bull/bear divergence in the AAII of 32 points is so EXTREME, that even I have never seen it before (49-17=32); and be assured, it has ALWAYS historically indicated that a MAJOR top turnAROUND is VERY close by, and often times within only days (as additional comparative reference, a 20 point divergence, is usually enough to indicate a large market turnaround is soon to take place, for example, 45%bulls-25%bears=20). So a 32 point differential is so amazing, we are talking about a VERY MAJOR top is already here, right NOW.

    That said, there could be one last stab upward over next few days, for the very last sucker to get on board, the hell train down. One last stab up is still possible, to try to once again penetrate the necklike of the massive head and shoulders formation, of 2011. But the second failure to break the neckline (along with ‘some terrible debt default news out of nowhere’), will cause panic selling.

    • Rick Ackerman January 6, 2012, 5:41 pm

      Thumbs up for the new, kinder and gentler D.O. — and thanks for the interesting and informative post, a clear call that leaves no doubt concerning where you stand.

    • Robert January 6, 2012, 6:51 pm

      Armageddon is always no more than a couple days away… Been that way since John the Baptist.

      Good thing I’ve still got that pallet of greenbacks that I “found” in the cargo hold of a C130 in Irag 5 years ago…

    • gary leibowitz January 6, 2012, 7:40 pm

      Agree we are over-bought. Agree sentiment is high.
      Agree we see a correction in a week or so.

      Don’t see a sharp drop like you are expecting, nor the start of a protracted bear.

      If earnings and future expectations rattle wall streets backed in assumptions then we can have a dramatic drop. Until that happens I expect we go thru this year with an upward bias.

    • D.O. January 6, 2012, 8:29 pm

      I will go further, on evidence, on an ALL markets crash, coming soon.

      The usa dollar index chart.

      There is a major upward explosion apparently coming very soon in the usa dollar index, as it is VERY near its major breakout area of 81.5 approx. (it is now approx. at 80.9). In a matter of just a few days, it can explode up, nearly 10%.

      Why will this occur? Trillions of electronic usa dollars, in usa dollar ‘carry trade,’ HAVE to be returned to their righful owners. And this 81.5 dollar index area, has already been established, for last 3 years, as THE ‘breakout’ point (either up or down), of the usa dollar trading range; and the END of zero-interest usa dollar borrowing, in order to exchange and hold for other interest-bearing world currencies, as it is no longer ‘slamdunk’ profitable—and it actually becomes RISKY.

      Last time usa dollar broke out from this 81 index area, was May 2010, and usa dollar shot up immediately from 81 to 88, in only days.

      Concurrently, the spx fell 75 points, in only 3 days—and continued falling raggedly for 2 months, from May at 1200, to July at 1000. (And this spx sudden fall is because the BIG players must get their trillions in sudden dollar covering losses from somewhere, and it won’t come from usa t-bills or bonds, it will come from their HIGHLY OVERpriced equities profits, and their HIGHLY OVERpriced gold and silver profits).

      here’s the dollar chart, poised like a coiled snake ready to breakout: http://www.fxstreet.com/rates-charts/usdollar-index/?version=1
      (you have to click on the upper top corner, to change the default daily chart, to the WEEKLY chart, to see what I mean, in 3 years of usa dollar index action).
      (btw, you will also note there that the usa dollar is flying way above its 200dma, first time since early 2010, similarly to when it broke UP, POWERfully).

      &&&&&&
      Note from RA:

      This resonates with my most recent forecast for the Dollar Index. It was accessible only to paying subscribers, but I’ll repost it here because it’s relevant to the discussion:

      DXY – NYBOT Dollar Index (Last:80.23)
      January 5, 2012 9:25 am GMT

      NYBOT Dollar Index (DXY): A relatively docile dollar has allowed a broad swath of investables to meander for the last three weeks, but that could change if the Dollar Index pops above a key high at 81.44 recorded about 13 months ago. DXY has been marking time since mid-December, but the relatively shallow pullbacks during that time suggest that it is in consolidation rather than distribution. Moreover, a subtle sign that the implied thrust could happen soon can be seen in the bullishness of the hourly chart (see inset). Yesterday’s surge stalled precisely at the 80.33 midpoint resistance of the larger pattern, but if that number is exceeded today, dollar bears had better prepare to take flight, since the ‘D’ target to which it corresponds is 81.13. Exactly what a flight to the supposed safety of the dollar implies for the geopolitical world is impossible to say, but it is foreseeable nonetheless that the news will not be felicitous.

    • D.O. January 6, 2012, 8:44 pm

      robert, you should have stayed there in ‘irag’, since you fit right in there, with your fixed blinders zealotry, about your ‘goldismoneynomatterwhat’ cementhead mentality.

      Gold is NOT money. It is simply and EXTREMELY OVERpriced commodity, at present, in this fiat world.

