Forget Uncle Sam _ We Have Uncle Ben

No, not that Uncle Ben. This Uncle Ben doesn’t deal in rice. This Uncle Ben deals in fiat money.  I’m talking about the Chairman of the Federal Reserve, Ben Bernanke.

Ben Bernanke is arguably the most powerful man in the world. And he answers to no one.

Having one man control the money supply of 311 million Americans is itself a fantastic and unreal notion. When you then consider the effects of the U.S. Dollar on the remaining 6.6 billion people on this planet, the idea becomes unimaginable.

[…]

Chairman Bernanke only indirectly answers to the President. He can be impeached for a crime, but not for incompetence. The President appoints the Chairman, but once confirmed neither the Federal Reserve Chairman nor the Federal Reserve Governors can be removed for their policy views. So, like a union worker, the Federal Open Market Committee (FOMC) can’t be fired. All the Chairman has to do to get reappointed is help get the President reelected.

The above quotes were taken from an American Spectator article written by Victor Sperandeo.

Politicians, including Mitt Romney, and others like to claim that the US is now owned by China. That is a bit of an exaggeration. There is an excellent article, although over a year old, at the Guardian that explains who holds America’s debt. It has some great interactive graphs. This article includes a table of all the foreign held US debt (Bonds). The total comes to less than 5.5 trillion dollars. China¡s share is about 1.5 trillion and Japan is close behind. China is actually divesting their US debt slowly; but our bankrupt friend, Japan, is picking up the slack.  If this trend continues, Japan will once again be our largest foreign creditor. Clearly then, the vast majority of our national debt is held by Americans through money market funds, or pension funds, or directly by our senior citizens, and to a very large extent by our friendly Federal Reserve Bank. I can’t find my source but some estimates are the Uncle Ben has for the last few years been buying between 60% and 70% of Uncle Sam’s borrowing.  Isn’t that nice? Uncle Ben is financing that spendthrift, Uncle Sam.

Playing Monopoly

It is not hard to imagine that when Ben Bernanke was a boy, he liked to play Monopoly. So, let¡s have some fun with that.

I imagine that Ben had some close friends who were, like him, very good players of Monopoly. One day he tells those friends that he is planning to play Monopoly with three suckers and he is going to clean them out. His friends have a great idea. They each give Ben all of their Monopoly money telling him to put it in his pockets and use it like counterfeit Monopoly money. This way he will be sure to win all the suckers Monopoly money. And, that is what Ben does. When his stash from the game runs low, he magically finds he has more and when the suckers need to borrow, well Ben is more than happy to oblige. In the end, Ben goes home with everybody’s Monopoly money. Of course he has to pay back his friends with interest.

So, is this how the world’s fiat money systems work in the real life? I actually think it is a pretty close analogy. How is it possible that a country more broke than we are, Japan, can help finance our debt? It makes no sense, does it? However, I am sure it makes perfect sense to the bankers who own all the central banks. They eventually end up with all the money.

But, let’s get back to our Uncle Ben. Under Bernanke, the Federal Reserve is now the biggest financer of our government’s unending thirst to spend, spend, spend. But, that is not all Uncle Ben is doing for us.

Uncle Ben Finances Nearly All Home Sales In America

From this American Thinker article

s of September 2008, Fannie and Freddie guaranteed roughly $3.5 trillion worth of mortgage-backed securities.  The present figure must be significantly higher, because the GSEs, along with Ginnie Mae and the Federal Housing Administration, have purchased or guaranteed nearly every mortgage issued in the United States since late 2008 when the GSEs went into conservatorship.  These agencies backed “nearly 97% of U.S. mortgages in 2009,” “96.5% of all newly originated mortgages” in the first quarter of 2010, and “nine out of every ten home loans” in 2012.

This is an eye-opening article. The author warns that potentially the US taxpayers could be on the hook for as much as five trillion dollars.

So, our Uncle Ben may well be the most powerful man in the world. In my opinion, he may also be the most evil and dangerous man in the world. I wonder what the writers of history will have to say about Ben Bernanke? Will his legacy be that he single-handedly destroyed the greatest economy the world has ever known?

Well, now you know what I’m thinking. What are your thoughts?

21 thoughts on “Forget Uncle Sam _ We Have Uncle Ben

  1. Where’s Godzilla when you need him?

    Yes, we are royally screwed. I supposed giving the Fed chairman a degree of independence was supposed to keep him immune from political interference. But the downside of that is you just can’t get rid of the man.

  2. In my March piece, “The Coming Triple Pronged Attack on the Nation”, I exposed the dangers of the Bernanke’s monetarist expansion (and that was before QE3, of course). I also pointed out that it was Japan and not China the biggest holder of our debt. I explained why Japan can survive the fact that it is the most indebted industrialized nation in the world (save Zimbabwe, which doesn’t count) with a debt of 208% to its GDP. We have today public debt at 70% and total debt, including regional debt, at 110%.

