It was sound advice but like most advice, no matter who or how wise, I did not listen. A few months later, I would lose 5,000 dollars in one day on a little company called Amazon – had I instead bought shares and held until today my gain would be around $125,000.
This wasn’t the worst trade I had ever made. I owned 10-20 bitcoin when it was around 15-30 dollars and would now be $180,000 minimum. If that isn’t bad enough, I used my bitcoin to fund transactions on a very clever website later revealed to have been run by Ross Ulbricht.
At eighteen, before my bitcoin purchase, my “focus” was on money, sports, politics, stocks, and a new obsessive curiosity about the sea turtle – I highly recommend “Turtle: The Incredible Journey”, a movie that almost upended my entire life’s direction but I was fortunate to come along a cat that needed a lot of care and attention, so it didn’t. What did upend my life was not something but someone. I had heard the name plenty of times before. I had read about the institution wherein this powerful man with an odd trembling voice like he lives in a perpetual state of fear sat atop. I would get to know him quite well over the years as he transformed from Gandalf the Grey to Gandalf the White.
His name. Ben Bernaneckee.. No Berninakey.
Ben Bernanke. That’s it.
Or Big Ben Zo(anthids)Bernanke
Or as I refer to him… 290 Billion Benjamins Bernanke. That equals 29 Trillion. I consulted experts.
And that was a real-life House Financial Services Committee Member at a hearing referring to the Bernank as if he’s some unknown peasant and doesn’t reseserve respepect….
Ben Bernanke and the Federal Reserve had more influence than Barack Obama did in regards to economic impact and policy; I think he is one of the most influential Americans ever. Him, Hank Paulson, and Tim Geithner saved the U.S. financial system and did it with only 29 trillion dollars. No, really. 29 Trillion. No. Really. Did you click the link?
Some would call him a hero. Some would call him heroin. Which or whatever you choose, it’s hard to take Congress seriously when members of the financial services committee aren’t familiar with a former chairman of the board. That’s like a coach in the NBA being unfamiliar with the name Michael Jordan.
Ben Bernanke was nominated for Chairman of the Board and confirmed in 2006. It would take a few years before I grasped the role and power of the Fed. In or around the year 2010, I went into the deep end of our Central Bank and monetary policy and would never return.
Mr. Bernanke and the Federal Reserve changed my life forever.
He would steal my innocence, harden my heart, and corrupt my soul. The only way to explain this life altering feeling is through a common experience we all have(to my dismay not all people share the same feeling). The experience I’m referencing is when your parents finally tell you Santa Claus isn’t real. Most of the time, like me, you only find the truth after you learn it from a friend. I didn’t believe my parents to be capable of such a thing, but when I saw they didn’t find their lie to be important, I never would trust them again. I was flabbergasted not just by my parents lie but the fact all adults partake in this evil construct. After the truth was revealed, every statement or demand by my parents, or any adult, was suspect to me and yet they all had the audacity to act as if I had authority or behavioral problems. If they could lie with such ease AND take great joy in doing so, what else could all of these big people be lying to me about? Even worse, what are they betraying each other about? WHY AM I THE ONLY ONE FREAKING OUT ABOUT THIS!? Was how I felt…
The problems still continue today. Apparently, I’m a “grinch” because I don’t enjoy Christmas. I’ve made peace with this. Knowing I’m not a part of psychotic collective which sits upon a throne of lies is one of my biggest achievements. Being a grinch is manageable because some people feel bad or attempt to change your holiday “spirit”, making it a point to invite you to family gatherings or other events. Of course, I do hate myself every minute knowing one of these little people(not midgets) will have their world shattered at any moment and I, like so many in the Reich, partake in the lie to keep everybody happy. Nonetheless, I still attend these gatherings while construing a modicum of normalcy as I continue my work to one day end this charade for good.
Now that I’m a “grown-up”, I’ve come to realize most things resemble this evil fairy tale of Santa Claus. The worst being the Federal Reserve and their fiat presents. Being a grinch is one thing, but being a conspiratorial grinch is an enlightened darkness few can stomach. Simply because I try to make children aware that Santa and their presents are actually not free, and one day they will be liable for a debt they never had a choice in, I am irresponsible and a bad Uncle.
Yes, I agree that’s poor strategy. I’m venturing into the unknown so mistakes will be made!
Anyhow. The Fed is like that.
I started losing my interest in money, sports, and politics. In the middle of the night I’d violently spring awake gasping for air, covered in sweat, and my girlfriend(now ex thanks to..) would ask, “was it Bernanke again?” I tried yoga, meditation, long nature walks, pretending to be happy at Christmas, water AND coffee enemas. Nothing worked.
I fear at this point you believe I’m joking.
Am I exaggerating the BernankEffect? Perhaps. In all seriousness, it did affect my interest in politics and how I viewed many things.
