Impending Perils of Bubblicious Bernake?

Just as your dentist warned you to stay away from those sugary foods. I’ll also contend they more than likely said if there’s only one thing that you can go without, “Stay away from the bubble gum!” This is analogous to the free money being printed by the Federal Reserve. And it has the same consequences for the economy at large as the bubble gum has on ones teeth. Eventually, the pain will come from the degradation, and the expense needed to repair the damage will be frightening.

As I write this article we are now involved in 3 conflicts (we haven’t declared war since WWII even though we put our treasure in harm’s way which to me is unconscionable) the Middle East is basically on fire, riots, protests, bombings, and too many others to list. Sovereign Debt issues such as Portugal, Ireland, Greece, Spain, and others have once again reared their ugly head. US economic data is coming in much lower than the analysts predicted. ( who’d a thunk it!) Japan has experienced one of the worst disasters in their history. Nuclear contamination issues abound, thousands dead, untold suffering in this the worlds 3rd largest economy and number 2 holder of US debt. All this happening at the same time, and that’s only a partial list. So guess what? The stock market is bouncing back up once again flirting with even higher prices! Sorry folks, but somethings wrong with this picture, and anyone with any common sense knows why. It’s called manipulation pure and simple. Its when free money as in the case being supplied by the Federal Reserve for the banks to purchase equities, so that in the words of the Fed. chairman it “produces a wealth effect” All I’ll say is, you had better make sure you have good insurance, because not if, but when the so-called “effect” wears off, there’s going to be quite the doctor bill. And who or how that gets paid is another problem!

Here’s a great comparison of what I call the “manipulation” effect being played. Everyone is just enthralled with how China is growing, Every talking head will tell you how, its China, China, China that will help grow the US out of the doldrums. I still argue it’s all hogwash. It’s all smoke and mirrors. And I also contend the now famous Fed. Chairman Ben Bernanke will end up at some point more infamous for his manipulations in the economy than his predecessor Mr. Greenspan. It’s only a matter of time.

To give some credence to my assertions I’m posting a link to a Dateline video that aired in Australia this week. You wont see objective financial reporting like this anywhere in the US at this present time. Everyone here is on the Koolaid train and it’s just as dangerous as the bubblegum express. If you think you have a true understanding of the China story, just watch this short presentation.

If after watching you don’t get a little bit of a tingle in your teeth, just keep chewing is all I can say.



© 2011 Mark St.Cyr  All Rights Reserved