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Bernanke delivers blunt warning on U.S. debt
washington times ^ | February 25, 2010 | unattributed

Posted on 02/26/2010 11:04:23 AM PST by prairiebreeze

With uncharacteristic bluntness, Federal Reserve Chairman Ben S. Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.

Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors, show that the U.S. is vulnerable to a sudden reversal of fortunes that would force taxpayers to pay higher interest rates on the debt, Mr. Bernanke said.

"It's not something that is 10 years away. It affects the markets currently," he told the House Financial Services Committee. "It is possible that bond markets will become worried about the sustainability [of yearly deficits over $1 trillion], and we may find ourselves facing higher interest rates even today."

~~snip~~

"We're not going to monetize the debt," Mr. Bernanke declared flatly, stressing that Congress needs to start making plans to bring down the deficit to avoid such a dangerous dilemma for the Fed.

(Excerpt) Read more at washingtontimes.com ...


TOPICS: Front Page News; Government; News/Current Events
KEYWORDS: bernanke; deficit; fedreserve; greece
I hadn't read that Zeroman has taken the limits off aid the Treasury Department is prepared to give to Freddie and Fannie in order to keep them solvent, but refuses to include that almost $5 trillion guaranted in the federal budget.
1 posted on 02/26/2010 11:04:23 AM PST by prairiebreeze
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To: prairiebreeze

Here’s the excuse for the coming MASSIVE tax hikes.


2 posted on 02/26/2010 11:05:59 AM PST by east1234 (It's the borders stupid! My new environmentalist inspired tagline: cut, kill, dig and drill)
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To: prairiebreeze

Well, DUH! The morons in the White house and Congress need the Fed to tell them they are ruining the dollar? Sheesh.


3 posted on 02/26/2010 11:06:42 AM PST by DariusBane (Even the Rocks shall cry out "Hobamma to the Highest")
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To: prairiebreeze; Owl_Eagle; Sam's Army; Darksheare; pissant; najida; r-q-tek86; blackie; ...

UM THE REPUBLICANS TOLD YOU SO AND YOU STUPID LIBS DID NOT LISTEN....PING!!!!


4 posted on 02/26/2010 11:08:18 AM PST by Jersey Republican Biker Chick (Cleverly disguised as a responsible adult.)
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To: east1234

Going galt here. It is very difficult to tax those that don’t earn and don’t spend.


5 posted on 02/26/2010 11:08:47 AM PST by RobRoy (The US today: Revelation 18:4)
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To: RobRoy

We can’t all do that, living in a cabin are you?


6 posted on 02/26/2010 11:10:42 AM PST by east1234 (It's the borders stupid! My new environmentalist inspired tagline: cut, kill, dig and drill)
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To: prairiebreeze

“Toxic Exploding Freddie Mortgage Factory To Close”
Karl Denninger, 26 Feb 2010

http://market-ticker.org/archives/2016-Toxic-Exploding-Freddie-Mortgage-Factory-To-Close.html


7 posted on 02/26/2010 11:11:48 AM PST by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spirito Sancto.)
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To: prairiebreeze

8 posted on 02/26/2010 11:14:24 AM PST by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spirito Sancto.)
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To: prairiebreeze
Repubs want to include the $5 trillion, Geitner wants to continue to pretend it doesn't exist.

We really do have radicals in our WH, who would like nothing better than to bring down the USA.

9 posted on 02/26/2010 11:15:17 AM PST by what's up
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To: RobRoy
LOL!

"You look supicously like a turnip and I believe you DO have blood in you. Pay UP!"

10 posted on 02/26/2010 11:16:45 AM PST by prairiebreeze (Prayers for the Ft. Hood families, victims and soldiers.)
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To: what's up

Geithner and Obama like to stick their fingers in their ears and sing-song “La-la-la-la...”


11 posted on 02/26/2010 11:18:15 AM PST by prairiebreeze (Prayers for the Ft. Hood families, victims and soldiers.)
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To: east1234

I bought a ~13 acre farm with a new 1,000 sq ft home. It is an entire finger of a plateau aproximately 60 feet over the valley we overlook.

IN the Seattle area I owned my own home for 20 years and lost it in a divorce 12 years ago. I’ve rented ever since and almost bought a few years ago. I thought this runup was nuts and refused to be last in on a pyramid. Also, renting gave me the ability to move at the drop of a hat. I just moved from a 5 bedroom house that was appraised at $525k but I paid $1,600 a month. I now live in a $1,050 condo across the street from my corporate office. That plus the payments on the place in Kentucky is a hair less than my rent payment was in the house, and THAT was cheap.

