Fed to avoid revolt and preserve the capital(by mannfm11)

Greenie talked circles in the 1990's, especially after the irrationalexhuberance speech. Once in awhile he would tell the truth if youlistened closely and the financial press would miss it. The joke wasthat he said we don't know there is a bubble until it bursts. The truthI heard from him in 1998 when asked about the market was he said, inthe past things like this haven't ended well. So, he had to avoid thebubble word, then he had to manage the bubble deflation, which it neverdeflated (2% dividends, what the SPX was at the bottom is a bubble, nota bottom), triggering the mortgage bubble.

I am not sureGreenie wasn't caught by surprise. There was deflation in the 1990's. Idon't mean the price level dropped, but that Japan deflated and Japanwas about 50% the US in world economy. Thus, the bankers had a lot ofleeway to let stuff run and money ran to the US. By the time he figuredit out it was too late.

The number one thing a Fed Chairmancannot allow on his watch it the perception to develop they started adepression. No matter how well you can show them, the general public isgoing to look at Greenie as a successful genius and Bernanke as well ifhe navigates us through this credit mess and prosperity returns longenough for him to get off the shift. They can only carry this thing onby speaking like idiots and morons in public. The plan was clearly howto keep this thing going. I would say Rubin was more akin to the planthan Greenie.

One thing that I doubt has ever happened in acredit based money system, the fact that poor countries like India andChina are now in possession of huge supplies of this credit money. Theynot only are relatively wealthy compared to the recent past, but nowhave a huge interest in continuing the value of the credit money. It iswhy the bulls are not dying, that the expanding world is loaded withthe real stuff, not the directly borrowed stuff. Thus they aren'tcarrying the burden of borrowing this crap as they were in the pastbooms. You might be old enough to recall the IMF and World Bank loansto Brazil, Mexico and several other countries in an effort to continuea boom in the developed world. Of course it ended in inflation anddefault.

I don't think something this magnatude can be plannedbecause we are in uncharted waters. The actions taken are intentionaland I think designed to avoid revolt and preserve the capital of thosethat are the actual masters of the Fed and the government. Some peopledon't believe in conspiracy. It is right in front of our eyes and thatis why they can't see it.