Bernanke to Congress: We're much closer to destruction than you think

[PaulSoHard]

http://www.cnbc.com/id/41491193/Bern...Than_You_Think

Official Congressional budget estimates understate the peril of rising debt, Fed chair Ben Bernanke told the Budget Committee on Capitol Hill today.

Warning that our nation's fiscal health has deteriorated appreciably since the onset of the financial crisis and the recession, Bernanke called upon lawmakers to confront the long term fiscal challenges sooner rather than later. If lawmakers don't confront them, they'll find themselves confronted by them.

Controlling fiscal policy and spending? Looks like Ron Paul was right for the umpteenth time.

[Acala]

The Muslims did this to us with their damn Sharia law! Kill them! (ahem, China . . . could we borrow some money so we can . . . uh . . . kill some more terrists?)

[Brian4Liberty]

Wasn't there a thread on this story yesterday? It seems to be gone.

[John F Kennedy III]

Bernanke’s Warning: We Stand on the Precipice of Economic Destruction

Kurt Nimmo
Infowars.com
April 12, 2012



Earlier this week, Federal Reserve boss Ben Bernanke again warned that out of control borrowing and spending will eventually destroy the country.

Said Ben to the the Budget Committee:


Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living. Moreover, diminishing investor confidence that deficits will be brought under control would ultimately lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil. In a vicious circle, high and rising interest rates would cause debt-service payments on the federal debt to grow even faster, resulting in further increases in the debt-to-GDP ratio and making fiscal adjustment all the more difficult.

But here is something Bernanke didn’t mention – a large chunk of that debt is owed to the Federal Reserve. In February, the corporate media fessed up to this undeniable fact. From CNBC:


That’s right, the biggest single holder of U.S. government debt is inside the United States and includes the Federal Reserve system and other intragovernmental holdings. Of this number, The Fed’s system of banks owns approximately $1.65 trillion in U.S. Treasury securities (as of January 2012), while other U.S. intragovernmental holdings – which include large funds such as the Medicare Trust Fund and the Social Security Trust Fund - hold the rest.

The bankers that own the Federal Reserve love debt and that’s why they continually expand the money supply.

“Without the Fed’s relentless expansion of the money supply during both the Greenspan and Bernanke eras, the U.S. Treasury never would have been able to issue the staggering sums of debt that now threaten our economic well being,” Ron Paul told the House Committee on Financial Services Subcommittee on Domestic Monetary Policy last year. “This Treasury debt is the very lifeblood of deficit spending, permitting one Congress after another to spend far more than the Treasury collects in taxes. It is precisely this unholy alliance between the enabling Fed and a spendthrift Congress that I hope our witnesses will address today.”

It’s a great situation for the warheads in the Pentagon and the military industrial complex. Excluding Social Security and other “trust funds” (no pun intended), the Pentagon spends most of this money. Flush with trillions, they are free to continue and expand the wars necessary for the globalists to extend their reach (as they are now doing in Africa).

The debt wrecking ball is doing a fine job of destroying the middle class and making sure America becomes another third world cesspool like Mexico and eventually sub-Sahara Africa. As of last year, the debt officially exceeded 100% of the nation’s gross domestic product, in other words the debt is now as big as everything we produce in America.

In order to pay off this staggering debt, the Federal Reserve will print more money out of thin air and expand the money supply which will lead to more inflation that will whittle away at the middle class and the living standards of all Americans.



“Greece, and more precisely Italy and Spain, are our ghosts of the future past. The Fed will print more money. That’s what they do. They work for the banks,” Capital Waves Strategist Shah Gilani told Business Insider in January.

The Greek dilemma is coming to America. The debt owed by Greece was 160% of that country’s GDP last August and the average yield on Greek debt was around 15%. “Thus, if Greece’s debt is rolled over without restructuring, its interest costs alone will amount to approximately 24% of GDP. In other words, if debt pardoning does not occur, nearly a quarter of Greece’s economic output will be gobbled up by interest repayments,” writes Puru Saxena for 321 Gold.

In August, Ron Paul introduced HR 2768, legislation designed to cancel $1.6 trillion in debt. “I would say that is not a real debt. It’s a fictitious debt. It’s a dishonest debt, and that we’re not obligated,” he said.

