Posted 22 May 2013 - 09:18 PM
I had this great post ready to go this am, before the market turned tail.
I was distracted, and so it never got posted.
It was mostly about Ben's persistent bubble blowing, and that some day, when he was forced to take the spiked with grain alcohol 190 proof punch bowl away, there would simply be no bid under the market.
So Im writing something different.
Thus far, here is what Ben has destroyed that ain't never coming back, no matter what anyone does:
1) First and foremost, he's completely and utterly destroyed forever, fractional reserve banking.
Its gone. Ka-poof. What's currently left is a figment of some former banker's imagination. The industry has no shred of cred left. What replaces it is anyone's guess at the moment.
Not sure this is a bad thing or if its by design.
2) He utterly destroyed a consumer's ability to save, and ability to discern value. Savings are gone. Sure there are dollars on deposit, or under mattresses, but we now have 3 generations, who have lost all concept of what it means to save, why that's integrally important to EVERY and ANY well functioning society.
3) The market no longer has a viable or meaningful price/risk signals. Those are gone. When the spreads between "junk" and the safety of government bonds no longer are at a level that represents to most, what 'risk' is, then you do not have anywhere close to a normal and healthy functioning market. People can no longer determine what is truly risky, and certainly no one is getting close to being appropriately compensated for 'risk.'
4) Bernanke, and all central banks, have perpetuated and magnified beyond all comprehension, the ability for derivatives to so proliferate the financial system, that it is now IMPOSSIBLE to ever unwind them. This is what happens when you attempt to use monetary policy to over manage and compensate for a healthy functioning capitalist structure. ZIRP is not a policy. Its a death trap. People just dont grasp the concept of interest rates at all. Bernanke would have you believe he is the '*******' of such, but make no mistake, he's been on a fool's errand.
5) Destruction of hope. The President's mantra more than 5 years ago was a message that seemed to resonate with an entire segment of the country's population. Bernanke destroyed all sense of hope, not just for the millions who remain jobless, or the millions more who remain part time permanent 'employed', but for all the generations after the boomers, who now see the stock market for the casino it has been for more than 10 years running, targeted by monetary policy, and equally the bond market which he has single-handedly distorted to the point that its doubtful government issued bonds will exist as a functioning financial mechanism much beyond this decade. When you have someone like Bill Gross persistently in public angst over what he has openly termed a bond bubble, you know the public statements understate the magnitude of the disaster bond issuers face.
Will mainstream former 'savers' ever have any hope of obtaining reasonable level of interest on their money ?
Will bond issuers ever have hope, that the debt will ever be re-paid ?
Will bond buyers, ever have hope of being reasonably compensated for their risk of buying debt ?
Will bank savers, who are by law unsecured creditors, ever come back to a banking system who's entire concept was based on a simple little word called 'trust' ?
A lot has been destroyed by Bernanke, who was somehow bequeathed unimaginable power, where no other Fed board member could ever say truly what he or she thought.
If this is a man who truly wants to 'step aside' now, or 'step away' from the disastrous mess he has created, and not just in our country but in all of Europe, and many other lessor known geographies, what we have in our midst is nothing more than a coward. Someone so hell bent, and so unwilling to acknowledge he has made any mistake, and so willing to not change course, and attempt to make meaningful changes in direction, started by his predecessor, Alan Greedspam, then what we have is a complete coward, who is now shirking his duties, responsibilities, even moral obligations, and simply handing the mess he created over to someone else to somehow 'fix.'
Shame on Ben Bernanke, shame on the people who allowed, endorsed, capitulated, or any number of lame [bleeep] so called 'leaders of the free world' in not standing up for what is right, true, and most of all, a courageous act that is worthy of the citizens who truly make up this country, and other countries, who are still now somehow completely beholden to corporations or the rich elitists who make my, and everyone's stomach turn.
If this comes anywhere close to marking a top, even if not a market top, but a signaling of a market turn, then it will be poetic justice for the recrimination and rebuke of one Ben Bernanke, the serial bubble blower, who deserves nothing less than a hot place in hades.