Wednesday, August 17, 2016

Bernanke Fiddles While U.S. Burns

May 31, 2010 by · Leave a Comment 

By Jeff Nielson, Bullion Bulls Canada

In 64 AD, the Great Fire of Rome occurred. It lasted for five days, and roughly half the city was seriously damaged or destroyed. This event took place during the rule of Emperor Nero Claudius Caesar Augustus Germanicus, more commonly known as “Nero”.

There are serious doubts that Nero actually “fiddled” while Rome burned, particularly given the fact that the fiddle wouldn’t be invented for another thousand years. Instead, his historical infamy appears to be mainly the product of his extravagant spending which threatened to bankrupt the Empire, combined with the ruthless persecution (and execution) of his enemies. He was also apparently prone to spreading rumors and propaganda among the citizenry, to cover-up his misdeeds and maintain his popularity.

Given the metaphor implied by the title, I’m sure there are many readers who believe it should have read “Obama fiddles” or “Democrats fiddle”. Rest assured there is no error here. Barack Obama is only the President of the United States. The Democrats merely control the White House, and the two legislative chambers. Meanwhile, Ben Bernanke and the Federal Reserve control the money supply of the U.S.

The United States has an economy which is both saturated with debt, and dependent on ever-increasing injections of new debt in order to function – in other words it is a debt-addict. Given that every new U.S. dollar which is “printed” can only be created through inventing new debt (ever since the U.S. abandoned the “gold standard”), this makes Ben Bernanke and the Federal Reserve the originator of most U.S. government debt, and thus the “pusher” for this junkie-economy.

In pursuing the analogy of the Federal Reserve as drug-pusher, we must remember there are three ways in which the “pusher” exploits (and ultimately destroys) the addict. It is the pusher who first gets the addict “hooked”, and then continues to supply the debilitating drug. It is the pusher who makes enormous profits off of this dependency. And it is the pusher who assures the addict that everything is fine, even as the addict’s life spirals out of control. It is only when we understand the junkie-pusher relationship that we can understand the inherently malicious and parasitic nature of the Federal Reserve.

Given that the Federal Reserve was created in 1913, it took a relatively long time for the Fed to get the U.S. hooked on debt, as the graph below illustrates. However, now that the addiction has clearly taken hold, Bernanke (and the rest of the private bankers who own and operate the Federal Reserve) have created such a lethal addiction that a fatal debt-overdose (i.e. a default) is now the only possible outcome.


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