A Future of Severe Scarcity, by Benito Bernanke ~ The Risk Averse Alert

Monday, November 08, 2010

A Future of Severe Scarcity, by Benito Bernanke

They say, "If the shoe fits, wear it." The Fed apparently is perfectly fit for jackboots...

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Bernanke says consumers will dodge high commodity prices

JACKSONVILLE, Florida — Federal Reserve Chairman Ben Bernanke acknowledged Friday that emerging market growth had fueled commodity prices rises, but said most of the increases would not be passed on to US consumers.

Speaking at Jacksonville University, the Fed boss said that recent price rises in "soft" commodities -- such as cotton and sugar -- had bucked a trend of worryingly low price growth.

Speaking just days after the Fed's top policy body agreed to spend 600 billion dollars in a bid to spark economic growth, Bernanke admitted that the cost of some everyday items had increased.

Making an exception for energy costs, Bernanke said he did not expect prices to be passed on to consumers.

But, he added, "our research and our experience though suggest that, broadly speaking, when you have a situation like we have today, where there's a lot of slack in the economy, lot of excess supply, that is very very difficult for producers to push through those costs to the final consumer."

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Now, ask yourself, when producers find it "very, very difficult" to pass along costs to the final consumer, what happens?

They stop producing!

This is how hyperinflation creates severe shortages — scarcity.

Controlled disintegration plainly is the Fed's policy. This fascist Bernanke is saying so much. Shrinking the claimed "excess supply" is the game of his kind. Same old, same old "creative destruction." These people are out of their minds.

What QE2 reveals is that, collapse in commerce has not been happening fast enough for grossly over-leveraged pigs to steal for pennies on the dollar prized assets, so that in the process their leverage might be reduced (with further write-offs of worthless securities being counterbalanced by the addition of literally stolen goods).

Again, controlled disintegration is the intention behind the Fed's QE policy extending into both physical and financial realms.

One big problem is this desired shrinkage of "excess supply" necessarily targets foreign entities, and so ventures a regime of "shared sacrifice." Thus, too, trade war hastening a collapse in commerce is on the horizon. This, indeed, is the Fed's intention.

Of course, the general consensus is that, the Fed is acting to bolster securities markets. No one bothers wondering, though, which securities? MBS? Not a chance. No additional liquidity will amount to a hill of beans in a marketplace where confidence is sure to evaporate under the heat of fraud increasingly seeing the light of day.

Equities? In an environment where controlled disintegration of the physical and financial economy is assured by the Federal Reserve's intention toward what it calls "excess supply?" Get real, and do not confuse today's hedge fund circle jerk desperately manufacturing yield for a vote of confidence in securities-based finance.

Fast Money
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