Geopolitical chaos procreating a chaotic leaderless world is sucking the literal life out of human hope. The tentacles of austerity measures and quantitative easing are the primary catalyst of all the madness. One way or another every government financier around the world is determined to cultivate the appearance that the good times are still rolling. The only problem is that the natural rate of failure refuses to participate in the economic facade. Fiat currencies’ purchasing power dwindles, the pounding drum beat of war beckons, and an open ended hegemonic polarity struggle for commodities ensues.

While serving as a member of the Board of Governors of the Federal Reserve System in 2002, current U.S. Federal Reserve Chairman Ben Bernanke gave the world a glimpse into the past, present, and future all at once. In his speech, entitled “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” Ben Bernanke stated:

“Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it’s worth noting that there have been times when exchange rate policy has been an effective weapon against deflation. A striking example from U.S. history is Franklin Roosevelt’s 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation.”

Today the infamous 40 percent strikes again, as Cyprus agreed to the terms of a European Union bailout in which banks will seize 40 percent of uninsured bank depositors’ wealth.

Moody’s Investors Service was quoted in Bloomberg as saying, “The seizure of larger deposits may spark tensions with Russia, the source of an estimated $31 billion in holdings in Cypriot banks.”

Proxy wars have gone beyond the spectrum of arming rogue militants and allied nations in dispersed pockets of the globe, graduating to the realm of state sponsored economic terrorism. As “Gerald Celente” consistently and aptly states, “Currency wars + Trade Wars = Real Wars.”

All of the economic wheeling and dealing continues on as the “Arab Spring” explodes into a caballing year round inferno engulfing the entire Middle East. Daily at the United Nations, permanent Security Council members China, Russia, France, United Kingdom, and the United States spar over regional influence with each passing veto and resolution.

This is most apparent in Syria where Russia opposes any intervention as it struggles to prop up the government of its last remaining ally in the Mediterranean region. Russian naval forces stationed at Tartus, Syria may be the last line of repellent preventing NATO intervention.

The lines of frienemy engagement get blurrier with every passing engagement.

Simultaneously as the United States prepares to implement its own austerity measure policy that has carefully been repackaged and marketed to the public under the label sequestration, it is arming rebels in Syria. All claims of being in financial dire straits gets immediately lost within the noise of controlling key choke points around the globe.

One cannot forget less than two years after watching the Al Qaeda flag being proudly raised in the Libyan city of Benghazi, that America’s new found ally the Free Syrian Army are the protégés of Al Qaeda.

The life cycle of keyboards do not possess the durability to correctly and fully analyze threats posed by the uncontrollable Kim Jong Un ruled North Korea. The isolated peninsula nation even managed to startle its longtime ally China into voting in favor of U.N. Security Council resolution 2094. Chinese Foreign Ministry spokesman Qin Gang was quoted as saying;

“China supports the UN Security Council’s necessary and moderate response to the nuclear test of the Democratic People’s Republic of Korea (DPRK).”

Barely beyond two weeks later newly appointed Chinese President Xi Jinping, warned the West not to meddle in Syria’s civil war while on his first visit to Russia.

Not even the mythical country of Chimerica can rescue the too big to fail world from the natural rate of failure. Governments around the world are taking sides now under the cloak of every global economic and geopolitical conflict, because nations know that a hegemonic storm is coming with no evacuation routes or shelter in sight. Once more, honesty of time is proving that which cannot last forever won’t.

Image courtesy: European Parliament

The article Battle Lines Drawn: Spheres of Survival appeared first on The Toonari Post - News, Powered by the People!.

Federal Reserve Chairman Ben Bernanke painted a gloomy picture of the economy when he testified before the Joint Economic Committee on Capitol Hill. Bernanke told members of Congress that the economic recovery was “close to faltering.” He said that the Federal Reserve had taken great pains to promote economic growth, but it cannot be expected to singlehandedly avert a financial crisis.

“Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the U.S. economy,” he said. “Fostering healthy growth and job creation is a shared responsibility of all economic policy makers.”

The underlying theme of Bernanke’s testimony was that America’s economic growth had been diminished by world events such as the earthquake in Japan and the ongoing wrangle over European debt. The economy has also been undermined from within by domestic problems such as the weak housing market and depressed consumer confidence.

“Consumer behavior has both reflected and contributed to the slow pace of recovery,” he said. “Households have been very cautious in their spending decisions, as declines in house prices and in the values of financial assets have reduced household wealth, and many families continue to struggle with high debt burdens or reduced access to credit.”

Bernanke went on to say that, although prices have risen more sharply than expected over the past year, he expects the situation to stabilize soon. Until now, Bernanke suggested that the economy would recover as long as the government did not interfere. However, in today’s testimony, he appeared to advocate a more proactive role for the government, and he urged legislators to keep four goals in mind when crafting policy.

First, he urged the government to tackle the national debt in the hopes of securing long-term fiscal responsibility. While he welcomed the creation of a Joint Select Committee on Deficit Reduction, he cautioned that much more would need to be done in order to guarantee fiscal sustainability.

Second, Bernanke urged the government to avoid actions that might imperil the economic recovery, such as deep short-term spending cuts. Under the circumstances, legislators could be forgiven for wondering if this was not in conflict with his call to reduce the deficit, but Bernanke assured them that this was not the case.

“These first two objectives are certainly not incompatible, as putting in place a credible plan for reducing future deficits over the longer term does not preclude attending to the implications of fiscal choices for the recovery in the near term,” he said. The government’s third goal should be crafting policies that promote long-term growth and economic opportunity.

“As a nation, we need to think carefully about how federal spending priorities and the design of the tax code affect the productivity and vitality of our economy in the longer term,” he said. Finally, Bernanke called on the government to reform its budgeting process. He urged legislators to work out a system that was more transparent and less likely to cause market disruptions due to partisan wrangling.

Bernanke’s comments come amidst mounting pessimism regarding the state of the US economy. Last week, the Economic Cycle Research Institute warned its clients that America was headed toward a new recession. “If you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street,” they said.
Albert H. Teich / Shutterstock.com

The article Fed Reserve Chairman Bernanke Paints Gloomy Economic Picture appeared first on The Toonari Post - News, Powered by the People!.