HR 2768 disappeared into the maw of a congressional committee and will likely never be seen again. A previous bill introduced by Ron Paul, Audit the Fed, was severely adulterated under pressure exacted by the Federal Reserve and the Obama administration. In June of 2010, the bill failed by a vote of 229-198.

Bernanke’s remarks earlier this week serve as a warning of things to come. His “fiscal adjustments” (i.e., tax increases and the entire palette of IMF styled austerity) will indeed “come as a rapid and painful response to a looming or actual fiscal crisis,” one designed by a cartel of international bankers who specialize in the destruction of nations, fire sales, and wholesale misery.

Ron Paul offered an escape hatch, but it was shuffled off to the oblivion of a congressional committee.

Soon enough, we will suffer the result.


original article here:
http://www.infowars.com/bernankes-wa...c-destruction/

[WilliamC]

Bernanke might not have much to say about it much longer, and whatever control he has is based only on willingness of people he has no control over to keep accepting the US dollar.

As soon as that goes, (or maybe some other event) then it won't matter what Bernake says anymore.

[DamianTV]

The dollar we have right now is not the dollar we should be concerned with. The Fiat Dollar needs to die, but we need to have a backup plan of a Value Dollar (backed by Value, like Gold or Silver, not Debt) to switch over to. Here comes the Amero, or the World'o. What are they planning on calling the form of currency that every country in the world will use? Not that it matters, the International Banksters will surely try to make sure they control the issue of it, it will be Debt Based, Fiat, and planned to Self Destruct before even being implemented.

We can use the situation to our advantage. The Charter on the Federal Reserve expires next year. 100 year Charter. We can allow it to go bye bye and replace it with an Honest Money System.

[Zippyjuan]

Sorry- the Fed charter does not expire next year. The Federal Reserve Act did not include any expiration date.

[Marenco]

We have been warned.

''The fatal possession of the whole circulating medium by our banks, the excess of those institutions, and their present discredit, cause all our difficulties.'' -- Thomas Jefferson, The Writings of Thomas Jefferson

[anaconda]

Species populations expand in good times and contract in bad times. Perhaps humans will be no exception.

[PaulStandsTall]

Guys.

Lets just get on the Gingrich 2012 train. Then we can all live on the moon and stuff. I mean, wandering space is a lot cooler than having to think about national debt and deficits.

[rockerrockstar]

This just adds more validity to my fears of a default or high inflation. Of course meaning also the fear that soon we will have higher taxes and interests on loans too. Scary to think that interest rates could be high as they were in the early 80s again. Like 20% for a car or home. The prime rate in 1981 was 20%. Inflation in 1980 was 14.8%. We could get tax increases like Grease maybe an increase of 30% more in taxes. It could be a disaster and make things even worse for our economy and life. This will stall or majorly lengthen the time to any recovery.

[LibertyEagle]

Wasn't there a thread on this story yesterday? It seems to be gone.

Yes, it was my thread and I asked for it to be removed. I saw the story come across Facebook from a RP grassroots group and assumed it was current. It is not. The article is 1 year old.

Published: Wednesday, 9 Feb 2011 | 11:09 AM ET

[oyarde]

" Mucho closer to destruction than I think " ?? Nah , I think we are closer than he does ....... , but for Liberty Eagle , I have reserved , one bottle of good wine in my stash of 15 bottles, behind my home canned green beans .

[rockerrockstar]

Hope we are not close to destruction but I fear we are. I really want us to have a good recovery.

[DamianTV]

Hope we are not close to destruction but I fear we are. I really want us to have a good recovery.

Everyone wants to recover from this Financial Armageddon. We just want the Recovery to be on OUR Terms, not the Banksters!

[oyarde]

Hope we are not close to destruction but I fear we are. I really want us to have a good recovery.

Me too , but the writing is on the wall , look at the CBO numbers for projected debt , and remember those are based on a false , unattainable growth , under real numbers for social security , medicare , medicaid , obamacare , pensions , then , remember that 36 % of US business is currently consumed in taxes and dollars spent to meet regulation , then remember that half of America pays no Fed tax , and that half will continue to vote for those that will give them some " free " $#@! . Disaster , nearly irreversible at this point ... If I am wrong , and still alive in 2029 , I will buy you a $100 beer , that will be the going rate probably , for the cheap $#@! , if you can get it...

