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“There’s No Sense of Urgency” in Washington

Posted by Larry Doyle on February 10, 2011 7:35 AM |

For those critical of Ben Bernanke and his massive bubble inducing, asset inflating quantitative easing program, Ben and his Federal Reserve friends have something to say to you. What wisdom do these banking behemoths have to share? Are you sitting down? In so many words, Bernanke and company offered that ‘if you think we’re bad, you should really focus on the clowns who have run up the out of control federal deficit.’

Wow!

Do two wrongs make a right? Does digging one hole get us out of another? Does a series of left hand turns ultimately bring us right back to where we began? Does anybody in Washington have the character to address our real structural problems? Does pointing fingers really get us anywhere? Why are we faced with these questions and problems? A lack of real leadership.

Bloomberg reports on this massive finger pointing in writing, Bernanke Makes Sure Fed Reminds Congress Deficit Bigger Than QE2:

Federal Reserve Chairman Ben S. Bernanke is trying to make sure the U.S. central bank doesn’t become a scapegoat for fiscal profligacy.

The Fed sparked the harshest political backlash in three decades after announcing a second round of so-called quantitative easing on Nov. 3. Republicans, including House Speaker John Boehner of Ohio, said QE2 risks accelerating inflation, weakening the dollar and fueling asset bubbles.

“What is needed is very clear communication to the Congress at large and the American public,” that the program isn’t “crazy or highly unusual and that it made sense, but that it does involve some risk and that’s being managed,” said Alfred Broaddus, former president of the Federal Reserve Bank of Richmond. “You’ve got to be careful about turning this thing around.”

Careful?

Is that Fed-speak for not enacting real regulatory change? Is that Fed-speak for kicking the can down the road? Is that Fed-speak for not exposing the massive losses that still reside within our banking system? Is that Fed-speak for continuing to bail out banks both here and abroad?

Careful, my ass! What we need is a sense of urgency to bring real pursuit of truth and transparency into our nation. Who has that urgency? Anybody?

“Unfortunately, there’s no sense of urgency right now,” said John Lonski, chief economist at Moody’s Capital Markets Group in New York. “Once you reach the point where concerns about the federal budget deficit render financial markets dysfunctional, then Congress will take action pronto.”

So we need to literally have another crisis in order for somebody in Washington to take real action? Are you kidding me? What a farce! Who do we need to listen to? Let’s go back to June 2009 and listen to The Wisdom of Pete Peterson:

Pete Peterson is the son of Greek immigrants and has lived the American dream. He has held senior positions in Washington, run a Wall Street investment bank, and launched a major private equity shop. Peterson has been wildly successful in all his ventures. That said, his work is not finished.

This 12-minute Bloomberg video is one you will want to watch, save, cherish, and share. Peterson addresses the potential massive pitfalls of our “total” deficit, including Social Security and Medicare. He specifically references insights provided to him from foreign leaders.

He provides the wisdom of a man who has global relationships in the worlds of finance and politics. He grasps the depth of the issues facing our country. He is committed to making a difference and elevating the dialogue and debate surrounding our financial future.

Peterson, a son of “the Greatest Generation,” is a great American.

Please share this clip with friends and colleagues. They will thank you. ~ LD

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own and not those of Greenwich Investment Management. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Huckleberry

    I watched the video twice. It raises some questions.

    No question that a graying US will face serious entitlement issues. But why does he keep saying “unfunded”? Social Security is fully funded to 2037. Doe he know something the rest of us don’t?

    He claims taxes will cause capital flight. Perhaps in Greenspan’s world. But would a .1% tax on financial transactions really cause a rush to those safe and reliable emerging markets, with their stellar history of property rights observance? How far would that go toward shoring up SS after 2037?

    He claims investment comes from savings. Far as I can tell, a large part of the “investing” of the last thirty years has come mostly from leveraging.

    Do you think Blackstone has actually performed on a level-playing field? After all, since its inception, it has had a cut of the Federal employee TSp flowing into it. That’s quite backstop on the confidence front, wouldn’t you say?

    Peterson was chairman of the CFR, but I’m looking through his memoir and am having trouble finding his involvement in foreign relations in 1944-45 and again in 1950-53. What gives?

    One final question: do you figure Blackstone’s investments have created more jobs than their “restructuring services” have destroyed?

  • whoisjohngalt

    Larry, this is why there is no sense of urgency:

    http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html

    Obama’s approval # are the best they have been in a year. Why? Well most people have a job, the job market has stabilized, and the stock market and 401Ks are up.

    Trouble spots like no meaningful job creation, federal debt from Congress, and QE2 from the Fed are ignored by half the people.

    Is inflation simmering? Maybe. This might surprise you as I have posted about non-inflation here for the past 2 years–which up until now has been a good call. I am not going out on a limb pointing out food (driven up by ethanol from corn) and oil demand (or is it lack or drilling?) are heating up inflation. Everyone knows that. However, real estate and wage deflation are the current antidote to overall inflation.

    So where does this leave us as a nation? Not in a great place. However, I believe that I can still make $ in this environment. I can only control what I do & I have a current strategy that seems to be working. Good luck to every one else & continue to read Sense on Cents.






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