Zero Hedge
Submitted by Tyler Durden
11/03/2010 20:51 -0500
In other words, the bulk of America has nothing to look forward to except encroaching poverty, and retirement fund balances substantiated by nothing than fraudulent, FASB-endorsed, stock valuations.
So much for the Fed’s two mythical mandates of promoting “maximum employment” and maintaining “price stability.” First, we had Bernanke’s predecessor Greenspan confirming in late July on Meet the Press what everyone knows: namely that the primary goal of the Fed is merely to encourage higher stock prices: “if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here.” And now, courtesy of an Op-Ed by the current chairman, we get confirmation, again, just three months later, from the current chairman, that the Fed cares mostly about stimulating high stock prices, solely to create the completely artificial illusion of “wealth” for the few, the proud, the shareholders, and the banking oligarchy.
Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
See, the thing is Bernanke is absolutely right… when it comes to a few hundred thousand “consumers” (out of over 330 million). One group of Americans whose wealth is tied into the equity value of any given company, typically insiders, are more than happy to take advantage of this massive surge in artificial stock valuations. This last week for example they took over 660 million advantages worth. We repeatedly demonstrate that the ratio of insider selling to buying is now beyond grotesque. In the past week alone it hit over 400 (and was over 2,300 a few weeks ago) – see chart at bottom of post. So yes, those for whom Bernanke’s “easing” is working, are taking advantage of it. As for the other group of beneficiaries, the ones who are going to receive over $100 billion in bonuses this year, well: they already literally own Bernanke, so we are not too worried about them either.
SEE ALSO: Quantitative Easing During Mid 1930s Appears to Have Been Successful
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Tags: Ben Bernake, Economy, Federal Reserve, Media, News Item
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