The primary reason Bernanke claims to be engaging in QE at all is to keep interest rates low to sustain the housing market (and allegedly help the economy).

However, even a cursory look at the situation shows he is either lying or somehow manages to monitor the US monetary system WITHOUT actually ever look at price levels. Either one of those options is enough to give you a chill… and illustrate beyond doubt that he is unqualified for the position he holds.

Indeed, were Bailout Ben to bother opening a stockcharts account or looking at Yahoo! Finance occasionally, he’d see that Treasuries actually have FALLEN (pushing interest rates higher) whenever he announced a QE program.

As you can see, back in March 2009, when the first QE program was announced, long-term US debt traded at 130. When QE 1 was announced, long-term US debt levels FELL (pushing interest rates higher), they then traded in a range from 115-122 until April 2010 when QE 1 ended.

The same thing happened with the announced of QE lite and QE 2. Indeed, the only time that Treasuries actually RALLIED (lowering long-term interest rates) was from April-August 2010: the ONLY time that the Fed hasn’t maintained a public QE program in the last 18 months.

Again, how on earth does no one in Congress or elsewhere call Bernanke on this? It’s obvious to ANYONE who bothers looking at US Treasuries that QE fall whenever Bernanke implements QE. Is it really possible that NO ONE in a position of power actually bothers checking on this stuff? I mean, if we’re going to allow the guy to throw TRILLIONS of Dollars around, surely someone should bother engaging in minor fact checking like… or I don’t know, seeing if his claims are actually even VALID.

The same goes for his and president of the Federal Reserve Bank of New York William Dudley claims that QE will help the US unemployment situation. Even according to the BLS’s ridiculous numbers, the unemployment rate when QE 1 started was 8.5% with 13.2 million unemployment, compared to today’s rate of 9.6% with 14.8 million unemployed.

How on earth can anyone with a working brain claim that the $1.25+ trillion we’ve already spent on QE was helpful to employment when both the RATE and the actual NUMBER of unemployed Americans have risen dramatically since QE was first implemented?

In plain terms, the only way Bernanke’s claims regarding QE’s success are valid is if you present the argument that both interest rates and unemployment would have been a whole lot worse without QE. That’s a pretty piss poor argument for spending nearly $2 trillion.

After all, if you’re going to resort to abstractions when it comes to justifying spending INSANE amounts of money, there’s literally no end to the craziness you can come up with. According to this logic, the Fed could literally print $2 trillion and give it to Wall Street and claim that it helped the economy when it fact it did nothing but return Wall Street bonuses to 2007 levels.

Oh wait… it already did that.

Good Investing!



Graham Summers

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