We’re Now Engaging in the Same Disastrous Policies… Only On a National Level Pt 1

Wednesday, April 6, 2011
By Paul Martin

by Phoenix Capital Research
ZeroHedge.com
04/06/2011

The financial world is entering a massive process of transition though most folks have failed to see it. That process is that of Ben Bernanke being forced to resign and the US Federal Reserve being broken up.

I know many people believe the Fed is always going to be in power, but they are wrong. The US Federal Reserve is in fact the third central bank the US has had. And it, like the other two, will be dismantled in the next five years.

The reason for this is quite simple. The REAL Crisis (of which 2008 was the warm-up) is fast approaching. When I say REAL Crisis I mean full-scale systemic meltdown, a situation in which the market accomplishes what the Fed, regulators, and US Government at large have failed to do: clean house.

The plain facts are right in front of us. The US is broke on every level: Federal, State, Local, and individual/ consumer. We all know this, but we don’t want to admit it because doing so would likely mean wiping out at minimum 30% of what we have today.

Nobody wants this. Consumers don’t want to lose their retirement accounts or their savings. The Government doesn’t want to lose its unending virtual checkbook. Politicians don’t want to lose their financial backers (the oligarchs). And the Fed certainly doesn’t want to lose its massive Free Lunch.

However, it is clear to everyone that the system is broken. Consider that the very policies that Wall Street developed resulting in the 2008 meltdown (excessive debt, fraud, too much leverage, etc) are now being applied to the Federal balance sheet.
Indeed, the Fed’s response to the Financial Crisis was to do the exact same things Wall Street did.

The only reason it worked for a time was because investors continue to believe that the Fed is some kind of omnipotent financial authority that can take on all debts and back up all monetary transactions. The reason they’re willing to believe this is because not doing so would result in the collapse I referred to before.

The Rest…HERE

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