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The Spurious Case of Benjamin Butthead
Just minutes before, on the same local talk-radio station, I'd been accosted by a similar ad from a different jeweler. And earlier on my drive home, one from a rare coin dealership. The gist of all of them was the same: If it's gold or silver, we want to buy it. All this talk of gold and silver flashed me back to a period in my life I've tried hard to forget: My early teenage years, when my well-meaning mother had been in the habit of dressing me "a typical public-school boy from a typical middle-class family" like Little Lord Fauntleroy. I'm not kidding. Instead of tennies and jeans and T-shirts with iron-on Kiss! decals, I had penny loafers, color-coordinated corduroys and oxford shirts. But this wasn't even the worst of it... My mother had a friend in the jewelry business, you see. And the lure of deeply discounted rings, watches and chains ensured that instead of baseball gloves, skateboards, fishing rods and other such pesky, needless boy-truck, my birthdays and Christmases saw me unwrapping enough gold to make King Tut roll over in his sarcophagus. By the time I was 14, I had not one, but TWO monogrammed gold pocket-watches. I had a gold monogram ring, too - an obscene hunk of metal even a Mob boss would consider ostentatious. Ever wonder where Mr. T got the idea for the 45 pounds of gold chains around his neck? From my middle-school class pictures, that's where. I still have a lot of this jewelry buried "along with the memories of being mercilessly taunted and bullied about it" deep in an oak chest somewhere in the basement. But all these "buy your gold" ads on the radio have got me thinking about that stash again... And wondering what these jewelers and coin-o-philes know that I don't. The Dollar's Impending Supernova In the interest of full disclosure, I'm not an economist, investing expert, financial analyst or any such thing... Unlike money-and-markets wizards Justice and Adam, my knowledge of how the whole dang economic opera works is relatively elementary. As you'll discover in the coming months, I'm basically a liberty and privacy fanatic who has learned just enough about our fiscal system to realize that it's heading toward collapse. No doubt like for many of you reading this, it has been a laborious and unpleasant process for me to ascertain what the Federal Reserve System actually does - and to begin to grasp how it, the U.S. Treasury, Congress, the President and other entities work together to manipulate America,s economy... But in just the last few months " between the bailouts of "too-big-to-fail" American financial (and other) institutions, the exploding budget deficit projections, and conflicting policy measures aimed at combating both inflation AND deflation " the combined purpose of these players has become clear to me: They're trying to inflate the U.S. dollar into oblivion. Don't ask me why they're intentionally causing this supernova of the buck. Maybe they plan to render it worthless so they can reinstitute the gold standard (fat chance). Maybe they're trying to reduce the relative weight of American debt held by foreign countries. Maybe it's a "New Cold War" plot to drive up costs and strangle American consumer spending power " thereby weakening factory-to-the-world China's economy... Or maybe they're all silent partners in jewelry and rare coin stores. Bottom line: When just about every single plan of action put forth and advocated by any of the main economic players in America uses as its centerpiece the printing of more money, it seems obvious to me that their real goal is to render that money worthless... I'm sure smarter folks than me may have a different take on this, but to a half-redneck rube like me, this seems the only logical explanation for what the various players in charge of the nation's money seem to be getting ready to do to our supply of it. And although many are the puppeteers in this fiscal farce, the front man seems to be Ben S. Bernanke, Chairman of the Federal Reserve System's Board of Governors... Something's Rotten in Benmark I've been trying for a while, and I can't seem to get a handle on Ben Bernanke. In my view - and again, I'm no economist - he's done so many seemingly contradictory things that I really have no idea what he stands for. And that's no way to be in a time of extreme economic uncertainty. My Taipan Publishing Group colleague Justice Litle believes that for the most part, Bernanke is basically stuck trying to clean up the mess his predecessor left him - somewhat like Obama after Bush. He calls BB the "poor, sad schmuck with the broom behind the elephant..." And he's right, of course. Alan Greenspan is the real architect of this crisis, as far as I can tell. But I think Benjamin Butthead is making it worse by both his policies and his lack of leadership. Here are just a few examples of what I mean: A cornerstone of his view for economic recovery continues to be the infusion of huge amounts of cash into a banking system that has shown a propensity to mismanage it, or not account for it at all. In a London speech just days ago, BB renewed his assertion that recovery hinges on to a plan to "...further stabilize and strengthen the financial system." In other words, give more money to the banks. However... Bernanke has sung this siren song with conviction before, when he and Treasury Secretary Henry Paulson were selling Congress on the need for TARP. Yet the linguine-spined Fed Chairman didn't make a squeak when Paulson then changed the plan from buying up "troubled assets" for future collection or sale on the