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The total OI for the silver comex probably blew away the bankers. Their decision reached last night, no doubt, was that a raid had to orchestrated as OI was rising and first day notice would be in 3 weeks (on Thursday June 29).The OI rose by a massive 4508 contracts from 116,809 to 121,317. The bankers yesterday provided all the necessary short paper knowing full well that a raid was called for. Do not forget to get front row seats as we watch the delivery front here. The unofficial delivery month of June saw its OI rise from 59 to 60 for a gain of 1 contract despite zero delivery notices filed yesterday. Thus we gained 1 contract or an additional 5000 oz of silver standing for delivery. Speaking of the front July delivery month for silver, we witnessed that its OI fell by only 1234 contracts from 55,594 to 54,360. The key question will be how many of these long holders wish physical now instead of rolling and playing the paper game. The estimated volume today was simply humongous coming in at 89,096. The confirmed volume yesterday was also quite strong at 77,942. It looks like we have two sets of determined players in the silver arena.
Submitted by Tyler Durden on 06/07/2012 09:28 -0400
THURSDAY, JUNE 7, 2012
Good evening Ladies and Gentlemen:
Gold closed down today big time due to the massive raid orchestrated by our bankers. They used the cover of Bernanke's speech to congress where the market reacted to what he did not say rather than what he did say. He showed no inclination towards initiating another round of quantitative easing that which he is doing anyway through swaps. The price of gold fell by $46.20 to $1586.60. Silver fell by 95 cents to $28.52.
Today we heard from Fitch which has warned the USA of a further downgrade and then Fitch lowered the boom on Spain clobbering them by another 3 notches to BBB from A minus. We had a tepid Spanish bond auction where little was raised in the 10 year category. Yields hit 6.04% in that auction. In physical news, Kazakhstan announced it has contracted for 22 tonnes of physical gold and that it is now raising its reserves in gold to total reserves from 12% to 15%. Initial claims in the USA came in slightly better even though last week claims were revised higher again. However a huge 104,500 poor souls who had extended benefits for 99 weeks, saw these guys removed from the unemployed category as their benefits ran out. We will go over all of these stories and more but first let us head over to the comex and assess the damage today.The total gold comex OI rose by 3111 contracts from 423,941 to 427,052. The rise in OI provided enough juice for our bankers to initiate the raid. When they also saw the huge rise in OI in silver, they knew that he had to bomb the comex and hope that many gold and silver leaves would fall from their respective trees. The front delivery month of June saw its OI fall from 1846 to 1826 for a loss of only 20 contracts. We had 30 delivery notices filed yesterday so we actually gained another 1000 oz of gold standing. The next delivery month for gold is August and here the OI gained 3677 contracts rising from 234,018 to 237,695. The estimated volume today was high as you can count on the huge shorting by our master criminal banker JPMorgan and our HFT traders who go along for the ride. The criminals know how to use these day traders to perfection.
Gold closed down today big time due to the massive raid orchestrated by our bankers. They used the cover of Bernanke's speech to congress where the market reacted to what he did not say rather than what he did say. He showed no inclination towards initiating another round of quantitative easing that which he is doing anyway through swaps. The price of gold fell by $46.20 to $1586.60. Silver fell by 95 cents to $28.52.
