Ben Bernanke's Theme Song

Debaser.

What Bernanke listens to every night before going to bed.

Pixies Live - Debaser

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Photos of Bernanke as a teenager growing up in South Carolina:

• Time Magazine Slideshow - Young Bernanke

Comments

[DailyBail]

Who Is Winning The Race To Debase?

http://www.zerohedge.com/news/2012-10-05/who-winning-race-debase

For nearly 30 years, two of the world's largest economic nations (China and the US) have continually debauched debased the purchasing power of their currency. For the last 12 years, the rest of the world joined in. So who is winning the race to debase now? It appears globalization was really all about currency debasement and exporting inflation (i.e. loss of FX value) with debt being the inflation buffer (i.e. borrow to afford or vendor-financing - see AMZN). The problem now is the entire world is saturated with debt and so there is no-one left to export inflation to anymore.

[john]

DB, a quick question about debasing (in general terms). When a currency is debased, what happens to the original amount of debt owed?

[DailyBail]

Debasing a currency by definition weakens it. So it takes more dollars to buy the same basket of good and services as before the debasement.

And the amount of debt doesn't change. If you have a $16 trillion debt, it will still be a $16 trillion debt after the currency is debased or weakend, or as Bernanke hopes, after creating some inflation.

[SKINFLINT]

Bernanke is actually an insult to the Pixies.

[SKINFLINT]

DB. The ultimate in inflation would be what we did to South America during the 70s and 80s wouldn't it? I mean Volcker jumped the interest rates here and since our currency was THE currency, this shocked their currencies and caused massive inflation and debt which essentially crippled their economies. The governments in the cone of South America basically stole the savings of the citizenry and broke the back of the middle classes down there which by and large have not recovered and the countries are run by the oligarchs at the present time. Correct me if I am wrong or add details. Thanks.

[DailyBail]

Skin

As you know the reason Volcker raised rates so dramatically was to stop massive inflation in the US. It was running above 10% annually in the late 70s. So I would assume that there was also similar inflation in South America BEFORE Volcker stepped in.

Regarding the South American middle class - It didn't exist back then. In virtually every country, there was a wealthy elite, and then everyone else. They couldn't handle the shock of Volcker jacking interest rates up above 20%. This was not a surprise. It was a shock to our own economy. DEMS were absolutely freaking out. Calling Volcker a madman, an evil warlord, even though Carter had appointed Volcker, not Reagan.

Volcker was a Democrat.

http://en.wikipedia.org/wiki/Paul_Volcker

[DailyBail]

From the Wikipedia link above.

Paul Volcker, a Democrat, was appointed Chairman of the Board of Governors for the Federal Reserve System in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan.

Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.

Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well.

Volcker's Fed elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of the high interest rates on the construction and farming sectors, culminating in indebted farmers driving their tractors onto C Street NW and blockading the Eccles Building.

Congressman Ron Paul, well known as a harsh critic of the Federal Reserve, has offered qualified praise of Volcker:

Being in Congress in the late 1970s and early 1980s and serving on the House Banking Committee, I met and got to question several Federal Reserve chairmen: Arthur Burns, G. William Miller and Paul Volcker. Of the three, I had the most interaction with Volcker. He was more personable and smarter than the others, including the more recent board chairmen Alan Greenspan and Ben Bernanke.[15]

[SKINFLINT]

I seem to remember South America getting hard hit with interest ratea when they financed major infrastructure projects. This through the world band and the IMF. Also I thought Brazil, Argentina, Chile had fairly advanced economies with at least a nascent middle class that was pretty much wiped out at the time. Maybe I have my facts wrong, I will have to check. Thanks. PS I can't get the Ron Paul vid to my email so that I can blast it out to all my friends. Didn't know if this was a hangover form the storm. Thanks.

[DailyBail]

I seem to remember South America getting hard hit with interest rates when they financed major infrastructure projects. This through the world bank and the IMF. Also I thought Brazil, Argentina, Chile had fairly advanced economies with at least a nascent middle class that was pretty much wiped out at the time.

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Certainly, after rates were jacked up it hurt anyone who needed to finance anything. I'm not an expert on this stuff by any means. I remember there was a debt crisis in several countries. The Brady Plan i think for Mexico. All the large moneyceter banks in the US were insolvent from loans they had made to the region. It was a bad time.

As for the nascent middle class in a few countries, you're right. I was just speaking in general terms that 30 years ago there wasn't much of middle class in the region.

[DailyBail]

Memo to Central Banks: You’re debasing more than our currency

John Mauldin | Oct 26, 2012

http://financialandeconews.blogspot.com/2012/10/memo-to-central-banks-youre-debasing.html