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Bernanke Backs Yellen: Taper Depends On Economy

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Read the comments ..... The Fed gets blasted

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FED has never tapered, it breaks a debt based system.

The FED has increased the currency supply 7.4% on average for 99 years.

We only have enough currency to pay the debt. So money must be printed to pay the interest or the system defaults.

If the dollar happens to fail, the creditors collect their collateral. Win Win for the FED members.

Gold, silver, copper and possibly BTC are Sabos in the monetary machinery.

Free includes debt-free!

My opinion is that both sides

My opinion is that both sides of this issue have it wrong on the same issue.

People like Ben Berneke, Obama, Helen, Ron Paul, Rand Paul, etc. and a large fraction of Congress believe that the Federal Reserve has these magical powers that it just doesn't have.

Some like Berneke, Obama, and Yellen think that that power is good/is being used to do good. People like Ron and Rand think that that power is bad/being used to do bad. But the problem is that the power isn't there in the first place.

Don't get me wrong. There is a psychological effect. People think that the federal reserve has magic powers, so when it does something, the markets react precisely because they think it has magic powers. Eventually, you see the market correct and go to where it should be....and I mean these are relatively minor corrections.

But the Federal Reserve can basically do one thing: Manage short-term interest rates. That...is...it. Regulation? Done by elected officials in governments. Money supply? Done by the banking system. Long-term interest rates? Partially affected due to anticipation of the Fed keeping rates low, but anything longer than 5 years you can see how poorly the Fed has done in keeping rates low (http://www.econlib.org/library/Columns/y2013/Hummelinterestr...). Value of government bonds? Much more a factor of other opportunities than the federal funds rate? Government spending? Nil, zilch, nada; government can run whatever deficit it wants.

The one caveat being the way the Federal Reserve has directly purchased bank assets in order to help out a banks's balance sheet...this is pure corporate welfare, although if you actually look at the assets the Fed has acquired, they at the very least have gotten 85% of the value of the original purchase. It looks like the main benefit they gave the banks was liquidity, just like in QE.

Fiscal policy is what helped shaved 5 points off unemployment, and fiscal policy will help this country get back on track.

Plan for eliminating the national debt in 10-20 years:

Overview: http://rolexian.wordpress.com/2010/09/12/my-plan-for-reducin...

Specific cuts; defense spending: http://rolexian.wordpress.com/2011/01/03/more-detailed-look-a