We leased the farm back to the original owner and we bought two calves, one each, late last winter. We slaughtered them in November and now have about 480 lbs of meat that had a total out of pocket cost of $420. The previous owner canned 75 jars of potatoes last winter that were grown on the land, beyond the other stuff they grew.

The land has a natural well.

If things collapse here, it is waiting for us. It is also where we vacation now. We have the ability to easily fly there whenever we need. Getting the time off is the only challenge. We have what is left of our five bedrooms of stuff (mostly bicycles, music equipment, records and vintage hi-fi stuff and my wife’s collectibles) in storage and plan to drive a U-haul truck there this spring. We’ll fly back and wait for the time we move there permanently, when we’ll drive there in my Scion xB. We plan to move this summer and I plan to telecommute.

But the key was that we did not own a home chaining us to a particular area.

Oh, and the farm is off a road off a road off a road off a highway. The roads around us are what Seattle bike trails aspire to be and we were on the road talking to a neighbor last fall for THREE hours and not a single car drove by. And there are STILL two wall marts and Lowe’s within 13 minutes. It cost us $98k and the US government gave us $8k back. :)


12 posted on 02/26/2010 11:24:42 AM PST by RobRoy (The US today: Revelation 18:4)
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To: prairiebreeze

Bernanke, c’mon. Why get bogged down in the numbers... jeez...


13 posted on 02/26/2010 11:27:11 AM PST by Gene Eric (Your Hope has been redistributed. Here's your Change.)
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To: prairiebreeze

>>”You look supicously like a turnip and I believe you DO have blood in you. Pay UP!”

:)

I’m finding that the easy part to give up is spending money. The hard part to give up is earning money. ;)

And with the exception of food, so many of our durable goods are spent on craigslist and garage sales that they don’t count.


14 posted on 02/26/2010 11:29:31 AM PST by RobRoy (The US today: Revelation 18:4)
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To: RobRoy

Good Job!!! You sound a lot like my brother. He too did a great job of managing his money and made some sharp moves; he too owns a farm and is quite self-sufficient.

In my opinion you should be quite proud of yourself! You made good, sound decisions and took responsibility (both good and bad) for your actions and are now reaping the benefits.

Contrast your actions to so many who acted foolishly, and now want the country to bail them out.

Wish there were more of You (and my brother).


15 posted on 02/26/2010 11:30:29 AM PST by OhhTee5
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To: east1234

Cut spending= political storm.
keep spending= higher interest rates= snuff recovery.
print money = dictatorship


16 posted on 02/26/2010 11:31:19 AM PST by Leisler (What 'free market', where is it?)
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To: prairiebreeze
“Bernanke warned Congress on Wednesday that the United States could soon face a debt crisis...”

Ya think?

Since when did trying to borrow and spend your way out of debt ever work?

You, Mr. Bernanke have facilitated the economic destruction of America. No one buys your whining about the obvious now.

17 posted on 02/26/2010 11:31:21 AM PST by Gabrial (The Whitehouse Nightmare will continue for as long as the Nightmare is in the Whitehouse)
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To: RobRoy

Trading paper money for real land. You..you..must be some sort of ...of crank! /sac


18 posted on 02/26/2010 11:33:28 AM PST by Leisler (What 'free market', where is it?)
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To: RobRoy
We have much the same type of setup. 90 acres of land in West Virginia (about 8-10 of which is a plateau flat enough to cultivate) with a natural gas well, two good springs and one access road.

Twenty minutes from shopping in a medium sized city but standing up on our house seat you'd think you were 100 miles out in the boonies.

Just need to get a small modular home up there this summer and we are good to go.

19 posted on 02/26/2010 11:39:02 AM PST by Notary Sojac (Mi Tio es infermo, pero la carretera es verde!)
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To: east1234

Avoid unnecessary purchases. Become more self-supporting every month. Start a hobby of learning to make something useful. Welcome the big default and consequently small government. They’re trapped.

They haven’t monetized the debt, dollar-for-asset. They’ve only created funny financial instruments. Bernanke said that they won’t monetize the debt, because it wouldn’t work as it has in the past. We no longer have a manufacturing base to support that move with revenues. If they monetized the debt, their money would be worthless. Your local, yocal Minnie Pearl government employees wouldn’t be able to buy anything with their federal funds. They’ll just have to go away mad, because the revenues won’t be there for paying them.


20 posted on 02/26/2010 11:49:34 AM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: Leisler
Cut spending= political storm.

My working theory is that a cultural shift is taking place that will replace this paradigm. I think folks are starting to see the parallel between massive gov't debt and the debt in their own lives.