      I’ll let you know when gold is money again. When it is finally PEGGED, FIXED, to a currency—any currency. It will take a few years though, after almost all of the world debt is washed away, unpaid. And that’s a lot of debt washing.

      Ergo, IF and WHEN gold is ever pegged again to the usa dollar, it will be cosiderably UNDER $250 and ounce. And that’s for sure. It’s called massive world DEflation.

    • D.O. January 7, 2012, 12:55 am

      Excerpt of what RA stated below—
      “…Exactly what a flight to the supposed safety of the dollar implies for the geopolitical world is IMPOSSIBLE to say…” (CAPS mine).

      ????
      Are you joking???
      You know, I often wonder, whether you are a shill ‘insider’, or not.
      And you KNOW exactly what I mean. “Impossible to say”, you say?
      Come on. IT IS OBVIOUS, EXACTLY, what IT means.

      And you KNOW IT, too. And I am CERTAIN, of that.
      But as to WHY you LIE, I still don’t know. For sure.

      &&&&&&

      Just when I thought you were mellowing you revert to type, slandering your host. If you even slightly annoy me again — which I know you will — I’m going to ban you from this forum. And when I do, it’s possible to predict — with CERTAINTY (caps mine) — that no one will miss you. RA

    • ful_karboy January 7, 2012, 3:14 am

      To D.O.

      “Ergo, IF and WHEN gold is ever pegged again to the usa dollar, it will be cosiderably UNDER $250 and ounce. And that’s for sure.”

      Only in the fevered swampy recesses of your cranium, LOL! I’d buy any gold you have right now for $275 so you’d beat the rush ;>) But, my guess is that you don’t have any… Sour grapes after missing one bull market for the record books? ;>)

      “It’s called massive world DEflation.”

      Ah! But since the supply of printed fiat currency has gone way beyond the supply of actual “stuff” one would have to assume that there’d be a hiatus in the printing presses while “stuff” continues to be churned out AT EVER LOWER PRICES. Not too likely. Even Leibowitz Libs wouldn’t run businesses like that for long, although once in Gov they try to spend much more than they can take in…

      I could see gold at 250 New Dollars {Or Amerints or whatever} AFTER say a 1000 for 1 swap of Old for New, hee hee hee.

      Gas prices in Jan 2009? Maybe 1.80
      http://gasbuddy.com/gb_retail_price_chart.aspx
      Gold price in Jan 09? $800+
      Treasury Debt Jan 09? 10.6 trillion
      http://www.treasurydirect.gov/govt/reports/pd/mspd/2009/opds012009.prn

      Comrade Barry has been quite the inflationist, while ducking any responsibility for his actions as a “community activist” suing Citi to force lending to those with dubious credit…in the middle of a Fed-enabled housing bubble. {Aid by all sorts of Gov agencies and programs from HUD quotas to lenient tax rates on flipping houses}

      When/If things crash, I bet gold does just fine since it HAS such a long track record and is valued around the world. {Think internationally and act locally ;>)

    • Cam Fitzgerald January 7, 2012, 5:20 am

      That was a terrific (and worrisome) post D.O.
      Mid-week the Euro dropped below last Januaries lows and suggested my own hypothesis of a Euro-dollar inversion had been invalidated. The rally was being killed by the sentiments expressed in currency markets.

      “There is hope yet”, I encouraged myself. So I waited for the dollar to answer. Tonight it does look as though it will rise above resistance and so the worry will linger over the weekend that Monday will not bring a positive outcome for markets.

      Quite to the contrary. It now looks as though the dollar will power up further yet. Damn! As Rick suggested, we really have no idea what political or economic event might coincide with this but it will not be “felicitous”.

      Whatever it is will likely come within hours not days.

      I have to admit that I too was alarmed by the most recent AAII readings. I had time to put up some shorts Thursday when I saw the most recent report but held my fire.

      A big mistake? Lets hope not. Until I see Mondays numbers though I won’t take any action but if the dollar soars then I will agree with you D.O.

      The shit is going to really hit the fan this time.

  • ken horn January 6, 2012, 4:42 pm

    Although I’m sure that Gary is a bright, articulate guy, I find it difficult to take him (or anyone) seriously who buys into the Obama illusions. Remember that Obama’s inner circle & team of czars are committed socialists & his entire economy team (except Geithner) has “left the building”. Big gov’t, out of control liberalism does not & never has worked. With a $15+ T debt & $1.5 T deficit, we’re heading over the cliff. If I need to prove my point, just look at Europe. It’s not if the brick wall is hit, it’s when. Back to the original point – the market can be very irrational in the short run, over time it will follow corporate earnings. We now have an admin that is the most anti-business since J. Carter. Things may change after 11/12 (more perception than reality), but it will be a long, difficult slog. “I could be wrong, but I doubt it” – Charles Barkley

    • gary leibowitz January 6, 2012, 7:35 pm

      If we do go into a depression what happens to your socialist programs? Correct me if i am wrong, but didn’t all these social programs sprout up because of the depression?

