Ben Bernanke Says He Is 100% Confident In His Ability To Control Inflation

by | Dec 6, 2010 | Forecasting | 50 comments

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    Ben Bernanke - World's Premier Contra-Indicator

    Before we bring you Federal Reserve Chairman Ben Bernanke’s latest guarantees and expert opinion, as well as a near perfect forecast for the future, we present to you some of his greatest hits:

    July 1, 2005  Interview on CNBC
    INTERVIEWER: Ben, there’s been a lot of talk about a housing bubble, particularly, you know [inaudible] from all sorts of places. Can you give us your view as to whether or not there is a housing bubble out there?

    BERNANKE: Well, unquestionably, housing prices are up quite a bit; I think it’s important to note that fundamentals are also very strong. We’ve got a growing economy, jobs, incomes. We’ve got very low mortgage rates. We’ve got demographics supporting housing growth. We’ve got restricted supply in some places. So it’s certainly understandable that prices would go up some. I don’t know whether prices are exactly where they should be, but I think it’s fair to say that much of what’s happened is supported by the strength of the economy.

    July 1, 2005 Interview on CNBC
    INTERVIEWER: Tell me, what is the worst-case scenario? We have so many economists coming on our air saying  “Oh, this is a bubble, and it’s going to burst, and this is going to be a real issue for the economy.” Some say it could even cause a recession at some point. What is the worst-case scenario if in fact we were to see prices come down substantially across the country?

    BERNANKE: Well, I guess I don’t buy your premise. It’s a pretty unlikely possibility. We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.

    March 28, 2007 Testimony before the Joint Economic Committee, Congress
    Although the turmoil in the subprime mortgage market has created severe financial problems for many individuals and families, the implications of these developments for the housing market as a whole are less clear. At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.

    January 10, 2008 Response to a Question after Speech in Washington, D.C.
    The Federal Reserve is not currently forecasting a recession.

    June 10, 2008 Remarks before a bankers’ conference in Chatham, Massachusetts
    The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.

    From the man who’s done so well at forecasting the economic crisis, here are Ben Bernanke’s most recent comments – we advise readers to take note, because given Mr. Bernanke’s historical forecasting results, you’ll get a pretty good idea of what to expect going forward:

    Excerpts transcribed by Zero Hedge

    Q: What did you see that caused you to pull the trigger on the $600 billion, at this point?

    BERNANKE: It has to do with two aspects. The first is unemployment. The other concern I should mention is that inflation is very, very low, which you think is a good thing and normally is a good thing. But we’re getting awfully close to the range where prices would actually start falling.

    Q: Is keeping inflation in check less of a priority for the Federal Reserve now?

    BERNANKE: No, absolutely not. What we’re trying to do is achieve a balance. We’ve been very, very clear that we will not allow inflation to rise above two percent or less.

    Q: You have what degree of confidence in your ability to control this?

    BERNANKE: One hundred percent.

    Q: How would you rate the likelihood of dipping into recession again?

    BERNANKE: It doesn’t seem likely that we’ll have a double dip recession. And that’s because, among other things, some of the most cyclical parts of the economy, like housing, for example, are already very weak. And they can’t get much weaker. And so another decline is relatively unlikely. Now, that being said, I think a very high unemployment rate for a protracted period of time, which makes consumers, households less confident, more worried about the future, I think that’s the primary source of risk that we might have another slowdown in the economy.

    Q: You seem to be saying that the recovery that we’re experiencing now is not self-sustaining.

    BERNANKE: It may not be. It’s very close to the border.  it takes about two and a half percent growth just to keep unemployment stable. And that’s about what we’re getting. We’re not very far from the level where the economy is not self-sustaining.