open market (which was a crappy plan) to buying actual stock in these firms, pseudo-nationalizing them, à la Engels/Marx (a crappy, un-American plan). Further... Doormat Bernanke hasn't made a peep about the fact that half of the $700 billion earmarked for TARP relief has disappeared into the dark corners of the recipient banks, balance sheets without even the most rudimentary accounting of it. As Fed Chair and significant architect/proponent of TARP, Bernanke's in prime position to shine a powerful light on these banks, shady practices. But instead, he blew a huge opportunity to hedge the success of his own shaky plan by forcing banks, accountability through threatened exposure " something the American people are entitled to in exchange for their TARP-spent tax-dollars... Bernanke is on record advocating the printing of virtually unlimited numbers of U.S. dollars to stave off deflation (which is completely natural to a free market, by the way) " and now, to "pay" for the almost-unfathomable expansion of the national debt the Bush administration has presided over, and that the Obama administration will likely have no choice by but to expand. This would be easier to swallow if the U.S. government still borrowed the bulk of its operating capital from its citizens, via bonds. However, in recent years, it has largely been foreign countries who have shelled out to support American out-of-control consumption. The unlimited printing of money says to these foreign investors in U.S. treasuries: Your money, when converted into U.S. dollars, is no longer an appreciating asset. These are just a few from the stacks of axes I have to grind with Mr. Bernanke. Even as stupid as I am compared to real economic analysts, I could write several thousand more words on the spurious case of Benjamin Butthead... Which brings me to another worrisome point: If even a half-redneck Neanderthal like me can self-educate enough to decipher between six-packs that our country's monetary policy is horribly wrong and accelerating us toward fiscal oblivion, why can't Congress, the President, the Treasury Secretary and the Fed Chairman figure it out? More lucrative than FOREX, and a heck of a lot safer The truth is that they know damn well where we're headed. But none of them has the sand of a Paul Volcker or David Walker or Ronald Reagan to level with the American people " and do the hard, right thing for the salvation of future generations... It's a giant game of fiscal "musical chairs" that transcends party politics: Bush, Bernanke, Obama, Paulson (and soon, Geithner), Clinton, Reid, Pelosi, Frank and the rest of the new Congressional leadership seem perfectly happy to let our economy's funeral dirge play until the last note " gambling with your future that they won't be the one left standing. And if they are, they'll count on the slickness of their spin doctors to blame someone else, and the fiscal ignorance of average Americans to make them buy into it. Mother Knew Best In a nutshell, my gripe with Ben Bernanke " one of the most accomplished and qualified economists in the world " is his lack of resolve in telling the truth about the U.S. economy. It's not like he has anything to angle for, either. His appointment to the Board of Governors of the Federal Reserve doesn't expire until 2020, and his Chairmanship is effective through 2010... Bernanke's spinelessness in one of the most incredibly influential bully pulpits on the planet " a forum he could easily use to cut through party politics and salvage the free-market ideal that made America great " is infuriating. He holds within his power a cure, albeit a bitter-tasting one, for economic cancer, yet he does nothing but cover up its symptoms with sugary interest-rate cuts and a flood of free money. Bottom line: America's financial system used to be relatively easy for the average American to understand... His money was backed by something real, and the job of central bankers was simply to ensure that the cash in his wallet was actually worth its equivalent in hard assets " and perhaps, occasionally, to issue loans at an appropriate rate to legitimate business interests with sound track records and the ability and obligation to repay. But now that our government has made the monetary system so convoluted that it's nearly impossible to understand " so complicated, in fact, that those who are supposed to know it backward and forward can't even agree on how to run it " we've been forced by necessity to deify and take as the gospel the words of "financial Rasputins" like Alan Greenspan and Ben Bernanke... And I say that this godlike position (especially since it's not an elected post) carries with it an obligation to the truth, no matter what its cost. But that truth will never come from the likes of Benjamin Butthead. Some smart people are starting to realize it, too. Like jewelers and coin dealers. Gold investors, that sort of thing. People like my mother... In fact, I think I'm going to call good ol, Mom and thank her for staking me long ago with a healthy stash of the only real money in existence. And it only cost me a few black eyes and some time in the principal's office. Like every single recess period... But who can remember all that, huh? Introductory greetings, Jim Amrhein |
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"What is going on here?" I said aloud this afternoon, cranking the radio knob to high volume as I jounced and jangled along a sylvan country road in my Jeep Wrangler, a sadistic conveyance that keeps my chiropractor perennially in silk. It was another ad from a jewelry store, clamoring for my gold and silver trinkets...