Today we heard from Fitch which has warned the USA of a further downgrade and then Fitch lowered the boom on Spain clobbering them by another 3 notches to BBB from A minus. We had a tepid Spanish bond auction where little was raised in the 10 year category. Yields hit 6.04% in that auction. In physical news, Kazakhstan announced it has contracted for 22 tonnes of physical gold and that it is now raising its reserves in gold to total reserves from 12% to 15%. Initial claims in the USA came in slightly better even though last week claims were revised higher again. However a huge 104,500 poor souls who had extended benefits for 99 weeks, saw these guys removed from the unemployed category as their benefits ran out. We will go over all of these stories and more but first let us head over to the comex and assess the damage today.The total gold comex OI rose by 3111 contracts from 423,941 to 427,052. The rise in OI provided enough juice for our bankers to initiate the raid. When they also saw the huge rise in OI in silver, they knew that he had to bomb the comex and hope that many gold and silver leaves would fall from their respective trees. The front delivery month of June saw its OI fall from 1846 to 1826 for a loss of only 20 contracts. We had 30 delivery notices filed yesterday so we actually gained another 1000 oz of gold standing. The next delivery month for gold is August and here the OI gained 3677 contracts rising from 234,018 to 237,695. The estimated volume today was high as you can count on the huge shorting by our master criminal banker JPMorgan and our HFT traders who go along for the ride. The criminals know how to use these day traders to perfection.
The total OI for the silver comex probably blew away the bankers. Their decision reached last night, no doubt, was that a raid had to orchestrated as OI was rising and first day notice would be in 3 weeks (on Thursday June 29).The OI rose by a massive 4508 contracts from 116,809 to 121,317. The bankers yesterday provided all the necessary short paper knowing full well that a raid was called for. Do not forget to get front row seats as we watch the delivery front here. The unofficial delivery month of June saw its OI rise from 59 to 60 for a gain of 1 contract despite zero delivery notices filed yesterday. Thus we gained 1 contract or an additional 5000 oz of silver standing for delivery. Speaking of the front July delivery month for silver, we witnessed that its OI fell by only 1234 contracts from 55,594 to 54,360. The key question will be how many of these long holders wish physical now instead of rolling and playing the paper game. The estimated volume today was simply humongous coming in at 89,096. The confirmed volume yesterday was also quite strong at 77,942. It looks like we have two sets of determined players in the silver arena.
and.....
Here is the story on the lower production levels of gold inside South Africa:
UPDATE 1-South African gold output falls 12.8 pct in April
Thu Jun 7, 2012 10:18am GMT
JOHANNESBURG, June 7 (Reuters)
- South Africa's gold output fell by 12.8 percent in volume in April while total mineral production was down 10.6 percent compared with the same month last year, data showed on Thursday.
Production of non-gold minerals was 10.4 percent lower, Statistics South Africa said.
Platinum group metal output contracted 28 percent year-on-year as the sector tried to recover from the impact of a government safety blitz and as Impala Platinum's Rustenburg operation continued a ramp-up from a six-week illegal strike in March.
The world's second largest producer of the precious metal lost 120,000 ounces of output due to the strike in the first quarter of the year and only expected the Rustenburg operations to return to pre-strike levels this month.
UPDATE 1-South African gold output falls 12.8 pct in April
Thu Jun 7, 2012 10:18am GMT
JOHANNESBURG, June 7 (Reuters)
- South Africa's gold output fell by 12.8 percent in volume in April while total mineral production was down 10.6 percent compared with the same month last year, data showed on Thursday.
Production of non-gold minerals was 10.4 percent lower, Statistics South Africa said.
Platinum group metal output contracted 28 percent year-on-year as the sector tried to recover from the impact of a government safety blitz and as Impala Platinum's Rustenburg operation continued a ramp-up from a six-week illegal strike in March.
The world's second largest producer of the precious metal lost 120,000 ounces of output due to the strike in the first quarter of the year and only expected the Rustenburg operations to return to pre-strike levels this month.
and Ted Butler has figured out Chilton is a tool..........
Silver analyst Ted Butler had a few things of great interest posted in his mid-week commentary...and one of them is contained in these three paragraphs below...
"A subscriber asked me to comment on an Internet posting that included an email response that CFTC Commissioner Bart Chilton had agreed be made public. Coincidently, when I received the subscriber’s email, I had been going through a long overdue clean up of old papers on my desk that had accumulated for the past few years. (Yes, I had been ordered to do so). I ran across copies of email correspondence I had with Commissioner Chilton back in March thru May 2008. That correspondence was requested by him to be off the record back then, so I will honor that request and not reveal the details. But the past and present email exchanges contributed to a strong sense of déjà vu."