      Do you really think business friendly programs will be instituted while unemployment reaches over 25 percent? While the rich reaped 300 percent profits during the past decade?

      The last decade of unprecedented corporate profits was not exactly becuase we had an unfriendly business policy.

  • gary leibowitz January 6, 2012, 4:33 pm

    In truth I have been very bearish for a very long time. The unwinding of excess spending, uncollectable debt, and a changing socialist culture will produce upheaval.

    I have tempered my economic outlook based on the simple notion that money still has to find a home. There will always be competition for that money. I don’t believe most investments will dry up and a horde of cash will result. I believe Mark Faber, of the GloomBoomDoom site stated the same thing.

    I am also pragmatic about where blame should be placed. I stated 3 years ago that whomever is elected will inherit most of the blame and that no single person or country could reverse the natural outcome. The idea that a conservative Republican would somehow avert this global mess is a naive suggestion. I do not blame nor praise Obama for his actions. The last few months of Bush’s term made the notion of a 2 party system indistinguishable. During crisis “all” Presidents will react the same. It’s called self-preservation. Perhaps Ron Paul is a true maverick, but I believe even he would follow the same course.

    With what appears to be the start of an economic upturn, after 3 years of living in a quagmire, I do not think it has staying power. Will it last another 12 months? Who knows. I just don’t think the stock market will react as badly as perhaps the middle class’s personal outcome. In the last 3 years we had a major hit on the higher paid workers in the age category of 50 and above; that personal tragedy was not reflected in the resilient stock market. Social pain does not correlate to stock market performance.

  • Avocado January 6, 2012, 2:46 pm

    Anybody follow Harry S. Dent? He focuses on demographics, otherwise known as “people”, or consumers as everyone else sees them. I hear all about our consumption economy, which was based on exploding debt.

    Doesn’t look to me like that is happening anymore: http://www.economagic.com/em-cgi/charter.exe/frbz1/fl154104005+1980+2012+0+0+0+290+545++0

    Harry’s argument is that baby boomers start the downsizing process in earnest this year, and it grows and grows for the next 10 years. Every year more and more boomers retire and start drawing down assets. Yes, a lot of them have already done this because of the housing meltdown, but there are still millions of others who were relatively unaffected by the real estate crash. After all, if you own the house outright, who cases if the price falls? They may not realize as much on the sale for a move into retirement, but at least they won’t lose money.

    So where does the demand come from for China’s exports if we are in shrink mode? Europe is a basket case with the exception of Germany. Couple that with the very depressed state of social mood and I just don’t see any real hope for a bustling economy for a long time to come.

    Then add to the mix the $42 trillion of private debt, most of which won’t get repaid.

    How does an economy grow with all of these barriers in front of it?

    I would like someone to explain this, including people in the equation. Almost nobody talks about people on the CNBC shows or online. Its all economic theory based on what the government does. What if government is no longer in control, if it ever was?

    Andy

    &&&&

    Dent focuses mostly on publicity-seeking, as far as I can tell, Andy. Meanwhile, our own Doug Behnfield has written more cogently and persuasively on the subject of demographics, and his outlook — persuasively argued, in my estimation — is not nearly so rosy as Dent’s. Doug sees almost no demand for the McMansions that millions of retiring Baby Boomers will be eager — nay, desperate — to sell. Still worse is that even if there were any interest from younger buyers, they could never get financing.

    To say, as you do, that sellers “may not realize as much on the sale” is to dismiss the cause of the washout collapse that looms for home prices. My own prediction, made more than a decade ago, was that home prices would decline 70% in the throes of a global asset deflation. I’ve recently raised that number to 80% based on the absurdly high prices that we are still seeing for crummy little ranchers and cottages in California and elsewhere. RA

    • Mario cavolo January 6, 2012, 5:16 pm

      Spot on avocado, while we may not have Rick,s Armageddon, we are most certainly not moving into a decade of delightful growth and expansion in the annals of history…cheers, mario

  • Brian January 6, 2012, 7:07 am

    Could Armageddon happen this year. Yes, things can get out of control real fast. But, I also bear in mind that Obama can print more money than you can shake a stick at.

    For a while, tons and tons of paper can fix a lot. But only for a while. The day of reckoning will come one day. Make no mistake about that.

  • mario cavolo January 6, 2012, 5:50 am

    Well Rick, we might easily slide me in to your comments as optimist #2 so I’ll go along with Gary that:

    1) Skip the financial armageddon scenarios. Not a chance it will happen.