I thought crooked politicians shaped the world and it seemed to me most everybody else did too. The truth is you could pay little attention to politics and still see into the future of the US economy and political landscape through Federal Reserve policy; flip those around and you’re just watching or playing in a reality TV show that is directed behind the scenes.
During Mr. Bernanke’s tenure I misunderstood the intricacies of his monetary policy; Quantitative Easing and how it affects the money supply. I was young and most 20 year olds lack a thorough education and/or necessary experience to understand much of anything. Now that a decade has passed there has been time to reflect on those events with more knowledge. When you’re young there is a tendency to overestimate your actual understanding of complex subjects like economics. What astounds me is how many financial advisors and other financial professionals still do not understand the effects of our current monetary system.
If you have a financial advisor, I’d encourage you to ask them about the Fed’s monetary policy and how it works. Although, for now, a lot of these so-called professionals have probably made their clients decent or even tremendous returns. As each year passes, the risk to their client grows because the future will be almost entirely in the hands of the central planners – government/Federal Reserve. Financial Planning for the next 10, 20, 30 years or anything long term is dead. If you’re under 40 and have some form of an IRA or similar investment, you’re making a severe mistake.
Recovery
The only time I’ve managed to free my mind from the Frequent Fed Rage was through another failure. I had hurt my best friend with years of poor decisions and choices that affected who I was and our relationship. After she had left, I proceeded to double down on that lifestyle for a few more years until a similar BernankEffect would strike all over again – except this time with a lot more optimism(Mood changed and it has suffered many downgrades since March) and without the nightmares. You may know him as Chairman Jerome Powell. If you’re like the majority of Americans, you probably do not know him at all. I came to see him as Jerome “Seventeen MPTs” Powell. (17 monetary policy tools).
Let me explain how and why this fanatical obsession came about and remains through an unnecessary story that I hope persuades you to experiment with Fed at least once or twice a week. I’m not sure why it would, as I explained earlier it has ruined my life, but some people, like I, seemingly long to do so.
As a teenager, I’d come home and walk past by my roommates to the stairs and head up to a territory I was provided. Along that walk, my roommates named Mom and Dad, or in rare cases, Dad and Mom, often interrupted the journey with a variety of interrogation techniques that, in my opinion, would not hold up in the court of law. Instinctively I began to prepare for the enemies’ assault by trying to predict their questions with a satisfactory answer – a strategy that my research later revealed had a 98.4% fail rate. Instead of trying to find answers or solutions, such as working to correct my grades at school or behave in any way responsible so I wouldn’t need to be questioned, I’d form several different strategies throughout the years but only one that could be used with repetition.
I had other successful strategies like, “sorry, gotta take a shit,” but those can’t be recycled with regularity.
The best approach was to examine the television show they were watching, listen for a subject I could use, and ask a question I usually didn’t give a shit about. Of course, there were side effects to this procedure; it may increase the length of discussion; it may decrease the length I can manage to appear sober; I’d have to commit to tasks I’d rather not commit to – something I still struggle with. It would succeed in limiting their school and other nagging like questions. At the time, my parents watched Fox News with a Trump like regularity, so a question about politics led to a lot of (I refuse to use education in any manner that relates to politics) stuff. These conversations did begin to fuel my interest in politics and would lead me to a sort of “Great Awakening”, which occurred before the BernankEffect that would cause “QE Fade and Decay.”
As the teenage years were about to conclude my interest in politics would end with it. If I engage in politics today, it’s ultimately to bring attention to one subject: wealth inequality & the Federal Reserve. Until a politician makes monetary policy their primary concern I see all politicians and presidents as having little to no influence on the trajectory of our Economy and individual rights. The U.S. is destined to an economy that is mostly controlled by the state because wealth inequality will grow exponentially. Every economic crisis will cause greater hardship for the middle class and poor but they won’t understand the root cause and will even support policies that spur this cycle.
The obvious response will be to tax the wealthy and expand social programs. Wealth inequality in itself is not a bad thing. It’s a necessary quality of free markets that usually benefits everybody – markets have flaws and suffer periods where value is distorted and corrupt means are rewarded more than others. However, not all wealth inequality is the same and how it’s derived matters greatly.
Unfortunately, the biggest cause of America’s wealth inequality is a subject no politician wants to touch because it’s not a relatable, popular or simple topic, and you’d have to admit the entire economic system favors the extremely wealthy – good luck making a political career out of that.
This is why Republicans or the right will continue to fail for the foreseeable future and the left will succeed in getting policies like UBI, Universal Healthcare, and more all while their standard of living increasingly declines. Over the years I’ve heard some of the rights’ most popular pundits defend U.S. wealth inequality. Ben Shapiro and Steven Crowder, from what I recall, take a slightly different approach but they come to the same conclusion, it’s not a problem. I went to YouTube and searched “Ben Shapiro wealth inequality.” Here is one of the top results that was under four minutes.
