Wednesday, June 27, 2012

Helicopter Ben

Stories are allegories. The purpose is to paint a picture; to give a narrative; to show someone what happened or what will happen through a lens that can be understood by each person. This is an artful way of making a point. In Ben Bernanke's case, when it comes to the policy he sets, he does just that.

Around a decade ago, Bernanke gave his now infamous "Helicopter Speech" where he alluded to throwing money from helicopters. What everyone has recognized is that he is throu¥wing money. What many have missed is the fact that he said he would do it from helicopters. Why not a plane? Why did he choose a helicopter?

The monied elite have certain codes they use. They think it gives them power. They think it gives them power to tell the world their plans because if the people of the world allow it then the people are not to blame; just as the case of a vampire being asked in, if you hear what their plan is, and you do not challenge it, you have allowed it, and the blame rests on you for being complacent.

The word helicopter was used because Bernanke insinuated that he would keep the economy in a holding pattern while the plans were laid. Like a helicopter, stocks, bonds, and fiat would hover at certain prices, elevated high enough to keep the status quo, but not too low to crash. He would stay in this holding pattern where he would throw his dollars around. This is the code that he gave you, and this is what he is doing.

Bernanke is making his helicopter hover by issuing just enough debt, and although oil and precious metals and some commodities have risen, pensions and other programs have risen too because he has kept stocks up. Bonds are not returning much but because they are going for a premium it is keeping the market liquid. Since fiat is valued against other fiat it is hard to tell that all fiat has been losing value, which is why pricing it in gold is inportant. Yet since most do not price it in gold and price it in Euros or other fiat, the dollar also remains high.

It may seem perplexing that the dollar has kept value through a time of massive debt, but the price (P*) is measured by the supply multiplied by the volacity. The price would fall if both the supply and the volacity were high, but since corporations, such as private and Central Banks have been sitting on cash, the dollars are not moving. This is why the dollars price (P*) has remained elevated, and also how Bernanke is able to remained hovered above the world, spilling more and more cash from above - because the percieved price of the dollar is held constant due to his alchemist powers of creating money and keeping prices high.

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