    2) 2012 will “appear” dull. However, the pressure and rumblings deep inside the financial volcano will continue to build. Then let’s take a moment to ask “where and how could any pressure release valves be effective? The first answer of course is inflation / decline of currency purchasing power and you can bet that is exactly what will continue happening across the globe no different than the past 50 + years.

    3) Remember that the more currency they print, then the less as a percentage of total dollars in circulation!!! How’s that for sick and twisted? If there was 4 trillion total and helicopter Ben printed another trillion, that’s a big 25% increase. But we’re up to 15-20 trillion, right? So then what’s another trillion? Good grief.

    4) I am directly telling everyone that the slowing is definitely appearing here in the marketplace in China. Make no mistake that is true. I have multiple clients reporting revenue flattening, growth coming to a halt, with the typical budget tightening in response, etc. In addition, today’s headlines that trade surplus narrowed by 15% and China expecting severe crimp on exports for 2012. Real estate price pressure is finally downward but any and all talk of a real estate “crash” is hyperbolic, rhetorical nonsense.

    5) Do NOT underestimate the ability and means of Beijing to ease the past 2 years of tightening decisions. They have a diverse set of easing levers and policy decisions at their disposal. We could easily see another Taiwan type bubble and so consider when to start accumulating positions in the China/HK markets which have declined the past six months to more reasonable levels.

    No matter what other observations and analysis any of us put forth, one thing that is becoming clearer and clearer is that when a downturn does hit, regardless of the triggers, it will be a global sized downturn leaving no region of the world unscathed. All the while, those who absconded away with the wealth will be sitting pretty.

    Cheers, Mario

  • Benjamin January 6, 2012, 5:08 am

    To say we’ll muddle through with this financial and monetary system is like saying pi has a final digit.

  • John Jay January 6, 2012, 4:15 am

    Don’t forget, 2012 is an election year. Ben B will do whatever it takes to maintain the illusion of a functioning economy. Unless the Iran situation spins out of control like WWI in 1914 I think they can give the can more kicks down the road. 2013 is more likely to be big trouble. One more year to feather your nest if we are lucky.

    • Robert January 6, 2012, 6:39 pm

      JJ-

      I hear that meme a whole lot: “Ben Bernanke will take whatever action is necessary until after the election”

      But, the election is absolutely irrelevant to the direction the Fed must take, IMHO.

      Let’s examine a few realities for a moment:

      1) Ben Bernanke is a registered Republican
      2) Ben Bernanke is beholden to the same powerful global bankers that most other Republicans (and Democrats) in power are beholden to.
      3) In political circles, the Fed is under heavy fire from everyone except the Democrats (bar Grayson in Florida), and anyone with the last name of Bush or Rockefeller.

      The rationalities are easy to fathom:

      If the small faction of Fed loving Repubs win, then Bernanke is a lock to keep his job.

      However, regardless of who is actually elected, Bernanke also knows that a personal failure to support Obama and the Dems means that the Fed will most certainly be subject to increasing political scrutiny regarding its future.

      Likewise, the Dems MUST keep the Fed intact, or else their 1.5T per year credit card funded shopping spree will come to a screeching halt; and Bernanke knows that he must cow-tow to the Dems or else he will get yanked and Obama will pass the reigns straight to uber-dovish, print until the walls come crumbling down Janet Yellen.

      So, the Fed has NO option left but to cater to the Democrats. I’ll leave to you to deduce whether that means the printing presses are turned off for good, or not…

      The Republicans are slowly being consumed by the myriad of grassroots convervative movements out there, and these groups all hate the Fed…

      The Dems are the ONLY political party left that the globalists still have complete control over (aided and abetted by their complete dominance over the leftist mainstream media).

      Now, Consider that the ONLY point in common between the (moderately Right favoring) Tea Party movement and the (heavily Left favoring) #OWS is that they both hate the Fed and want it shut down.

      So, if the Fed is to survive, then the Globalists have to maintain control over the Media (which is a lock), and they have to maintain their influence over the Fed (another lock), AND they have to maintain political control over the Democrats in Washington; and they have to keep concentrating that power and they have to continue accelerating their globalist agenda…

      If the globalists fail to keep control over the Dems, then the consequence will be losing control over the future of the Fed, via the risk of having the grassroots turn on them in leftist circles; and the #OWS movement is already a harbinger of that momentum, which is why the globalists are so scared.

      You see, reality is what it is, and lies can never withstand the scrutiny of truth, nor can they ever claim economic victory over truth, due to the simple fact that lies are infinitly more expensive to maintain than truth…

      So- Bernanke may be a registered Republican, but he knows his only future lies with the Democrats…
      Commence printing in 5, 4, 3….

    • Samuel January 15, 2012, 11:33 pm

      Robert said: “(bar Grayson in Florida)”

      Welcome to 2011, Robert. Yes, 2011. Grayson lost in 2010.


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