    As the world’s premier contra-indicator, Ben Bernanke’s analysis and forecasts should not be taken lightly. Using Bernanke’s historical and recent musings, we can create a fairly accurate forecasting model which leads to the following predictions:

    • The Federal Reserve is doing everything it can to get inflation going – keeping it in check is not a priority, as has been the case for the last 100 years. Over the last century the US dollar has lost of 95% of its purchasing power. If the Fed has its way, we will infinitely approach 100% until the dollar is complete destroyed and replaced by a new currency.
    • The housing market will continue to deteriorate and is nowhere close to a bottom in nominal terms. While the perception may be that home prices are rising, adjusted for inflation relative to things like food, energy and precious metals, home prices will actually collapse. Another decline is highly likely.
    • Unemployment may be stable at 2.5% economic growth if we do not factor in new laborers entering the work force. We need to produce well over 100,000 new jobs just to keep up with new laborers. This is not happening now, and it will certainly not happen if and when the economy goes back into recession, which, arguably is right now, even though by official standards the economy is growing.
    • The economy is not only not close to the border in terms of self sustained growth, it has fled south, along with many illegal immigrant migrant workers who have realized that there are no jobs here. If our economy was self sustaining then we would not require another $600 billion cash infusion to keep jobs and equities markets propped up.
    • We are 100% confident that Ben Bernanke and his team of economic whiz kids do not have the ability to control growth in our economy, or keep inflation under 2% once it begins to spiral out of control.

    Mr. Bernanke just told us exactly how this is going to play out – but you have to know how to read his forecasts. Hopefully we’ve shed some light on this for you.

    Watch CBS ’60 Minutes’ Interview with Ben Bernanke:


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      1. I watched as much of what Bernanke said as I could stand to ingest before I was forced to change the channel.

        What scared me is that he really seems to believe what he says.  He is doing his very best to do the right thing in his own mind.  Unfortunately, his mind is not very sound. 

        Another thing that scared me is how much of his views and policies are based on the skewed statistics put out by the government.  He really seemed to mean it when he said there was no inflation.

        I think what we have is as much a conspiracy of ignorance as it is a conspiracy for control.

        Either way, it doesn’t look good.

        • The best actors are born under dire threat, remember that. He would say or do anything to keep his own life safe from prosecution.

      2. Does anyone  the experts to declare that “the experts haven’t a clue?”  I would ask the question, “If they know what needs to be done, why haven’t they done it and solved the problem?”

        I would tender the argument that nobody has a clue. All this posturing is about a slow economic death being preferable to a fast collapse of the economy. The masses need hope to counter mass panic.

        Mac is right. Bernanke carefully laid out the future. The question is, “Do we understand what he is communicating or are we slapping lipstick on the pig.” It is all about how the public interprets the scenario.  People do damn silly things when they are fear-driven. 
        Me? I’ll provide the lipstick. But I know it is a pig. From my perspective, I’ll take BS as BS, but I sure won’t tell the masses it is BS.  I don’t look forward to the end game. I need more time to prepare.

      3. Pitiful excuse for an interview…..CBS is clearly an arm of the ministry of propaganda.   And even with the soft ball questions, BenBoy looked like he could burst into tears at any second early in the spiel…..managed to pull himself together later.

        That said, gold and silver are up to new highs…..I wish Bernake would give an interview every day.

      4. You would think that since ’05 Bernanke would  be right on at least one or two things ACCIDENTALLY, but given his track record the smart money should definitely bet on runaway inflation. That being said, it is interesting that QE2 was only $600 billion – which really is just a drop in the bucket compared to the previous efforts to bail out the economy. I believe they will either raise the amounts before the 9 month time frame is up or they will continue right on with QE3,4,5, etc. until they reach the “ideal inflation level” according to them. The problem will then be trying to reel all that money back in when the dollar starts falling off a cliff.

      5. BB is the greatest actor in the world.  Give him an enima.

      6. I’m with overtheedge on this one… I’m not anywhere near finished preparing yet, so I’d sort of prefer the ruse to continue a bit longer.  I don’t think drawing it out a few more years or so will change the magnitude of the coming financial collapse, so keep some Ruby Red Lipstick handy for the porker while we continue to prep in the background.

      7. Guys I appreciate the posts here but I don’t see QE 2 as being relevent to a collapse because that money is not going to reach the masses. It is being supplied to member banks to strengthen their balance sheets to cover losses and let Big Business roll over their loans at a cheaper rate and be more profitable. If Big Business is in a stronger financial position, there is less risk to the member banks.

