If I have $1M and I can decide between two options
a) tomorrow my money is worth $2M
b) tomorrow my money is worth $500k
Which option would you choose? These bankers are human beings. They are naturally and understandably biased. Not only are they making these decisions for themselves, but they are making them for all their friends, family, and business associates -- all of whom are also millionaires and billionaires.
I don't see it as much a conspiracy theory as an understanding of human nature.
Originally, the fed was created by a secret committee of bankers on a remote island. It was rushed through congress quietly -- I know, because I read the decades old NY Times article covering the legislation at the Will Rogers Museum.
Then, if you watch the recent Moore film, you'll see that the current bail out was voted down in congress, then secret meetings led by many of these bankers, GS and the like, prompted a revote and they rushed it through again -- when it passed.
What Aaron said is pretty accurate. The bankers aren't looking out for main street and the jobs won't be back for a while.
I've been trying to sell a house now for almost a year and many people want it and none of them can get a loan -- they've tried. They have jobs. They have income and the ability to repay the loan, but the banks just aren't giving out any money. Contrast that to 4 years ago when you didn't even have to have a job at all or verify income to get a million dollar loan -- I know, because it was my job to build information systems to help the subprime match makers connect home buyers with the banks who wanted to give them the loans.
When I realized how dirty it all was -- I quit and started my own company and I'm very glad I did.
a) His $1 million earns ~3% interest and depreciates by 2% per year, or
b) His $1 million earns ~4% interest and depreciates by 3% per year.
You're arguing that these guys are promoting multi-trillion dollar swings in the country's wealth in order to earn a couple more basis points on their investments. If you're going to posit a Greedy Ben Bernanke, why is he being so slow and cautious? He can probably make, at most, 1% per year extra by manipulating the value of the dollar. Or he could take a suitcase full of cash.
Additionally, he probably doesn't even know which choice will make him money.
Most likely his money is managed in a blind trust, which means he has no control or knowledge over how it is invested. For all he knows, inflation will help his portfolio. In the most likely event, his money is invested in a mix of equities, stable funds and bonds, and all his money does is track the general health of the economy (with a smaller upside/downside due to hedging and diversification).
Agreed. Aaron's claim is making money in a very indirect way. Making money in the market is hard enough through direct means (purchase a security watch it go up). I would say it would be even harder to purchase something then move the inflation lever up or down in hopes to manipulate their personal wealth would be much much harder. Plus that also means that they can agree on a set of securities they wish to target which I would say is less likely than a cold day in hell. Not to mention the amount of money they lost and haven't gotten back is pale in comparison holding inflation at 3% instead of 4%.
What I would argue is that Bankers and Wallstreet just want it to go back to what it was. They're trying as hard as they can trying to build a time machine to go back before everything fell apart, and resisting all attempts at changing for the better. They just want this to all go away. So given the choice they want that lever to make everything as it was before which is impossible.
I understand that legally this is the way it's supposed to be, but do you really expect us to believe that Bernanke doesn't understand what's in his portfolio? Come on...
You're also dismissing the social wins aspect of this: you definitely can't argue that Bernanke doesn't know the way his friends are betting, even if he's "blind" to his own portfolio. Bernanke doesn't have to win directly off this for there still to be a possibility of him making corrupt decisions that help both him and his social network.
I understand that legally this is the way it's supposed to be, but do you really expect us to believe that Bernanke doesn't understand what's in his portfolio? Come on...
Bernake doesn't know what's in his portfolio, because his money managers don't tell him. That's why many agency heads are required to put their money into a blind trust. If you have evidence to the contrary, by all means notify the proper agency (I think OTS, not really sure).
As for Bernake's friends, I expect most of them don't tell him (or anyone else) how they are betting. If I tell you my trading strategy, you can turn around and take my money.
I don't see it as much a conspiracy theory as an understanding of human nature.
Originally, the fed was created by a secret committee of bankers on a remote island. It was rushed through congress quietly -- I know, because I read the decades old NY Times article covering the legislation at the Will Rogers Museum.
Then, if you watch the recent Moore film, you'll see that the current bail out was voted down in congress, then secret meetings led by many of these bankers, GS and the like, prompted a revote and they rushed it through again -- when it passed.
What Aaron said is pretty accurate. The bankers aren't looking out for main street and the jobs won't be back for a while.
I've been trying to sell a house now for almost a year and many people want it and none of them can get a loan -- they've tried. They have jobs. They have income and the ability to repay the loan, but the banks just aren't giving out any money. Contrast that to 4 years ago when you didn't even have to have a job at all or verify income to get a million dollar loan -- I know, because it was my job to build information systems to help the subprime match makers connect home buyers with the banks who wanted to give them the loans.
When I realized how dirty it all was -- I quit and started my own company and I'm very glad I did.