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Fed policies anything but prudent
By Shawn A. Mesaros |
January 20, 2012, Friday
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WE couldn't help reading a recent article by Tyler Cohen, Harvard (Chicago School), and feel that someone left us a holiday present under the tree.
Somehow Mr Cohen believes that the USA is in a safe place relative to the rest of the world, and yet with our own Central Bank leveraged in excess of 100:1 you'd think a man with that pedigree would call it what it is: A ponzi scheme.
Just because the Fed can and does dramatically skew the appearance of risk through open market operations, just because I have a spectacular attorney who can get me out of any speeding ticket, no matter how ludicrous the driving, doesn't put my passengers in a relatively safer place.
"As the euro zone crisis continues, it seems that Ben S. Bernanke has been a smarter central banker than we had realized." Mr Cohen would opine that so long as Dr Bernanke isn't caught speeding and continues to hire good attorneys in traffic court, that not only are his passengers continuously safe, regardless of the reckless (printing) driving but additionally, we are somehow better off for this recklessness, and in fact his attorney will tell the courts that we are better off, that the police are wrong, and that Dr Bernanke should now be given a permanent free pass so that he might increase the level of recklessness since he hasn't been busted yet.
Manipulative actions
Long ago, the United States held a Tea Party in Boston, and the phrase of the day was "taxation without representation" where Americans rightfully disdained the tax levied by a foreign government for their own goods and services produced at home. The current Federal Reserve's (im)prudence as wonderously stated by Mr Cohen is in fact far worse.
Dr Bernanke, through his manipulative actions, has allowed the American government to fraudulently foist upon America another US$4.5 trillion in debt over the past four years. This would never have been possible if the market were allowed to float on its own.
Americans are hard working, simple people who prize the right to savings, freedom, ownership of property, their liberty prized above all else.
America never "voted" to run the ship aground with a nasty US$4.5 trillion in additional debt. Dr Bernanke's imprudence has allowed the nation this 3-4 standard deviation event in a world that is not tolerant of debt, excess, and reckless spending. Dr Bernanke has unwittingly caused the greatest buildup of debt at its zenith, in the post-war era and in fact, in the history of the world. We'd be hard pressed to consider these actions "prudent" and in fact, Americans prize liberty and sovereignty more than food stamps and living at the hand of an overreaching government.
Americans are tired of hearing about all of these so-called prudent policies which serve only to maintain the status-quo rather than fixing the problem at its core and moving forward.
Imagine the day when American debt is not desirable anymore. Why should it be desirable today? America has a population of a scant 300 million people and like Iceland, the debt levels on a per-capita-basis are an outright cartoon in proportion to people's ability to pay.
Then we leave it up to the government to tax-the-people in order to pay off what Americans never wanted in the first place.
The author is managing director of Pacific Asset Management. The views are his own. Shanghai Daily condensed the article.
Somehow Mr Cohen believes that the USA is in a safe place relative to the rest of the world, and yet with our own Central Bank leveraged in excess of 100:1 you'd think a man with that pedigree would call it what it is: A ponzi scheme.
Just because the Fed can and does dramatically skew the appearance of risk through open market operations, just because I have a spectacular attorney who can get me out of any speeding ticket, no matter how ludicrous the driving, doesn't put my passengers in a relatively safer place.
"As the euro zone crisis continues, it seems that Ben S. Bernanke has been a smarter central banker than we had realized." Mr Cohen would opine that so long as Dr Bernanke isn't caught speeding and continues to hire good attorneys in traffic court, that not only are his passengers continuously safe, regardless of the reckless (printing) driving but additionally, we are somehow better off for this recklessness, and in fact his attorney will tell the courts that we are better off, that the police are wrong, and that Dr Bernanke should now be given a permanent free pass so that he might increase the level of recklessness since he hasn't been busted yet.
Manipulative actions
Long ago, the United States held a Tea Party in Boston, and the phrase of the day was "taxation without representation" where Americans rightfully disdained the tax levied by a foreign government for their own goods and services produced at home. The current Federal Reserve's (im)prudence as wonderously stated by Mr Cohen is in fact far worse.
Dr Bernanke, through his manipulative actions, has allowed the American government to fraudulently foist upon America another US$4.5 trillion in debt over the past four years. This would never have been possible if the market were allowed to float on its own.
Americans are hard working, simple people who prize the right to savings, freedom, ownership of property, their liberty prized above all else.
America never "voted" to run the ship aground with a nasty US$4.5 trillion in additional debt. Dr Bernanke's imprudence has allowed the nation this 3-4 standard deviation event in a world that is not tolerant of debt, excess, and reckless spending. Dr Bernanke has unwittingly caused the greatest buildup of debt at its zenith, in the post-war era and in fact, in the history of the world. We'd be hard pressed to consider these actions "prudent" and in fact, Americans prize liberty and sovereignty more than food stamps and living at the hand of an overreaching government.
Americans are tired of hearing about all of these so-called prudent policies which serve only to maintain the status-quo rather than fixing the problem at its core and moving forward.
Imagine the day when American debt is not desirable anymore. Why should it be desirable today? America has a population of a scant 300 million people and like Iceland, the debt levels on a per-capita-basis are an outright cartoon in proportion to people's ability to pay.
Then we leave it up to the government to tax-the-people in order to pay off what Americans never wanted in the first place.
The author is managing director of Pacific Asset Management. The views are his own. Shanghai Daily condensed the article.
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