"In the post referenced above, Chilton indicates that he expects a resolution of the almost four year old silver investigation in the next few months. Similarly, the old email exchange I had with the commissioner occurred just prior to the May 13, 2008 release of the Commission’s 16-page public denial of a silver manipulation. I had first contacted Commissioner Chilton in November of 2007 about issues related to silver manipulation and that had resulted in a private email exchange with him until the May 2008 public letter. After that, there was no further private exchange."
"In addition to the sense of déjà vu in reading what was basically the same message both now and back then, I also had a moment of clarity. Not only had I seen this movie before, I remembered how it ended, namely, with another whitewash report from the CFTC that everything was fine in silver and allegations of manipulation were unfounded. It seems to me that there can be no other outcome this time. There is no way that the agency ever comes out and admits what many thousands of observers know to be true – that the price of silver is manipulated and has been for the past three decades. In other words, it’s time to face reality."
and.....
They following commentary deals with the costs that will be needed to rescue Spain.
Megan Green of Roubini Global Economics believes that Spanish banks will need 250 billion euros closer to the number that we have been telling you while JPMorgan thinks the rescue of Spain will require 350 billion euros or greater. Just one small little question. Where on earth will this money come from? Already, the Chinese sovereign wealth fund has said no to any purchase of European debt:
(courtesy Ambrose Evans Pritchard/UKTelegraph)
Megan Green of Roubini Global Economics believes that Spanish banks will need 250 billion euros closer to the number that we have been telling you while JPMorgan thinks the rescue of Spain will require 350 billion euros or greater. Just one small little question. Where on earth will this money come from? Already, the Chinese sovereign wealth fund has said no to any purchase of European debt:
(courtesy Ambrose Evans Pritchard/UKTelegraph)
Spain Too Big For EU Rescue Fund As China RecoilsAs Spain edges closer to a full sovereign rescue, economists have begun to doubt whether the EU bail-out machinery can raise such large sums funds at viable cost on global capital markets.China's sovereign wealth fund said it will not buy any more debt in Europe until the region takes radical steps to restore credibility.By Ambrose Evans-Pritchard, International business editor8:11PM BST 07 Jun 2012While the International Monetary Fund thinks Spanish banks require €40bn or so in fresh capital, any loan package may have to be much larger to restore shattered confidence in the country.Megan Greene from Roubini Global Economics says Spain's banks will need up to €250bn, a claim that no longer looks extreme. New troubles are emerging daily. The Bank of Spain said on Thursday that Catalunya Caixa and Novagalicia will need a total of €9bn in new state funds.JP Morgan is expecting the final package for Spain to rise above €350bn, while RBS says the rescue will "morph" into a full-blown rescue of €370bn to €450bn over time -- by far the largest in world history."Where is the money going to come from?" said Simon Derrick from BNY Mellon. "Half-measures are not going to work at this stage and it is not clear that the funding is available."In theory, the European Financial Stability Fund (EFSF) and the new European Stability Mechanism (ESM) can raise a further €500bn between them, beyond the sums already committed to Greece, Ireland, and Portugal. "There is sufficient fire-power available. In addition, the EFSF/ESM can leverage resources," said Christophe Frankel, the EFSF's chief financial officer.
