Ben Bernanke Gave Foreign Central Banks $500,000,000,000 on Behalf of You and I...How Generous of Him

Watch this first: http://www.youtube.com/watch?v=n0NYBTkE1yQ

I believe this clip speaks for itself. However, I also believe it is worth highlighting the following:

1) Most importantly, the private bank which oversees our banking system and much of the economy handed out half a trillion dollars to foreign countries, without anyone in Congress ever voting on it or even being apprised of it (until this hearing, and only after Rep Grayson had the wherewithal to ask). If we are interpreting the Constitution even remotely in the spirit of its text, then this is an outright violation of the Constitution.

2) So that might beg the response, "but the provision to do so is in the Federal Reserve Act, which amended the Constitution, so therefore it's ok." This is flawed logic to say the absolute least. If the Fed Reserve Act indeed makes this allowable, then shouldn't we repeal the Act? Why would any American citizen want a law that allows its central bank to give away billions of dollars to foreign banks (thus obligating future generations to the resulting debt burden)? Has any citizen witnessed a resultant economic benefit from this action? Also note that the Act was drafted by six bankers and one senator 99 years ago (in 1910). I have an inkling that the bankers wrote the Act to reflect their interests, not yours or mine. Just a hunch.

3) Rep Grayson probably deserves our support for questioning Bernanke in this fashion. Of course, to be thorough, his entire record on this subject should be scrutinized (which I have not done).

4) Rep Grayson is small proof that, once in a while, Congressmen actually read the relevant documents upon which they are making legislative and oversight decisions.

5) Bernanke does not appear to be confident in his knowledge of the legal authorities and Fed Reserve Act provisions affecting his chairmanship. But who needs to be when you can essentially commit the larceny of 300 million people and not be held accountable for it.

6) The Chairman of the Congressional committee (Barney Frank) sounds eager to end this line of questioning as Grayson's time limit expires.

7) It will be interesting to see how this kind of revelation affects the Audit the Fed bill (HR 1207) that Congressman Ron Paul initiated in February of this year. You can track the bill's progress here: http://www.govtrack.us/congress/bill.xpd?bill=h111-1207

Black Swan Conjecture

I'm currently reading a book called The Black Swan: The Impact of the Highly Improbable, by Nassim Nicholas Taleb. Taleb was a trader and derivatives expert on Wall Street, before eventually releasing the aforementioned book, as well as Fooled by Randomness in 2001. I encourage people to learn more about Taleb and his black swan conjecture (you can Google/Wikipedia both items), as well as read the book.

In short, the title is derived from the fact that in 1697, Dutch explorers in Australia discovered the first black swans -- negating centuries of assumption that all swans were white. Taleb expounds on this by stating that black swan events fit the following three criteria:

1) the event is completely unexpected
2) it is highly impactful
3) it is retrospectively distorted; that is, afterward it is rationalized as if it was expected

If you're hesitant or wondering what the practical application is, consider the fact that Taleb's Universa Investments fund (he advises them but does not get directly involved in trading) saw gains between 50 and 110% by the end of 2008. Compare that to the standard 40-60% losses sustained by most fund managers and investment gurus during the same time frame.

To underscore the point, check out the following clip:

http://www.youtube.com/watch?v=_Jli7xPOvIA


It's worth watching the following clips as well:

http://www.youtube.com/watch?v=krU1wPb7i6c

http://www.youtube.com/watch?v=uX4P6I-7JTI


Finally, his website: www.fooledbyrandomness.com

I will continue to post on this general subject going forward, including some upcoming thoughts on utilizing the black swan conjecture in conjunction with strategies proffered by Peter Schiff and Jim Rogers.

Ben Bernanke Has Gotten Everything Wrong...So Naturally He's the Best Guy for the Job

http://www.youtube.com/watch?v=HQ79Pt2GNJo

This must be why the administration strongly endorsed Bernanke recently as the best guy for the job, as they prepare to reappoint him as Fed Chairman. At least he's consistent.