Sometimes I've gotten carried away with my newfound fascination with the money system in the United States, and the related question: can a modern economy actually be rescued from failure by printing currency? At its base, that's what Ben Bernanke & Co. are trying to do, or at least the rescue of the economy is the putative reason for "quantitative easing." In practice quantitative easing provides an advantage for those economic players who operate in closest proximity to the Federal Reserve money spigot, namely, the Primary Dealer community who enable the Fed to carry out its "open market" operations in asset "purchases." It's obvious where the bubbles have been blown: take a look at the New York Stock Exchange, the U.S. bond market, and the renaissance of the housing bubble. In other words, here we go again. In a sense, this money is "sequestered," sitting idly in Federal Reserve accounts of large financial institutions or as unrealized gains in equities and housing. It has not found its way into the general economy, and so inflation remains "muted," in one of The Bernank's favorite words.
If all that hallucinated money begins leaking into the general economy, in other words, if you and I begin to prosper along with JP Morgan Chase and the big housing speculators, then The Bernank will have to throw the machine into violent reverse to remove "excess liquidity" from the system. The contraption at that point may begin to vibrate and rattle, lurch from side to side, parts may start falling off, smoke may rise from the Marriner Eccles Building, and the entire system may go supernova. No one knows, because no central bank which has hypertrophied to the extent that The Bernank has overseen has ever attempted to "exit" from such a massive balance sheet.
Sometimes I'm convinced that what The Bernank is doing is overcompensating for his amazingly bad judgment in the period 2005 to 2007 concerning the housing bubble. The Bernank just couldn't see it, or he was attempting to wish it away. So now he's trying to bring back the era of sky-high housing prices and a raging stock market to "prove" that "the fundamentals of the American economy are strong," and that the American commoner can support such a market. The path he's chosen, however, simply further distorts the wealth disparities which have crippled the overall economy and made a mockery of our democracy. In short, he's making the rich richer and the poor poorer.
This is certainly one of the problems Tom Jefferson was talking about. The Bernank IS the Fed, and the Fed is a banking cartel which is essentially unfettered by democratic processes. All I know is that I saw the housing bubble as plain as day as early as 2004, and I think I can see how this process of money conjuration will also end.
Meanwhile, Senator Rand Paul of Kentucky stood his lonely vigil in the Senate, using a filibuster of John Brennan's nomination as an occasion to debate the constitutionality of President Obama's program of killing American "enemies of the State" without due process. This was an interesting conundrum for "liberal" Senate Democrats, and for the American liberal community generally. They needed a pigeon hole for this Tea Party usurper. What were Chris Matthews and Lawrence O'Donnell and Rachel Maddow supposed to say about Rand Paul? What about such champions of civil liberties as Senator Carl Levin?
The liberal media trope was to marginalize and ridicule Rand Paul. Sure, he had guts, sure he was right (in a way), but does he seriously think that President Barack Obama is going to order a drone strike against Senator Paul while he sits at an outdoor cafe in Washington, D.C., as Paul suggested in his utterly ludicrous hypothetical?
And thus you have the utter dumbing-down of American political discourse, the clear proof that the modern day practitioners of American democracy do not deserve the country that Thomas Jefferson, John Adams, George Washington, Benjamin Franklin and many others put their lives on the line to bequeath them. The idiotic argument against Paul proceeds from the premise that President Barack Obama will always be President, that we can rely on him always to do the right thing while he always remains President, and that the demons of Rand Paul's imagination are entirely fictitious. We can trust a system where the Executive has the unfettered right to imprison Americans without trial, or to execute them without bringing charges, or anything else the Executive cares to do, because the current occupant of the office is a nice guy, and we know he won't abuse this power. And such an attitude, after all, has always worked out in the past, wherever it was practiced.