It may not prove so easy to convince global investors to mop up large issues of debt. "Our clients won't touch the EFSF because nobody knows what it really is. They have cut it out of their benchmarks altogether," said one bond trader.The Chinese issued their own verdict on Thursday. The country's sovereign wealth fund said it will not buy any more debt in Europe until the region takes radical steps to restore credibility. "The risk is too big, and the return too low," said Lou Jiwei, the chairman of the China Investment Corporation."Europe hasn't got the right policies in place. There is a risk that the euro zone may fall apart and that risk is rising," he told the Wall Street Journal. The EFSF had hoped to sell yuan `Panda bonds' but this may prove hard.Eric Dor from IESEF School of Management in Lille said Spain would have to step out of the EFSF as a creditor the moment it asks for funds. This has instant effects on the residual core. Italy's share rises from 19pc to 22pc, and Italy is in no shape to face extra burdens. France's share rises from 22pc to 25pc, and Germany's from 29pc to 33pc."The credibility of the guarantees given to EFSF bonds would collapse. This would cause an incredible turmoil on the European sovereign debt markets," he said.Mr Dor said it would be wiser to let the EFSF recapitalise Spanish banks directly but Brussels said on Thursday that this would be illegal. Germany has in case blocked any move towards mutualization of eurozone bank costs, fearing a slipperly slope towards eurobonds and debt pooling.Any rescue must be a loan to the Spanish state, even if the money goes to the bank restructuring fund (FROB). The cost will push Spain's sovereign debt even higher. Chancellor Angela Merkel said that she was willing to use the EU's "existing instruments" to tackle the debt crisis. This means use of a precautionary credit line from the EFSF for countries that are deemed healthy but suffering "limited access" to markets.This "decaffeinated" rescue -- as it is known in Spain -- avoids the humiliation of EU-IMF "Troika" inspectors and draconian terms. It is a loan-package with dignity, but it still entails a painful volte-face by premier Mariano Rajoy. He vowed a week ago that Spain would not need external help.The EFSF had trouble raising funds last year. The spread on 10-year EFSF yields over German Bunds reached 177 basis points in November. Moody's said at the time that the EFSF "cannot meaningfully support the euro area's large government bond markets."The fund placed a 3-year bond last week at 1.116pc, compared to 0.15pc for German 3-year debt or 0.69pc for French debt. In effect, the EFSF is already paying a premium, and that was before the Spanish crisis had fully metastasized.The permanent ESM may have more luck when it comes into force next month since it will have €32bn of paid-in capital and a stronger mandate, but it is still bearts the stigma of EMU break-up talk."If they want anybody to the buy the rescue bonds, they should make them redeemable in the German currency on the day of the redemption: let us call them D-Mark bonds," said Charles Dumas, head of Lombard Street Research
The EFSF's Mr Frankel told Euromoney that the financial media was "biased towards the Anglo-Saxon approach" and had not properly taken into account the great improvent in the current account deficits of Club Med states.Perhaps, but it is China, Japan, and Saudi Arabia he has to worry about.
and....
And Here Is Today's Market Moving Soundbite Du Jour
Update 2: In her own words - dispelling rumors of new instruments: "In view of the current difficulties, it’s important toemphasize that we have created the instruments of support in the euro zone, that Germany is ready to work withthese instruments whenever that is necessary and that this is an expression of our firm desire to keep the euro area stable,”
Update: here is the counterrumor, just as expected courtesy of the summer and fall of 2011: Merkel willing to back use ofEXISTING Euro-area instruments... Where Euro-Bonds just happen not to figure.
Just out from Bloomberg:
- MERKEL SAYS GERMANY READY TO BACK USE OF EURO-AREA INSTRUMENTS
Ignore that it is unclear what instrument is mentioned (not Euro Bonds as Merkel made very clear 48 hours ago), she probably just is referring to the Redemption Pact, which she would of course be in favor of, as noted before, and where Europe funds its loan-loss exposure with gold. We look forward to the PIIGS agreeing to hand over their gold to Das Deutsche Pawn Shop. Also ignore that in the same speech she said:
- MERKEL SAYS NO SINGLE RESPONSE WILL SOLVE THE CRISIS IN EURO
- MERKEL SAYS WILL TAKE `FEW YEARS' TO RESOLVE EURO CRISIS
- MERKEL SAYS PEOPLE `MUST BE PATIENT' ON EURO CRISIS
None of this matters: with an all time record number of EURUSD short, it is a one way panic out of the burning theater, just as we predicted on Sunday: the EURUSD is now well over 200 pips higher from our entry point, and half way to the 400-500 bps upside target.
and.....