        Its just Bailout Number Two by another name.

      8. @ Mike in VA

        I sincerely hope that Santa is able to grant your Christmas Wish for additional time to get prepared. I don’t think that anyone is ever going to be as prepared as they would wish to be. There is probably always something else that you will wish you had stashed away and put back.

        I don’t know just how much additional time there is left to get ready. Silver > $30.00, gold > $1,400.00 and the Euro down to all time lows. Things really don’t look all that good for the ‘home-team’ (us).

        Prioritize your needs and do the best that you can; good luck.

      9. I’m 100% confident that he knows what he is doing………  Letting this go on will have greater damage and longer recovery to the working middle class.  Think they haven’t thought about that?  Watch him pull a rabbit out of the hat Rocky!

      10. Gotta respectfully disagree with Durango Kidd.

        The ultimate use of any QE1 or QE2 funds is irrelevant.  What you were referring to when you mentioned these funds will just get shuttled to a bank’s balance sheet is referred to as “the velocity of money.” 

        If we grant you your premise, then all that can be said is that the velocity of the QE2 funds is very slow…At some point though, those funds will make their way into the markets (asset markets, debt markets you name it).  It won’t sit on the sidelines forever.  Thus, inflation from those funds is ultimately a guarantee.

        However, of more importance is the worldwide POLITICAL ramifications of QE2.  The moment after this “brilliant” move was announced, our actions were unanimously denounced the world over.  Our debtors are furious, and there will be fallout.  Since that time, Russia & China are now openly disavowing the need for the USD, the IMF has made waves about the possibility of another reserve currency coming on the scene, etc etc..

        We are a bankrupt nation who unfortunately has painted ourselves into a corner.  We now need our debtors to stick it out with us, because we depend on their participation at the T-Bill/T-Bond window for $40-100 Billion injections.  Actions like QE2 will quickly drive them away from those auctions, and then what??

        The velocity of money (and its ramifications) is a secondary issue here.  Of primary concern is how long the world will “keep up the ruse” of our “Full Faith & Credit”…which everyone knows is nil.


        For those on a budget, fixed income–beans, ramen noodles, peanut butter…it can be done…but they have to want it.

        Therein lies the problem with most.

      12. What kind of peanut butter?

      13. The loss of confidence in the U.S. Dollar that QE2 could inflict globally would destroy the U.S. economy and turn the majority of American Citizens into paupers. The Federal Reserve Bank is putting the entire country at risk just to keep the system going a little longer. Giving a Central Bank control of the U.S. Monetary System may soon prove to be the biggest mistake in U.S. history. Thomas Jefferson warned us this would happen. If we survive this economic debacle as a nation we would be fools to allow this to happen again.
                                                E  PLURIBUS  UNUM

      14. Right.  Ben knows exactly what he’s doing.   And I have the flying monkey thing.  He must be flipping a coin.  No, cause then he would be right at least some of the time……..

      15. liar liar pants on fire… trust the fed ? no way .  fraud run wild   end the fed , audit prosecute . close them down. the national debt to the fed is wiped out. the private bank made the money the past 100 years , that was reward ehough… g sachs owns shars in the fed . close em down prosecuteComments…..

      16. Your Daddy: Additional funds being distributed by the FED to its member banks to support their balance sheet has nothing to do with the “velocity of money”.

        The velocity of money is how many times those dollars circulate in the economy within a given period of time.  These dollars are not going anywhere. They are not and will not be circulating. The major banks are awash with cash that they are not lending now to anyone away; except really big business, and really big business has just been rolling over its loans at a lower rate.

        This action strengthens the balance sheets of Big Business and mitigates the risk for theFED’s member banks and that what QE2 is all about: protecting the major member banks of the FED from loan losses and bad mortgage securities. Another ten million mortgage defaults are expected so expect QE3 as well.