21 posted on 02/26/2010 11:50:33 AM PST by Poison Pill
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To: prairiebreeze

If we don’t buy much stuff, business will slow down. If business slows down, yeah, the government will raise taxes. Business will slow down more. For lack of revenues, the government will shrink.


22 posted on 02/26/2010 11:52:56 AM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: Leisler

>>Trading paper money for real land. You..you..must be some sort of ...of crank! /sac<<

Real land and junk silver. ;)


23 posted on 02/26/2010 11:53:52 AM PST by RobRoy (The US today: Revelation 18:4)
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To: prairiebreeze
Recent events in Europe, where Greece and other nations with large, unsustainable deficits like the United States are having increasing trouble selling their debt to investors

They're also rioting in the streets. Funny, if this were the Bush administration, the MSM would be reporting it 24/7. Go figure.

24 posted on 02/26/2010 12:03:55 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: Poison Pill

Yes, it seems the storm is pushing back on the spending.


25 posted on 02/26/2010 12:06:05 PM PST by Leisler (What 'free market', where is it?)
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To: RobRoy
Going galt here. It is very difficult to tax those that don’t earn and don’t spend.

Same here. From now on, it's all about surviving it all. Million of other Americans are thinking (and planning) the same way.
The self serving politicians are on their own. It's time we started serving ourselves. (Screw them.)

26 posted on 02/26/2010 12:08:35 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: familyop
Start a hobby of learning to make something useful.

This is extremely important. Learn a skill people need that uses things from nature. (I always advocate soap, hide tanning, or cheese). If everything eventually runs out, you'll be able to go to any town and teach for your keep (and maybe even your life).
No toilet paper? People will use rags. Those rags will need to be washed. Clothes, bodies, utensils....all will need soap.

27 posted on 02/26/2010 12:15:21 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: familyop
Start a hobby of learning to make something useful.

This is extremely important. Learn a skill people need that uses things from nature. (I always advocate soap, hide tanning, or cheese). If everything eventually runs out, you'll be able to go to any town and teach for your keep (and maybe even your life).
No toilet paper? People will use rags. Those rags will need to be washed. Clothes, bodies, utensils....all will need soap.

28 posted on 02/26/2010 12:17:52 PM PST by concerned about politics ("Get thee behind me, Liberal")
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To: Jersey Republican Biker Chick

Unfortunately, liberals don’t understand the meaning of blunt. They think it’s marijuana.


29 posted on 02/26/2010 12:33:27 PM PST by Enterprise (Hey Obama - "We won.")
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To: east1234

Exactly. It will be called another financial “crisis” and Obama will somberly say that we need to “put our differences aside” and “come together” and pass historically large tax increases to save the country.


30 posted on 02/26/2010 12:37:31 PM PST by St. Louis Conservative
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To: prairiebreeze

So, no more Helicopter Ben? No more dumping money out of helicopters? No more secret weapon, the printing press to stave off deflation?

Heh heh heh!


31 posted on 02/26/2010 12:46:44 PM PST by fahraint (git theah fuhstest with the mostest)
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To: prairiebreeze

So, no more Helicopter Ben? No more dumping money out of helicopters? No more secret weapon, the printing press to stave off deflation?

Heh heh heh!


32 posted on 02/26/2010 12:47:40 PM PST by fahraint (git theah fuhstest with the mostest)
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To: concerned about politics
"This is extremely important. Learn a skill people need that uses things from nature."

Yes--like making good steel castings, cutting parts to within .0002", heat treating, etching circuit boards,...


33 posted on 02/26/2010 12:49:12 PM PST by familyop (cbt. engr. (cbt), NG, '89-' 96, Duncan Hunter or no-vote.)
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To: prairiebreeze
We're not going to monetize the debt

Oh but you already have Mr. Bernanke.

34 posted on 02/26/2010 1:05:37 PM PST by Theophilus (Shall the throne of iniquity have fellowship with thee, which frameth mischief by a law?)
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To: Theophilus
We're not going to monetize the debt

Oh but you already have Mr. Bernanke.

Exactly! He monetized so much, the Fed holds less than on October 10, 2007.

The Fed held $779.6 billion in Treasuries, looks like we're down to $776.6 billion since then.

35 posted on 02/26/2010 1:12:38 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: AdmSmith; Berosus; bigheadfred; Convert from ECUSA; dervish; Ernest_at_the_Beach; Fred Nerks; ...
...warned Congress on Wednesday that the United States could soon face a debt crisis like the one in Greece, and declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt.
The debt crisis was manufactured by Zero and his co-conspirators in Congress.
36 posted on 02/26/2010 5:50:55 PM PST by SunkenCiv (Freedom is Priceless.)
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