In this particular instance, Ben “No Ze, Zir, nor Zo” Shapiro says.. (summarizing) there is a widening gap in wealth inequality but both incomes are still rising; the incomes of the wealthy are rising faster due to investment income, which suggests one way to get out of poverty is to save and invest in the stock market. Focusing on income inequality is a moral mistake(the right will ignore this issue because of this line of thought..
The last one is particularly hilarious, confusing, and absurd. I think Shapiro is extremely intelligent – an opinion almost exclusively derived from seeing him play violin at age 12 and the fact he achieved more than I ever will before the age of 18(although he had an obvious advantage as his opinion makes clear he hasn’t suffered from the BernankEffect) – but he’s either being disingenuous or has not given much thought to this subject. He believes the only area of focus should be on poverty and not wealth inequality because there is no correlation between poverty and wealth inequality.
Before I answer Ben, I need to bring back Ben Barneyken.
That doesn’t seem right.
Ben Bernanke. Thanks Google.
While monetary policy took a change for the worst in 1971(when Nixon opened up the Watergates..h.a.) when the U.S. left the gold standard, the Global Financial Crisis in 2008 permanently changed monetary policy – at least for the life of the dollar. Bernanke didn’t just change the dynamic of the Fed by moving from a corridor to floor system, a policy that would lead to permanent balance sheet expansion, he broke our financial markets to a point they’re incapable of any prolonged decline without the entire system collapsing. Is it really a coincidence the longest expansion in U.S. history came after the global financial crisis? The “emergency facilities” will become permanent policy tools for the Fed – a few are scheduled to end on December 31st & the others in March. These tools may be “put back in the toolbox” but they won’t make it a year without having emergency facilities and soon they’ll be conventional policy tools.
Also, the Federal Reserve only needs the approval from the Treasury Secretary to create an Emergency Facility; it needs Congress only if they believe it necessary the Treasury(“tax dollars”)should backstop any losses the facilities may incur. Losses or profits incurred by the Fed from Treasury purchases are different than losses from most emergency facilities but this is a topic for another day. Lastly, the Treasury could backstop Fed facilities by using funds in the Exchange Stabilization Fund – I highly recommend you research this fund if you don’t know how it operates! Here’s a YouTube video from 10 years ago trying to limit ESF capabilities – nothing has changed and if anything it’s much worse.
Bernanke may not be entirely responsible for this outcome because the Federal Reserve Act and its mandates(usually referred to as dual mandate), amended by Congress, have a huge flaw – can you guess which decade Congress amended the act?
In 1977, the new amendment would adjust monetary policy to target maximum employment and stable prices. The first mandate is the problem and this will be discussed in more detail later but for now I’ll provide a brief summary.
There’s a common misunderstanding when it comes to employment. People assume increasing employment/decreasing unemployment is always good and decreasing employment/increasing unemployment is always bad. This is far from true. When malinvestments occur, like the housing bubble, recessions are needed to liquidate these malinvestments and correct the problems. This mandate is flawed because it tries to prevent this from occurring and often compounds the problems.
In my opinion, the Fed should not focus on price stability and how their policy is influencing the economy – such as low rates in the early 2000’s exacerbating the housing bubble. The goal should be to create a policy that fosters sustainable growth. This may require short periods of allowing instability – i.e. there should be no mandates.
This brings me back to Ben Shapiro and wealth inequality. Examining wealth inequality by comparing other countries is not a fair way to assess the matter. Many undeveloped countries have vastly different laws, governments, and financial systems. Haiti, China, Angola, Sri Lanka, Iran, and others close to the United States in wealth inequality(using the “Gini Index”) all have drastically different economies and preceding decades – this index is flawed because Mr. Shapiro is correct in that there’s no correlation between wealth inequality and the average citizens standard of living(SOL). He’s wrong to believe that a better SOL for the bottom justifies wealth inequality. He believes those who focus on wealth inequality are making a moral mistake…
Let’s use a simple example to illustrate how this opinion is deeply flawed. If you own a business 50/50 with a partner and in a few years both of your incomes greatly increase, you’re both doing better than before. Although, it turns out your partner was a bit “wiser” and in the business partnership agreement there were aspects which benefitted him causing his income to be much larger than yours. Should you not be upset? Is it morally wrong since you’re both better off?
This analogy is on over simplistic. Wealthy people aren’t trying to deceive you and most aren’t responsible for creating an economy that provides them advantages. Yet they do have an advantage and the signs are clear as day. It’s frustrating to see so many people misunderstanding the cause of wealth inequality or pretending it’s not a problem. It’s one of the biggest problems today and if it continues to go unaddressed the U.S. will begin to crumble.
Ben may be unknowingly doing this but he is supporting a policy which favors one group over another; he is indirectly supporting wealth distribution; and thus ultimately favoring a violation of individual rights that will lead to its decimation.
In the next part of this article, I will detail how the U.S. Economy was changed to benefit the financial sector and why wealth inequality is a design of our monetary system. And I will use less words and more data….