        Will it increase inflation? Yes, eventually, because more dollars means they are worth less. This will translate into lower values for those nations holding dollars in reserve (which is everybody) and a loss of wealth for them. That’s why they are bitch’n. At the same time it makes THEIR currency worth more, which means demand from the US will decline when their products cost US more.

        So yes there will be some real inflation and a loaf of bread may double in price within a few years; ($1.25 to $2.50) all other things being equal and no SHTF, pole shift, or major quake in LA. But bread is not going to $11 a loaf, and coffee is not going to $77 per pound per NIA.

        For more reasonable and in depth economic analysis I would recommend SHTF America Economics Page, SHTF Economics Currency Page, and Bankster Gangsters: Bailout Number Two at SHTF Times.

        Your daddy, you will want to check out the “Tiger Woods Is Back!” article at SHTF Times also, I am sure!  :-) 

      17. The guy is in complete mental denial or lying. The self confidence is good, but when it’s total absurdity, there’s the danger. I’m more inclined to believe he’s lying & CBS is just a re-enforcement tool to access the masses.

        As the SHTF gets closer, one is going to be hard pressed to discern what is truthful and out-right BS being announced by these people.

      18. It’s official. This guy’s cheese has slid off it’s cracker. They assured us that the stimulus would keep unemployment below 9%, and now he’s 100% confident he can manage inflation…when it’s already here. The definition of insanity is doing the same thing over and over again, and expecting a different result. We keep pouring money on the fire, and things just get worse, how about STOP POURING MONEY ON THE FIRE?

        It’s just a thought…

      19. Search,,,,, Poll: Do You Believe in a Santa Claus Rally ? – CNBC ,,,.

        This move by Bernanke and the PTB is all about timing. They’re betting double or nothing during the holiday season.

      20. Thanks Bill.  The monkeys are throwing feces & something else.  He’s got higher orders.  Look behind the curtain.  Yes, he wood be wright .5 of the clock.  Re-read & add sarcasm.  I believe in u.

      21. this is just a show… to distract you from what they are preparing for… the country is bankrupt… the dollars reserve status is gone. america is only barely holding onto world dominance by threatening and bullying the other kiddies in the sandbox… russia and china don’t want war… but are preparing for war and moving troops into position… america is 64 trillion in debt! has no means to pay it off and borrows 45 % of every dollar it spends… that which it can’t borrow it buys itself… by printing more fake money… causing the value of your dollar to drop even more causing… causing the price for goods to go higher as the dollar is watered down… meaning eventually your all gonna be real picky what you eat and how much it costs real soon!

        america has no choice but to go to war… it’s the only solution and plays well into the nwo plans for world domination and control!

        world war 3 is the only way out… and they are obviously pushing for it!  

      22. Unemployment is rising because Obummer used the wrong economic stimulus strategy to attack it. He should have cut taxes across the board, froze federal hiring, and cut government spending. That is the correct receipe for a recovery.

        Instead, he raised taxes, increased federal hiring, and increased government spending: exactly the opposite of what he should have done. That’s why we have a bigger mess now than what we started with.

        Decades of research by Econ and Finance PHD candidates in every University in America shows exactly how to address a serious recession. This is not rocket science. The data is available to a second year econ major. You have to wonder WHO was giving hime advice: the Gang of Four probably; Geithner, Greenspan, Paulson, and Bernanke. NWO Bankster Gangsters ALL.

        The NWO Bankster Gangsters are looking to impoverish the American Middle Class, because that is whom they truly fear: US. Wait until those 30 million Illegals who have fanned out across the country start starving. They will climb the fences at the Bankster Gangster McMansions and burn them to the ground!

      23. Dr. Marc Faber, Jim Rogers and many other economists said everything Bernanke has done has been wrong. Also he has not kept his promises even those he made under oath.
        The dollar has recently LOST its value rapidly and WILL COLLAPSE with Q2, Q3….

      24. Would you like to drink milk which has been diluted with billions gallon of water???? 

        This essentially is what is happening to our dollars.  There are no jobs (since NO products are made in America) and with the coming hyperinflation, Bernanke and Dems are totally destroying the middle class.
        All creditors will get paid with worthless dollars = Each creditor will receive an empty big bag.

