Economy and Pussy Bernanke

So ole Bernanke has amazed me once again...this time because he sounds like the author of Revelations predicting the downfall of the credit system. His recent speech, I believe it was given yesterday, basically proves the countless problems with running an economy on credit and subsequently soft money. Here is a nice piece from his recent blabberings that actually make sense:

"Bank balance sheets have swollen further as a consequence of the sharp reduction in investor willingness to buy securitized credits, which has forced banks to retain a substantially higher share of previously committed and new loans in their own portfolios. Banks have also reported large losses, reflecting marked declines in the market prices of mortgages and other assets that they hold. Recently, deterioration in the financial condition of some bond insurers has led some commercial and investment banks to take further markdowns and has added to strains in the financial markets.”

Imagine all these things...the true cost of capital is going through the fekkin' roof, banks are not giving out new absurd loans because people cannot pay their bills (see rates of house and vehicle repos), this in turn is forcing banks to tighten up the credit issuing which will further slow down the artificial economy...so, what happens? The banks tighten up with their money and the economy heads to a halt.

Banks = beaten up over their subprime liabilities
housing = in the ceramic bowl
manufacturing = down
food and energy = up
unemployment = rising
consumer spending = shriveling like George after swimming in the ocean

At this point it seems that the Feds will continue to cut rates until they resemble the same situation that occurred in Japan. Bernanke will pray that eventually the rates will funnel some type of money into the people's pocket because he knows for sure that the government will not lower spending (see Reagan, Bush, Clinton and G.W. Bush's spending increases). I guess I should stop badgering Bernanke because at least he is being somewhat honest with the system and basically proving that it should have played into the credit system, instead working with some real, hard money that is actually worth something.

A final quote from the B-dawg (Bernanke) himself: "It is important to recognize that downside risks to growth remain, including the possibilities that the housing market or the labor market may deteriorate to an extent beyond that currently anticipated, or that credit conditions may tighten substantially further.”

Dane's interpretation: "The financial system may be headed for a heart attack and I am ready to shit my pants because all of the administrations since Woodrow Wilson are airing their dirty laundry on my watch. Please excuse me while I go write another piss poor text book ignoring the Austrian school of economic thought."

So, what does this mean? I don't know. Maybe I should move back home and get some cows ready for 198 Slater Road and get working on a sustainability plan...oh yes, I should probably buy some guns so people cannot steal food from my family. Just kidding, but really something should change or at least people could attempt to wake up for the better. Mistakes have been made, now all we can do is learn from these mistakes and move on.