    Japan’s internal and external fundamentals explain why they can; and why we probably cannot. Too long for a “comment” here.
    If you are interested here is the link to the piece,
    http://www.robbingamerica.blogspot.com/2012/03/coming-triple-pronged-attack-on-nation.html

    The danger we are facing is not when China is going to stop buying our debt (in fact they already have), but when Japan and our own American private investors going to stop.

    1. Bernanke is a realpiece of work, isn’t he? He is practicallly financing our goverment deficits and most mortgages in America, why doesn’t he just go all the way and have the Fed buy up all our soverign debt, buy Califorinia and the Illinois debts and… oh hell why doesn’t he just finance the whole world and everything would be just fine. Or, maybe it wouldn’t be….

  3. Infidel speaks wisdom, “Where’s Godzilla when you need him? …Yes, we are royally screwed”

    Jim is on the money with this post, as usual. My observation is that neither China or Japan will try to screw us. If they do, they screw themselves. After all, we still have potential, although potential is hard to evaluate.

    This brings to mind the story about the frog and the scorpion, both of whom were stranded in a tree in the middle of a raging flood. As the frog prepared to jump in the water, and swim to safety, the scorpion begged to be carried to safety on the back of the frog. The frog objected saying, “If I let you ride my back, you will sting me and kill me”. The scorpion replied, ” Don’t be silly. Why would I do that because if you die, I will drown”.

    The frog was somewhat mollified, and finally agreed to carry the scorpion to safety. While swimming in the flood waters, sure enough, the scorpion stung the frog in his back. The frog, startled, said, “Why did you do that? Now we both will die!”

    The scorpions response was, “That’s the kind of SOB I am.”

    China and Japan are somewhat like the scorpion,but are not stupid enough to screw us. At the worst, they will stop buying our debt, but what else can they do with all that fiat money they are sucking up by selling us all those goods?

  4. Pretty scarey when you really think about it. Except for any tangible goods you may own, including real estate, everything made of paper–money, stocks & bonds–is nothing but play money.

  5. My American History teacher in high school told us that the most powerful man in the world, was not the presdient, but the Chairman of the Federal Reserve.

    Today at co-op I got to tell the kids that the Fed Chairman really doesn’t answer to anyone, which is a problem since our government gets screwed up with out checks and balances.

    Remember who set up this system: Nelson Aldrich, Paul Warburg, John D. Rockefeller, Benjamin Strong (JP Morgan) and the rest of gang set this thing up for their profit and benefit. And boy howdy did it work for them! Is it foolish, or is profitable for somebody? When it all goes to pieces, guess who’s going to buy everything back up? The usual suspects.

  6. The leftist’s, the Independent’s, and the undecided can now easily make up their minds. After yesterdays hearing, there shouldn’t be any doubt in anyone’s mind that this bunch of filthy lairs are in over their hears and can not even get their lying Cover-Up story together. They themselves state that they had evidence that the State Dept. knew of the threat and still they did nothing. The disgusting Democrats have made a political game over the death of 4 Americans to protect their dishonorable president and Madam Sec. of State while honorable people have died because of them. Madam Sec. of State should either step down or be thrown out of office she is in way over her head, just like her boss is. How can they look the American public in the face after what they did! And they still call Nixon names for what he did. What he did was small potatoes compared to being responsible for the murder of 4 loyal Americans who died for their country.
    And these are the people who making American policies, and want us to vote for them? Are they kidding. And where was Hillary during those hearings? Why did she send her assistant there instead of her being there? Does she know something we don’t know, and was afraid that she would be forced to tell the truth ?

  7. Romney is a Keynesian cultist, corporatist, and fan of “The Bernank.” Goldman is shoveling money at him like they did/do Obama.

    Electing Romney is nothing more than rearranging the deck chairs as the ship rapidly sinks … rearranged into a pattern, however false, that provides credence to the notion that freedom was to blame for the fall and only a more powerful government can save us.

    Romney has a track record – a very Big Government track record – so you know what he will do. He shares this abominable record with his father (a guy conservatives hated more than they currently hate Obama). Hitching the conservative movement (and its professed ideals) to his wagon will cause serious and irreparable damage to both the movement and what is left of our liberty. History matters. Rhetoric does not. Again, Romney’s track record tells you exactly how he will govern – socialism, crony bailouts via money printing, gun control, etc. Once these things are linked to those who profess liberty and freedom, it is liberty and freedom that will get the blame when Romney’s Big Government “solutions” fail. And they will fail.

    Think long-term. Conservatives supporting Romney is a recipe for certain disaster. Are you willing to bury the movement in order to simply elect a statist with an ‘R’ on his lapel?

    1. CL, why is so hard for libertarians to see that true conservatives do mot see Romney as a savior but as a much better choice than Obama. The Libertarian Party continues to think if can change America from the top down. You all would be much berrer off using the money you are spending on presidential candidate Gary Johnson on trying to elect libertarians to city, county, and stae offices, and then to the House and the Senate. Then you might have a chance of changing the path America is on. Meanwhile some of us will keep trying to reform the Republican Party.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s