        But FRB (Bernanke) will be the only creditor around under the new currency.  Wow!!!


      25.  the Keynesians are running the asylum.  
        The post and discussion are missing major points.  What about:
        “We will not make the same mistakes Japan made” (in the 90’s that led to the “lost decade” by making incremental, experimental adjustments)? and,
        “We will not monetize the debt”?
        He’s doing both, after stating he’d do neither. 
        Continuing weakening and growing instability of the dollar  and a hamstrung U.S. economy (for many reasons, not just the $ weakness) might lead to sudden consequences.  Make your own conclusions.

      26. Send 30 million illegals home, jobs will open up for unemployed American citizens as they did in Phoenix AZ when 300 illegals were fired from Pro ranch markets and 300 citizens got jobs.

        Wages are a function of the demand and supply of labor. When 30 million illegals go home, wages will go up, Americans will have money to spend and they will: on cars, houses, and everything else.

        Send 30 million illegals home and the NWO will not be able to make them “New Americans” to vote us into the North American Union and dissolve America, and its Constitution!

        Send 30 million illegals home, crime will drop, drugs will slow, and food stamps and welfare checks will go away. There will be at least $300 billion dollars every year that they cost the American taxpayer that can be spent on health care and social security.

        Thats MY Dream Act make it yours!

      27. Bernanke is the Poster Boy for 40 years of mismanagement by our Presidents and Congress, ie Retards and Socialists, under the urging of wall street bankster gangster and lobbyists who have destroyed our economy. Now we and he are paying the price. That’s just the way it is.

        Under the circumstances Helicopter Ben is doing the right thing. When it comes times to repudiate the debt, the FED and the member banks can take it in the @$$.

        We can nationalize the banks, issue new money, eliminate all of the drug money and exchange old dollars for new ones with our Allies. And then sell new stock in the nationalized banks just like we did with GM. After all, its been American money that has provided our Allies with security and prosperity.


      28. No Thank you!

        Say NO To Socialist Healthcare
        Say NO To Socialist Cars (GM)
        Say NO To Nationalized Banks

      29. 1).  NEW WORLD ORDER: One world government and is run by the world’s wealthiest people. 

        The elites’ intention is to effect complete and total control over every human being on the planet.
        2).  COMMUNISM:  Government runs and owns everything, and dictates people’s lives.
        3). SOCIALISM:  Complete governmental control of industry, with a belief in government intervention. 

          FDR’s New Deal and the implementation of many social programs (Welfare, Social Security, GM, …)
        4).  CAPITALISM: Individual rights, Free markets, Open Competition and Privately owned, etc….


      30. My Dear Friends,
        Gold is clearly on its way to $1,650 and beyond. I have told you for many years that there was no PRACTICAL solution to the problems created by OTC derivative manufacturers and distributors namely our beloved “banksters.”
        By practical I meant a solution that itself would not cause more dislocations than the problem to which it was applied already has. Now you see political realities both in taxation and quantitative easing.
        Friends, there is no practical way out of this problem – none. We are going to inflate and spend as the entire Western world financial/political managers again try to kick the can further down the road.
        No further proof is required.  wrote by jim sinclair

      31. China interest rate hike imminent!  This has been a test of the National Broadcasting System.  If this was an actual emergency, you would be advised to bend over & kiss your ass while hiding underneath a 3rd grade school desk.  Tecroanin, I agree.  Why are they letting the gays come out of the closet?  A few good men.

      32. Comments…..The Ben Bernank is out of options, with the current
        set of politicians, he will print the USD into oblivion.
        External USD holders will pay the piper. External UST holders
        will share the burden.
        Timmah favors this outcome.
        S Palin is an idiot, The Bernank is not … .
        By the way, I`m 100% sure I`ll pour myself a tall one when
        the Bernank gives the next speech. Looking like a whore in
        the church …. , that`s the next show The Bernank is out for.
        Rather sooner than later … .

      33. Comments…..Says The Bernank:
        “…the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”
        – Ben Bernanke, November 21, 2002

        And the world says: thank you, can I have some more, please ?

