Bernanke Is Blind As A Bat

By, Chris Rossini
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Following the stock market crash of 1929, there was a short period of calm before the government and Fed would deliver a Great Depression.

During that short period of calm, the establishment and authorities did their best to assure everyone that things were ok. I don't doubt that they even believed what they were saying.

Here are some examples of what was said during the calm period.

1929
In Nov., Hoover said that, “any lack of confidence in the economic future of American enterprises is foolish.”

Nov. 22 - AFL President, William Green said, “All the factors which make for a quick and speedy industrial and economic recovery are present and evident. The Federal Reserve System is operating, serving as a barrier against financial demoralization. Within a few months, industrial conditions will become normal, confidence and stabilization in industry and finance will be restored.”

Dec. 5 - Treasury Sec. Mellon said, “The Government’s business is in sound condition.”

Dec. 10 - Charles M. Schwab said, “Never before has American business been as firmly entrenched for prosperity as it is today.”

1930

Mar. 3 - U.S. Sec. of Commerce, Robert P. Lamont, said, “As weather conditions moderate we are likely to find the country as a whole enjoying its wonted state of prosperity. Business will be back to normal in two months.”

Mar. 8 - a Washington dispatch said, “President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.”

-John Maynard Keynes, in his two-volume Treatise on Money, pointed to the Fed’s record and said, “The successful management of the dollar by the Federal Reserve Board from 1923 to 1928 was a triumph…for the view that currency management is feasible.”

May 1 - Hoover said, “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”

Oct. 2 - Hoover said to the American Bankers Convention, “During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in an emergency.”

Oct. 3 - Henry Ford said in the New York Times, “The crash was a good thing…You watch.”

Today

Now let's come back to present times. Decades of Federal Reserve booms/busts coupled with never ending government regulations have twisted the economy into a Gordian Knot.

Finally, in 2008, reality emerged (it always does) and a major financial shock hit.

Prior to becoming Fed Chairman, Bernanke said that he would drop money out of helicopters if he had too. Well guess what? That's exactly what he did. He came through on his word.

His artificial band-aid made him a hero:

Treasury Secretary Tim Geithner is still receiving hosannahs. Henry Blodget recently kissed Geithner's feet:

We got through the crisis.

And in helping us get through the crisis, Mr. Geithner withstood an astounding amount of criticism, second-guessing, outrage, and ridicule...

The definition of strong leadership is not about making decisions that are popular.

Making popular decisions is easy — you don't need to be a leader to do that.

The definition of strong leadership is to make decisions that are unpopular, but are nevertheless sound.
In his roles as Head of the New York Fed and U.S. Treasury, Mr. Geithner made a lot of decisions that were immensely unpopular at the time. The course of history, however, has revealed that many of these decisions were sound.

Tim Geithner deserves a huge amount of credit for that.

So, well done, Tim Geithner!  You helped our country get through the storm.  

And we all owe you our gratitude for that.

Our period of calm is upon us today.

But, we must always keep in mind that the artificial is only temporary. It does not last. Money from helicopters is not, and never will be, the answer.

The free market and sound money are the answer.

Bernanke (who is blind as a bat) has become much like all of the characters from 1929 and 1930.

He has insisted:

"We have all the tools we need to undo our monetary-policy stimulus and to take that away before inflation becomes our problem."

Don't be among the many who will fall for his nonsense.

Bernanke's "tools" are about as powerful as this guy's fingers:

Tough times are (unfortunately) ahead.

Economic law plays no favorites. You'll either be positioned correctly, or you won't.

Read Mises...Read Rothbard...Position yourself appropriately.