-- Posted Thursday, 7 June 2012 | | Source: GoldSeek.com By Gordon T Long  The SS €uro is taking serious water. At the hastily called EU Summit Captains meeting on the Brussels Bridge, it was agreed that the best course of action, despite the worsening waves of bank runs, was to simply instruct the orchestra to continuing playing the same old familiar tune and order the rearrangement of the deck chairs.
However, all the captains somberly recognized there were neither sufficient lifeboats nor anyone willing to come to their rescue. As usual they were in complete disagreement on what to do, they knew they had insufficient resources for anything dramatic and they were well aware the public passengers had no tolerance for any cold water austere attempts for the sake of survival.
The EU banks runs have been steady and consistent. Deposits have been relentlessly fleeing the peripheral countries and heading for the safety of deposit at German banks, and to a lesser extent French banks. Meanwhile the banks in turn were depositing money at the ECB for their own safety.
 
Not all money however is ending up at the ECB or anywhere in Europe for that matter. Needed capital to restart growth is presently heading for the safety of the US Dollar and US Treasuries.
The 10 Year US Treasury Note hit a 120 year low when it touched 1.48%. Dramatically down from a recent high of 2.30%, as the European situation worsened based on troubling European election results. Investors are willing to accept real negative returns for the sake of perceived safety. Even Germany last week could float Bunds with a zero coupon.
A strengthening dollar is not good for a US stock market denominated in US dollars. It now takes fewer dollars to buy the same basket of stocks and US markets are down 9%.
How long will this go on? The short answer is: "Until the inevitable printing begins once again."
That moment appears close, but we aren't quite there yet. More pain and more time are required to give the money printers the cover they require, lest they ignite the hyperinflation rocket prematurely.
ALL HOWEVER IS NOT AS IT APPEARS
 As simple as the above scenario appears on the surface, like the iceberg that has been struck, there is significantly more below the surface. With the ship taking water at countless points the best that the Captains can determine is to place the inadequate bilge pumps near the most critical holes.
1- SOMETHING SMELLS IN THE US TREASURY MARKET
The JP Morgan trading debacle gives us the best view of the what is going on below the waterline. Still answering questions about the mysterious disappearance of the $600B from MF Global, JP Morgan is now under investigation for what is being represented as minimally a $2B Credit Default Swap trading mistake. CEO Jamie Dimon doesn't react the way he did, if this was all there is to it. The issue appears to be centered in the Interest Rate Swap market. A market that JP Morgan holds a notional positions in of $57.5 TRILLION, of their $72 TRILLION total of Derivative Swaps. MF Global was apparently on the wrong side of the Greek Debt trade. Is JP Morgan more egregiously on the wrong side of the EU Debt trade?
The sudden surge in March of the 10 year US Treasury surging to 2.30% caused serious losses to someone in the Interest Rate Swaps market. Considering JP Morgan IS the Swaps market there is a good likelihood they got hit. With the massive fluctuations in Europe it stands to reason there would be equally if not larger problems there also.
What needs to be pointed out is that during these historic events the Euro has not tanked and the US Dollar has only got stronger. Something doesn't compute somewhere when we consider that sovereign debt supply is through the roof and there is a dearth of buyers. The US Treasury is not moving up (in price) solely because of European flight to safety. There is too much supply and European banks are simply too illiquid. There is a huge Tens-of-$Trillions Swaps game going on, JP Morgan is at the center of it and EU debt crisis is entangled in it.
The Bank of International Settlement (BIS )is reporting the latest quarter ending December 31st, gross market values , which measure the cost of replacing existing contracts, increased to $27.3 Trillion. This was driven mainly by an increase in the market values of Interest Rate Swap contracts. The rise in gross market values was the largest since the second half of 2008.
Counterparty risk is at the highest level since 2008 at $3.9 Trillion.
Something is breaking somewhere? I suspect the SS €uro bilge pumps are not even close to handling these sorts of gushers?
