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Happy Holidays, Mr. Bernanke


And best of luck in your second term.

Dear Mr. Bernanke,

Now that you've been referred to as an "overlord" and made "person of the year" by Time magazine, I wanted to be quick to congratulate you. From what I read in Time, you've apparently "saved the world" from a systemic collapse. In your own words "we came very, very close to a depression." For me it's simply history repeating itself all over again, but on two fronts. First, we're repeating the Greenspan years, but with you as the new "Maestro" and the second repeat is that of the 1930s.

In reference to the Greenspan years, Time apparently has a very short memory. I know you remember your predecessor was hailed as the greatest Fed Chairman in world history only to be completely discredited during the financial crisis right in front of Congress. I guess Time didn't know that you were Alan Greenspan's co-captain of the US Titanic that steered the global economy into a gigantic economic iceberg in 2008. It would appear that you're now a co-captain with Mr. Tim Geithner, steering our economy right into the biggest iceberg of all -- a United States fiscal funding crisis. It certainly is a good thing we have you at the helm to monetize the insanity in Washington. You better get those printing presses ready to purchase much of the $1.8 trillion in government debt needed to be refinanced next year and the $2 trillion of newly issued debt in order to keep the insanity in Washington alive.

Time got a few things right so I want to give them some credit. First, that you were "clueless as Greenspan about the coming storm." Second, that mass monetary interventions and bailouts created "moral hazard" like never before in the global financial system. Greenspan did it in the 1997 and 1998 global crisis events that led to the dot-com bubble. He did it again, with your assistance and guidance, in the 2001-2003 helicopter droppings that led to the real estate bubble and the sub-prime crisis. You and Mr. Geithner's recent efforts have only accelerated the global financial system to witnessing the biggest bubble in world history to go pop -- the US government's credit bubble. This is what happens when you transfer the huge private debt burden and Wall Street bailouts into a Mt. Everest-sized public debt pile-up.

Apparently this moral hazard has spread to Congress as they just raised the government debt ceiling to nearly 13 trillion dollars. The good news is that Congress can depend on you to continue bailing them out. That number may not be scary to you but it's scaring the heck out of our government's creditors -- like China. The first evidence of that was the US dollar getting sold down hard. Now it's the bonds that are being dumped, and after that, stocks will follow.
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