      34. Over the Edge, they don’t want to solve the problem.  They know it can’t be fixed.  Too many derivatives. 

      35. The important point here is that Bernanke (along with many other “experts”) has been so bad at predicting recent economic developments that it is truly stunning that anyone even cares what he says at this point.

        Well, that is not exactly true – you can use his recent track record to generate the following conclusion based his comments in this interview:

        This is going to end very, very badly.

      36. Durango Kid, your Dream Act has some serious flaws to it and a number of unsupported assumptions. That’s all I’ve got to say about it, it would take far too much time for me to help set you straight. I would suggest you spend some time at

      37. Jane the banks will have to be nationalized eventually, and initially, to eliminate the FED. They can be recapitalized by issuing new stock to private investors, like GM.

        Clark: If My Dream Act has flaws to it I recommend that you annote them and provide YOUR analysis. I am sure it will be edifying to us all.

      38. quote  ” Anonymous
        Over the Edge, they don’t want to solve the problem.  They know it can’t be fixed.  Too many derivatives.” 

        You have no idea how right you are and how horribly wrong. Suffice to say, the problem will be resolved. The problem is NOT too many derivatives.

        The reason it continues is because nobody can identify the problem. The problem is obvious;  nobody is willing to accept paleo-economics.  All systems will revert to thier most natural state.

        Think about the collapse of the Roman Empire. Don’t confuse war, hedonism, rise of christianity and currency debasement as the cause, but rather as symptoms.

        Cryptic answer? You betcha. I’m not gonna try to convince anyone of anything. I just want folks to really think and figure it out for themselves. Sometimes the correct answer is the one we refuse to consider. But I give cryptic hints.

      39. OTE, do you know what a derivative is?  Do you realize how many (100’s) of trillions there are out there of worthless derivatives?  Who is going to pay for them?  You, I & many others in this world.  Many of us here are not confused at all.  Your answer is paleo-economics?  Fine.  Explain in “detail” being you are not going to convince anyone of anything.  Don’t try to convice us with such a quick answer.  Where did this war, hedonism, rise of christianity and currency debasement come from as a cause?  Don’t hint. 

      40. they know exactly how to get to were they want to be , a slow steady procress designed to hurt the middleclass and continue the decline of jobs and more economic and fiancial debt will be incurred. they are postitioning themsleves  as the people are pushed like cattle to and fro . ?they keep estending, QE2 , 3 and 4, more bailouts and soon to be in teh coming few years bailouts of States,when it gets to that point, All of our lives will have changed and tehstatndards of living will fall for most . they control the money, the food, the water,houseing, teaching and schools, churches, they dam near own it all .   Most people will  be guaranteed check to check  living as they pour on the inflation and taxes .the average sheeple pays out more than 40% in Taxes, includeing the Taxes ytou pay when you buy something .  Wait until this hits the 50 to 55% mark . Little johnny better get use to soda, hotdogs, chips, pizza and hamburgers, so it will give him diabetes and plug his heart later on in life . 

      41. I think that the Chinese need for us to buy all of their “crap” because, well, it’s that time of year and then maybe we’ll see the other shoe drop in January or February.  Hey, you think my kids would remember the year that their dad go them each a 50# bag of rice for Christmas?  We sure live in interesting times. 

      42. Paleo-economics:    x (ability) times y (labor) = z (wealth)
        z (wealth) – e (expenses) = n (net wealth)

        In the field of economics, this was interfamily/intribal commerce. Ancient history, totally obsolete. Interestingly enough, this is the same formula for survival. This is why one organism survives while another just a short distance away dies. Survival is all about efficiency and accessability to resources.

        Artificial systems can only survive by increasing entropy. Once the inputs end, the system will rapidly drop to it’s base level. Hopefully the artificial system was based upon something that worked.

        Our economic system is artificial. The increase is money injected into the system can’t maintain growth. We financed this injection. We attempted to game paleo-economics by creating wealth out of bits and bytes and  running a ponzi scheme. The citizens supported it by voting  themselves entitlements and works projects. The loans are gonna be called by refusing to roll them over.

