Congress is a collective mess. Bills are routinely passed that neither House nor Senate members have read. Legislators return to their states proclaiming THEY are doing a good job. It's always the OTHER legislators or the OTHER party that is the root of all evil. When something occasionally goes right, individual legislators step into the spotlight and claim credit. When something goes wrong or is unpopular, those same legislators hide behind the collective shield called Congress. In other words, Congress is a dysfunctional team.
Click to Play Robert Ian's GoldSeek Radio Commentary Download mp3
In the real world, real leaders take responsibility when things go wrong and they share the credit with their team when things go right. Regardless of how dysfunctional congress is or how many improvements need to be made in both the people and the process, it is still their job to legislate.
That's why it should come as an affront to both congress and the voters when the chairman of the federal reserve essentially dictates to congress that it MUST cut spending AND raise taxes or else suffer the consequences of inflation (as if inflation was never a possibility until now). Never mind the trillions upon trillions of dollars Ben Bernanke has injected into the money system over the past 2 years to save 19 big banks and their counter parties at the expense of what will be thousands of smaller banks, businesses, municipalities, and millions of people. In other words: unlimited bailouts for the few at the expense of the many. And just like any good congressman, Bernanke will take credit for what he can, and will blame the group when things go wrong. Only this time the group he is setting up to take the blame, is congress itself.In recent testimony before the House Financial Services Committee, Ben Bernanke warned the U.S. could soon face a debt crisis like Greece. He told Congress the Central Bank will not help legislators by printing money to pay for ballooning federal debt. Never mind the fact he's been printing money for the past two years like it's going out of style (which it is). He said countries with unsustainable deficits like the United States are having increasing trouble selling their debt to investors. As a result, the U.S. is vulnerable to a sudden "reversal of fortunes" that would force taxpayers to pay higher interest rates on the debt.
That "sudden reversal of fortune" is apparently just around the corner and he is carefully setting up Congress to take the fall. He told Congress tough spending cuts and tax increases are needed to bring down deficits. If this does not occur (and he knows it will not), it will eventually force the Fed to accommodate deficits by printing money and buying Treasury bonds — effectively financing the deficit on behalf of Congress and spurring inflation in the process.
Now wait a minute... didn't he just speak out both sides of his mouth? Didn't he say he won't print money, and then didn't he say he will print money if Congress doesn't act? He knows full well Congress won't cut spending to the point of austerity, that would inhibit re-election campaigns. He also knows he's already been caught monetizing the debt. He's simply attempting to cover his tracks, make Congress look bad and provide one more supposed reason why Congress should not audit the Fed. I mean, if Congress can't keep their own house in order, what qualifies them to oversee the Fed? You can just see it coming.
The bottom line is that both the Fed and Congress are financial arsonists. They have both started the financial firestorm the average person is now engulfed in. Don't be fooled by the coming episode of "the blame game" as the Fed blames Congress and Congress blames the Fed while what remains of your home, your investments and your lifestyle burn to the ground in an inflationary inferno, unless of course you have gold.