[John F Kennedy III]

wandering space is a lot cooler than having to think about national debt and deficits.

I agree.

[John F Kennedy III]

Everyone wants to recover from this Financial Armageddon. We just want the Recovery to be on OUR Terms, not the Banksters!

In other words, a genuine recovery.

[oyarde]

In other words, a genuine recovery.

Yes , chances though , grow worse each day with inaction of spending cuts .

[Bern]

From the report in the OP:

From Bernanke's prepared remarks:

By definition, the unsustainable trajectories of deficits and debt that the CBO outlines cannot actually happen, because creditors would never be willing to lend to a government with debt, relative to national income, that is rising without limit. One way or the other, fiscal adjustments sufficient to stabilize the federal budget must occur at some point. The question is whether these adjustments will take place through a careful and deliberative process that weighs priorities and gives people adequate time to adjust to changes in government programs or tax policies, or whether the needed fiscal adjustments will come as a rapid and painful response to a looming or actual fiscal crisis.

This is the same thing Ron Paul has been saying for years. $1T mofos. Who's serious now?

[Zippyjuan]

As Europe has seen with their austerity programs, any sharp cuts in government spending means more people losing jobs and thus higher unemployment. That means lower government revenues from taxes and higher expenses for things like unemployment insurance which means you need to make more cuts. That is why they would like to move slowly in reducing the budget deficit. That they are gridlocked on how to do any reductions in the first place (Republicans want only cuts, Democrats want more taxes raised) will not help them make any progress in either direction so things will likely continue to float along as they are.

[WilliamC]

As Europe has seen with their austerity programs, any sharp cuts in government spending means more people losing jobs and thus higher unemployment. That means lower government revenues from taxes and higher expenses for things like unemployment insurance which means you need to make more cuts. That is why they would like to move slowly in reducing the budget deficit. That they are gridlocked on how to do any reductions in the first place (Republicans want only cuts, Democrats want more taxes raised) will not help them make any progress in either direction so things will likely continue to float along as they are.

This ignores that eventually all bubbles will burst, the gridlock will end when either the system is reformed or chaos overtakes it.

It won't just 'float along' forever, but I don't know exactly when our world economic system will crash (i.e. the plastic stops working and short term credit disappears like it almost did in '07)



But without systemic reform, crash it will

[Zippyjuan]

Bernanke seems to feel that the economy is finally doing well enough to finally consider reducing Federal spending. In the earlier years of the economic crisis he was against any cuts and wanted higher spending to help the economy out. This is a definate change in his position.

[WilliamC]

And when has Bernanke been right about his predictions before?

Oh, that's right, he hasn't.

The Fed is no longer in control of much of anything that I can tell, except being able to hyperinflate.

[Black Flag]

Read he said:
"Warning that our nation's fiscal health has deteriorated appreciably since the onset of the financial crisis and the recession, Bernanke called upon lawmakers to confront the long term fiscal challenges sooner rather than later. If lawmakers don't confront them, they'll find themselves confronted by them."

He will not hyper-inflate. That is his warning. He just said "Guys, one day I will not print money to buy your T-bills, and then you will really have problems"

[anaconda]

I have reserved , one bottle of good wine in my stash of 15 bottles

Varietal? Producer? Vintage?

[DerailingDaTrain]

It's a year old? Damn. How close are we to destruction now?

[anaconda]

It's a year old? Damn.

That's what I thought at first but I think he said it again just recently.

http://www.conservativeactionalerts....han-you-think/

Correction. this apparently DOES refer to Feb. 2011. Sorry. For what's it's worth, here's the text of a speech by Ben earlier this week:

http://www.federalreserve.gov/newsev...e20120409a.htm

[LibForestPaul]

As Europe has seen with their austerity programs, any sharp cuts in government spending means more people losing jobs and thus higher unemployment. That means lower government revenues from taxes and higher expenses for things like unemployment insurance which means you need to make more cuts. That is why they would like to move slowly in reducing the budget deficit. That they are gridlocked on how to do any reductions in the first place (Republicans want only cuts, Democrats want more taxes raised) will not help them make any progress in either direction so things will likely continue to float along as they are.

please explain and give examples..
specific European country...
specific program...
specific unemployment...
thx!