        Result is SHTF. System reset. US de-coupled from what little world trade is left. Barter common. General mess.

        Good part is we return to an economic system that worked because we worked, traded and attempted to get along. It wasn’t and won’t be easy.

        I want to be wrong. Oh and the derivatives? What do you think a CDO is? It isn’t a piece of anything tangible. The CDS that brought down AIG, insurance is a derivative. The biggy, what do you suppose the Federal Reserve Note is? There is nothing tangible. It is all linked by paperwork and implied contract between the US Gov’t and a consortium of banking interests.  Then topped off with Treaties. Our economic system is based on paleo-economics that some special interest groups have gamed.

        Rome collapsed because once you were conquered, you were a citizen and gained entitlements. The supply lines reached the maximum possible extent. Internal growth stalled, entitlements increased. Game over.  Italy has attempted repeated resets, but they just can’t get away from that entitlement thingy.

        In paleo-economics, there are no entitlements. Contractual obligations, yes. You can’t game a system based entirely upon tangibles. Credit? Oh no. Every loan is well secured with tangibles. We are stuck with the above formula.

        We won’t regress far. Many manufactured goods will be left to scrounge until local repair and amnufacturing begins. It won’t be long before the country starts stitching together again. We will face a mess to the infrastructure. We will be effectively cut off from world trade without severe conditions; like we take payment for our wheat with worthless treasury notes. Look for many years of end-of-the-road economy. No growth. no variety of goods and they few available are limited in stock.
        But like I said, I sure hope I’m wrong.

      43. So, OTE.  What are you going to do about it?

      44. Does anyone else get the sense that this guy has some sort of “God-Complex” going on.  How can anyone state for certain that the have 100% control over anything.  He is not really to worried if his plan does not work because he is already one of the super wealthy in the world.  I don’t trust the guy one bit.  If a monetary collapse is immanent, it is because of people like this.  Idiots!!!!

      45. Bernanke is simply a sales person here.  He’s not going to tell you the car is a lemon and it’s going to fall apart.  He says “It’s got a new shiny bumper and the radio does work”.  We as the buyer have to be educated enough to figure it out for ourself or we end up buying the pig.  There’s no warranty and his guarantee doesn’t mean squat.  If it looks like a pig, if it acts like a pig and if it smells like a pig then it’s a pig.

      46. What am I going to do about it?
        Helicopter Ben hasn’t called me. I doubt he will. Nobody with any influence has asked me to “do something about it.” And to top it all off, I can’t see or even imagine any mechanism for a soft reboot.  So why ask me? All I understand is entropy and the paraphrased laws of thermodynamics.

        I have control of my own life; well just barely. What little disposable income I can muster goes towards supplies, tools, 19th & early 20th century technical books and low-tech repair/manufacturing skill development.

        I am going to live life, enjoy what simple pleasures I can and develop my network of survival-minded friends. In a changing environment, the trick to  survival and success is adaptability and opportunism.

        Generally speaking, the generalist always has the survival advantage. Within a specific environment, the specialist thrives. Homo Sapiens abhors change and typically always pursues specialization.

        Knowledge: from the word Knossus; to know. Knowledge is tested by application, ie.  the actual outcome matches the predicted outcome.

        Helicopter Ben and the kiddies believe in “Quantity Theory of Money” aka Keynesian Economics. A belief system can’t accept evidence contrary to the belief. The USA is saturated with myth and legend underneath a “California Overhaul.” The people want to believe in heroes to the point of manufacturing them as role-models. Strip the paint off and … . 

      47. You could tell from Bernanke’s shaky voice (on 60 minutes) he was more nervous than a boy scout lost on Brokeback Mountain.  What a pathetic, inept liar he is.  The Rothschilds may have to replace him soon. 

      48. High Ho Ron Paul.  Now that will be a soap opra!  Can’t wait for show #1.  There’s a new sheriff in town.  Economics 101 training.  I hope Ben has a note from the doctor.  He’s going to need it….

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