By Dominique de Kevelioc, de Bailleul
Beacon Contributing Writer
In today’s centrally controlled media and sophisticated techniques of mass mind control and suggestion, finding the truth�whatever that is�requires lots of effort and courage.
We heard the mantra during the housing bubble that real estate never declines.� Well, the awful decline in housing prices is not a first.� Ignoring the purchasing power of the dollar hides three previous downturns in the median home price in the United States since 1970, from 1973 to 1976, again from 1979 to 1983, and during the period of 1989 to 1997.
Some self-serving folks and, mostly, the ignorant deluded themselves and poisoned others in the process regarding this outright falsehood.� Americans now find themselves bankrupt, near-bankrupt or impoverished believing such foolishness.� The lemmings ran off the cliff by the millions.
Who controls the past, controls the future: who controls the present, controls the past.
�George Orwell
The latest mantra must warm the heart of the Fed: The economy is under threat of deflation.
The markets don’t agree, however.� Since the collapse of Lehman Brothers and subsequent lows of March 2009, a basket of 19 commodities which make up the Commodities Research Bureau Index (CRB) increased 47% from the March lows.� The mother of all commodities, oil, hit a low of $35 per barrel in March 2009, and now trades north of $85.� Where’s the deflation?
Just as the ridiculous notion that housing prices never fall, the chatter surrounding the Fed‘s fear of deflation is ridiculous as well.
Fed Chairman Ben Bernanke has repeated his real fear on several occasions, during testimony before various Congressional committees, Federal Open Market Committee meetings, and in various speeches.� Bernanke’s fear centers on �inflation expectations.�
As long as lenders, borrowers, investors, and savers fear deflation, the Fed can print more and more money and the world will buy it, fearing that buying real assets will lose them money.� And if the world expects deflation in the future, buying debt, especially U.S. Treasury debt, appears to make a lot of sense.� With $129 billion in government debt to be auctioned this week and trillions more in the future, no wonder the Fed spews the word deflation wherever it can.
But we must remember that the Fed needs a complicit media to get away with this nonsense.� Financial programming originating from the U.S. has long ago been hijacked.� The days of Jack Anderson, and later, Bob Woodward and Carl Bernstein, are over.� The corporate/fascist model of controlling flows of information is in full swing.� No funny mustaches, uniforms or berets this time.� Getting conned by a bunch of suits sporting nice haircuts has already worked during the financial con game, so the suits with conservative haircuts will probably be the fashion during this coup.
“Either you think – or else others have to think for you and take power from you, pervert and discipline your natural tastes, civilize and sterilize you.”
�F. Scott Fitzgerald
Why anyone would touch U.S. Treasuries yielding less than the real inflation rate boggles the mind.� Consumer price inflation for the March reached nearly 9.5% year-over-year, according to John Williams of� Shadowstats.com.� Therefore, buying a 10-year Treasury note for a 3.8% yield loses money at a rate of 5.7% per year.
Interest rates aren’t near-zero as we hear over and over again; real rates are negative across the yield curve.� Deflation?� This Fed is printing so much money it’s hard to imagine anything but hyperinflation down the road.� The world’s savings aren’t enough to absorb this amount of new debt offered by the U.S. Treasury.� The Fed, itself, must buy Treasuries in a true monetization of debt scheme, Weimar style.
�Spending by the federal government is out of control, causing it to borrow record amounts. The money to fund this growing mountain of debt must come from savings or �printing�, and the sad fact is that there is not enough accumulated savings in the known universe to satisfy the spending aspirations of Washington�s politicians,� writes one of the leading expert of precious metals, James Turk, of Goldmoney.com.� �So beyond what it can collect from taxpayers and extract from the world�s savings pool, the dollars the federal government is spending can only come from one place � the �printing press�, which in the prevailing monetary system means bookkeeping entries of the Federal Reserve.�
As long as the public is fooled into thinking the economy is headed for a deflationary collapse, the Fed can continue printing money at cheap rates and fill the gaping losses within the banking system while reducing real debt levels of the U.S. Treasury at the same time.
The day will come, however, when Bernanke’s fears are realized.� Inflation expectations will be back again, along with polyester bell-bottoms, platform shoes and the Bee Gees.� But this time, a percent per month hike in consumer prices will seem like a picnic in comparison to what’s in store.
People demand freedom of speech to make up for the freedom of thought which they avoid.
- Soren Aabye Kierkegaard
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