Bernanke Opens the Monetary Spigots

Fed chief Bernanke in the US, together with European Central Bank chief Draghi in Europe,  are implementing the destruction of the euro and the dollar simultaneously, through hyperinflation, in a desperate attempt to save the banks -- at least until after November's election in the US. Unless Obama is removed now, preferably by impeachment BEFORE the election, then the combined hyperinflationary collapse of the western economies and a new war in the Mid East, threatening nuclear confrontation with Russia and China, are inevitable. 

    The following is in the current EIR.        Mike Billington

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Bernanke Opens the Monetary Spigots

by Paul Gallagher

Sept. 18—Coordinated with, and exactly like European
Central Bank (ECB) chief Mario Draghi’s announcements,
U.S. Federal Reserve Chairman “Helicopter
Ben” Bernanke’s Quantitative Easing III policy, announced
Sept. 13 after the Fed’s Open Market
Committee meeting, is unlimited money printing, open-ended
in time and volume, and aimed at simply pouring hundreds
of billions in new Fed notes into the large banks
to bail them out of their worthless mortgage-backed securities
yet again. Any cynical attempt, as by Bernanke
himself at his post-meeting press conference, or by
President Obama, to call this a “Main Street policy” “to
create employment,” will be rapidly blown away in an
inflationary debt spiral.
     Even the numbskulls at the Fed know what the inflationary
result will be. QEI and QEII (2008, and 2010,
respectively) each drove food and fuel price increases
of about 50%, according to generally accepted statistics.
And even prior to the Bernanke announcement, the
process was underway in the U.S.: The Labor Department
reported Sept. 14 that wholesale inflation took off
in August. Food prices rose 1%. Fuel prices rose 13.6%.
Statistical legerdemain (food and fuel don’t get counted
in the inflation statistics!) kept the overall producer
price rise to “just” 1.7% for the month, after nearly a
year of claiming no wholesale inflation at all. So when
the rigged consumer price index was announced Sept.
15, it showed up 0.7% in August.
     And living standards? Average U.S. hourly earnings
were unchanged, so “real earnings” fell 0.7% in
the month, according to the Labor Department. Real
weekly earnings fell 0.6%. It also reported that unemployment
claims are rising again in the direction of
400,000 (382,000 the week ending Sept. 14). Then
the Federal Reserve reported that industrial production
dropped 1.2% in August from July, the largest
one-month drop since “the bottom” in early 2009. Capacity

utilization dropped to 78.2%, lowest in over a
year.

             Pump Out the Money     Into this economic contraction, Bernanke promised
to pump $80-85 billion per month, indefinitely, in net
securities purchases from the banks; zero interest rates
to mid-2015 (which would make six years); and, if
mass unemployment and labor force shrinkage do not
improve (“Fewer than half the 8 million jobs lost in the
recession have been restored,” Bernanke said, despite
Obama’s claims), the Fed may add additional moneyprinting/
bond-buying to its announced $80-85 billion
per month at any time.
     Former Fed governor Kevin Warsh on CNBC this
morning said of the Fed bailout: “If they believed the
economy and prospects were moving even slowly to a
higher path, I don’t think they would have decided to be
nearly as aggressive as this.”
     In effect, Bernanke adopted “GDP targeting” and
“employment targeting” in a developing situation of
contracting GDP and employment—a recipe for a hyperinflationary
debt spiral. At the ECB, “Hyper-Mario”
Draghi adopted “interest-rate targeting” in the same
spiral. But it’s all going to bail out big banks, which are
nonetheless unable to lend.

                         ‘QEIV-Ever’      The conservative web publication The Examiner,
calling it “QEIV-ever,” noted: “The future consequences
of today’s Federal Reserve action will not be seen completely
in a day, or in a week, but rather, in totality over
the next six to nine months. What the Fed did was to . . .
play their final hand, and by instituting open-ended
quantitative easing, the markets, currencies, and now,
the American people, understand that inflation, and possibly
hyper-inflation, are very real scenarios.”
     The Examiner’s co-thinkers at zerohedge.com had
this to say: “The Fed has as of this moment exposed its
cards for all to see from here until the moment it has to
start tightening the money supply (which may or may
not happen; frankly we don’t think the Fed tightens
until hyperinflation sets in at which point what the Fed
does is meaningless).”
     Economist John Williams of shadowstats.com, in an
interview, forecast “hyperinflation, not late in the
decade as I previously forecast, not in 2014 as I said
more recently, but hyperinflation by 2013