The quote above is is not from the Peter Sellers movie, "Being There" a film about a developmentally challenged (we used to call them nutters) gardener, Chauncey Gardiner, who ends up as an advisor to the president of the US. It very easily could be from "Being There" and it has one thing in common with the film in that it is a quote from an adviser to the president of the US. Its Federal Reserve chairman, Ben Bernanke’s explanation as to why the economic outlook continues to “darken”
Brilliant Ben. That explains it all.
Well, not quite. There is more from the paper of finance capital and capitalism’s greatest and most astute theoreticians. The problem is that they can’t lower interest rates to coax investors to invest (hopefully in production) and consumers to buy commodities, because interest rates are almost at zero meaning money in practically free. In addition, there is the danger of inflation as increasing the money floating around in society without a corresponding rise in production tends to cause inflation.
Alright; that makes sense. But what’s the next move? The $600 billion bond buying program that the Federal Reserve instituted, (lending us money) to spur consumption is about to end at the end of June and some “experts” say more stimulus is necessary while others say the program never worked at all as the state of the US economy confirms. To pump more money in to the economy they say, would “sow the seeds” of inflation. Damn, there go those Chauncey Gardiner quotes again.
Wait, I’m looking for an answer here. There must be something else. There must be an explanation for why I have friends who have lost their jobs, homes and their access to health-care. Let’s see, the experts say that it could be worse though and what’s really keeping us from hitting rock bottom (apart from the taxpayer bailouts over the last three years) is the “booming global economy------lifting the fortunes of US companies abroad.” It appears that Federal Express saw its profits increase 33% in the Q2 of 2011 compared to last year, mostly profits generated outside the US. It appears the world is an economically very integrated and interconnected entity. That must be a bit of a problem as it consists of separate nation states.
Let’s see, the 2012 economic outlook is “revised down”, Ok, I get that. The unemployment rate is going to “linger at higher levels than previously expected”, well I understand that as well as I know a lot of people who haven’t worked in a while and they're having trouble finding anything. But I can’t seem to find a way out here.
Oh, maybe this is it. Bernanke says the reduction in the fed’s economic forecast is “fairly significant”. No, I figured that out.
Oh well, I’m not sure I can find an answer to our problems here, I just wish I’d have went to college it could have learned me somethin’. It must be my fault because they are experts.
Bernanke’s negative report caused some concern for the owners of capital and the Dow fell 80 points this article says. They are glad though because the Fed ( a private institution than manages the economy so people like Warren Buffet can have a good time) promised it wouldn’t pump more money in to the economy which would increase inflation as they already said and weaken the dollar further; more dollars increases supply therefore the price, just like any commodity declines. This positive note strengthened the dollar but the downside of that is that the stronger dollar hurts US exporters as it makes the prices of our exported goods more expensive which would lead to layoffs and factory closures in those industries. What a mess, it seems they're damned if they do and damned if they don't.
Man, I am totally at a loss, it seems there’s no way out of this on the present basis. But wait, I missed this. I’ve seen this guy’s writings before, Mohamed El Erian the CEO of a big moneylending firm seems to be saying that the system has “underlying structural problems”
Now I get it, we have to change the structure. My gut instinct has been right all along.
* Fed Darkens its Outlook But Plans No Changes: Wall Street Journal, 6-23-11
1 comment:
I worked in a mental hospital for three years, and we used to advise patients when they complained that another patient had insulted them, "Consider the source." What do you expect from a psychiatric case? If you know anything about Ben Bernanke, you have to "consider the source." That may sound insulting, but in 2006 he said something like, "Everything will be contained, it's just a slight blip." If he said something positive, then we'd have something to worry about. It's good news that things are getting worse. If Chauncey Gardner were here he would agree.
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