From Elliott Wave International:
When the financial markets and economy turned south in 2007, many crazy things followed. What's ironic is how much of the craziness came from a place that's supposed to be a source of stability: The Federal Reserve.
The Fed did everything in its power (and then some) to "bail out" the economy -- QE1 and QE2 came after steps like low or zero-interest loans to banks in exchange for worthless collateral... and after the purchase of foreign government debt via dollar swaps with foreign countries.
Many people say the central bank overstepped its bounds, but in fact the Fed's extreme actions were downright predictable. In 2002 Ben Bernanke gave a speech about fighting deflation, and said that if necessary the Fed would get the public to spend with a "helicopter drop" of money (the media dubbed him "Helicopter Ben").
As the Fed's role grew more visible and its critics more vocal, Chairman Bernanke began to act like a politician who hopes to "manage" the public. He's given more speeches, done more TV interviews, and even held a couple of press conferences. He uses words like "transparent."
Yet the first half of 2011 has clearly shown that the economy is not "recovering." And when stocks were mostly down in May and June, a rash of anti-Fed headlines followed. Bernanke's job approval fell to a new low.
Even so, to say that "a feeble economy hurts the Fed's image" is to state the obvious. There's a deeper reason the public is turning against the central bank. And if anything, Bernanke's attempts to "manage" perceptions will only make it worse.
Here's why: The Federal Reserve's mission is to create an illusion. Its tool-in-trade is an endless supply of fiat money, which it uses to promote staggering amounts of credit and debt. In this effort the Fed has succeeded: It made easy credit as American as blue jeans.
But, can an institution that depends on illusion...
...Also become "transparent"?
The question answers itself. A campaign of transparency puts the Fed at odds with its own mission. For almost a century, the Fed dictated monetary policy from behind the curtain, as any real conjurer must. I need not explain why the curtain has to remain in place, or what happens when it falls.
It's no accident that the public is starting to see the Federal Reserve for what it is, namely one element of a much broader recognition that accompanies risk rejection on a massive scale. Risk rejection is at work in the implosion of sovereign debt, the dissolution of the European Union, good money market funds gone bad, and more.
Comments:
Bernanke the wizard of the Federal Reserve is probably starting to feel desperate at this point.
The economy is not rebounding despite pouring massive helicopter loads of cash into the banking system through QE1 and QE2.
What is the solution?
Based on our profile for the Bernank, the problem must be that the QE schemes he dreamed up were simply not large enough.
Combine this with Obama's re-election campaign that will start this fall and his need to get the unemployment numbers down, we have a recipe for QE3. Though it is unlikely to be called this, because the NWO does want to manage perceptions.
Perhaps the new stimulus/QE package could be called EMP1 (Employ More People 1). And as the initials imply, it could have the effect of blowing the economy at some point to smithereens.
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