[Zippyjuan]

please explain and give examples..
specific European country...
specific program...
specific unemployment...
thx!

How about Paul Krugman as a source?
http://www.thestar.com/opinion/edito...european-peace

More than half of Greece’s small businesses expect to declare bankruptcy soon, and a quarter of a million jobs may vanish in 2012, with only one worker hired for every seven laid off.

Just as those numbers can’t be ignored, Spain’s dilemma can’t be candy-coated. It’s the euro zone’s fourth largest economy. Its GDP slipped 0.3 per cent in the fourth quarter and will worsen this year, as will its astounding unemployment rate of 23 per cent. Five million people are out of work.

At what point does unemployment, especially in European nations with younger populations, spur violence and even government overthrow?

At what point will the politicians, bankers and economists sandpapering Europe with what they call austerity, what the theorist Jan-Werner Müller in the London Review of Books calls “ordoliberalism” (state-supervised neo-liberalism) and what the Nobel Prize-winning economist Paul Krugman calls simply wrong, realize that they’re making things worse?

“Slashing spending in a depressed economy depresses the economy even more, and if you don’t have to, you shouldn’t do it — you should wait until the economy is stronger,” Krugman wrote in his blog last week, as he does virtually non-stop now. He even characterized Europe’s self-destructive tendency by quoting the classic — meaning, still funny — British comedy Yes Minister. “We must do something. This is something. Therefore we must do it.”

And that something is criminal folly, Krugman writes.

As far as the economy is concerned, the government is the same as any other company. It can hire or fire workers. When budgets get cut, that means that people lose their jobs and unless there are already jobs in the economy for them to go to (and there aren't) then those people get added to the numbers of unemployed. Unemployed aren't getting paid (unless it is unemployment insurance which would be a government expense) and that means no income or social security taxes being paid by them (Government revenues). Their consumption goes down too since they don't have money to spend so sales taxes (usually state and local revenue sources) go down. And since these people aren't buying as much, the places they used to shop at see their business decline and they need less help as well so others lose jobs or hours of work as well.

http://www.reuters.com/article/2011/...79H1TE20111018

(Reuters) - Greece's jobless rate rose to 16.5 percent in July, its second-highest level on record, driven by EU/IMF-imposed austerity measures which have plunged the economy into its fourth consecutive year of recession.

Data from national statistics agency ELSTAT on Tuesday showed unemployment rose from 16.0 percent in June as job cuts in the wider economy outweighed a rise in seasonal tourism.

The reading -- exceeded only by the 16.6 percent rate recorded in May -- was sharply higher than in the same period last year, when it stood at 12 percent. The number of the unemployed grew by more than a third to about 820,000. Greek unemployment figures are not adjusted for seasonal factors.

"The pace of decline in employment in basic sectors of the economy, such as construction, retail and wholesale trade, could not be mitigated from seasonal hiring in tourism," said Nikos Magginas, an economist with the National Bank of Greece.

Spain would be an excellent example too.

Spain faces unemployment pain after embracing austerity in European crisis

http://www.washingtonpost.com/world/...VJR_story.html

Spain’s drastic belt-tightening has moved government accounts in the right direction for the first time since the European financial crisis erupted last year. But in so doing, it has braked the economy into recession, accelerating a wave of firings and darkening the horizon for millions of workers.

In most of the 17 countries using the E.U. common currency, the euro, this has become the no-win choice leaders have had to make: balance budgets but forsake growth and jobs. Although they regularly promise to stimulate their economies — particularly France’s President Nicolas Sarkozy, who faces elections in the spring — the deep spending cuts required to carve down deficits and public debts have, in fact, strangled economic activity.

With the exception of Germany, zero growth or even recession has been predicted across most of the continent for the rest of the year and perhaps beyond. As a result, tax receipts needed to finance government action are declining and, in the saddest human toll, unemployment has risen to new heights.

Rajoy warned last week that unemployment in Spain — already Europe’s highest at nearly 23 percent — is likely to climb still higher before the year is out. The prospect for young people, those 24 and younger, among whom unemployment has reached 46 percent, is particularly bleak.