2- EU BANK LOAN-TO-DEPOSIT RATIOS ARE THE ARCHILLES HEEL
To put the bank runs in perspective, we need to be reminded that bank Loan-to-Deposit ratios in Europe are blatantly obscene and are 3 times more than the US banks. Many are over 100% and some over 200%.
I often complain about the Chinese banking system as corrupt. They are paragons of prudence at 65-70%, compared to the bandits in control of the established European banking cartel.
 
3- INSUFFICIENT "QUALITY" COLLATERAL AVAILABLE
Banks are now out of quality collateral and the deposit runs are consequentially even more devastating. Quality banks are getting dragged into the problem. Clients are reporting that getting their hands on their segregated gold holdings at some Swiss banks is suspiciously difficult and delayed. Why segregated gold?
  The SS-€uro is now taking on serious water and she barely has her Bow above water.
Though we have reached our target support levels in the S&P 500 for sort attempt at a rally, market crashes usually start from oversold conditions, as punished buyers have already abandoned ship.
This is deep global waters and there is a long ways down before the SS€uro possibly settles.
and....
This Fed Vice Chair wants a stimulus and thus additional balance sheet action:
(courtesy zero hedge) Fed Vice Chair Yellen Says Scope Remains For Further Policy Accommodation Through Additional Balance Sheet Action
That former San Fran Fed chairman Janet Yellen would demand more easing is no surprise: she used to do it all the time. That Fed Vice Chairman, and Bernanke's second in command, Janet Yellen just hinted that she is "convinced that scope remains for the FOMC to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions", and that "while my modal outlook calls for only a gradual reduction in labor market slack and a stable pace of inflation near the FOMC's longer-run objective of 2 percent, I see substantial risks to this outlook, particularly to the downside" is certainly very notable, and confirms everyone's worst dream (or greatest hope assuming they have a Schwab trading platform or Bloomberg terminal) - more cue-EEE is coming to town.
And since there is an entire section dedicated to "The Rationale for Highly Accommodative Policy", here it is, in word cloud format:
Note the prominence of the word Taylor? That's because Yellen uses none other than John Taylor and his famous rule to validate her theory that more easing is needed. The same John Taylor who, two months ago, essentially said the Fed were a bunch of trained monkeys for keep ZIRP as long as they have, and warning that Bernanke's infinte meddling in capital markets will destroy us all. Read "The Dangers of an Interventionist Fed. A century of experience shows that rules lead to prosperity and discretion leads to trouble" by John Taylor.
You just can't make this up.
and.......
The Big Lie
Wolf Richter www.testosteronepit.com
Since the lousy jobs report last Friday, there has been a veritable orgy of Fed Speak with juicy morsels and contradictions, interspersed with leaks and rumors, that climaxed today with Chairman Ben Bernanke’s words of wisdom before the Congressional Joint Economic Committee. It whipped markets into a frenzy, drove the Dow up 500 points, knocked yields into historic basements, and caused gold, the safe-haven investment, to bounce up and down like a rubber ball. All this was peppered with the impending collapse and bailout of Spanish banks and an endless litany of other problems in the Eurozone whose miasma is drifting across the Atlantic and might infect the presidential campaign.
Yet Bernanke wasn’t totally gung-ho about more Quantitative Easing. The “economy must be monitored closely,” he said instead of promising the immediate restart of the printing press. On Tuesday, it was Richard Fisher, President of the Dallas Fed, who came out swinging against more quantitative easing despite the “hue and cry of financial markets.” He blamed the federal government for lack of direction in its tax and spending policies that leave businesses mired in uncertainty. The same day, James Bullard, President of the St. Louis Fed, didn’t think the jobs situation and the broader economy was bad enough for the Fed to pile into another round of ineffectual QE—maybe they were trying to stay out of a political minefield. Read....Squeezing the Fed from both Sides.
On Wednesday, Vice Chair Janet Yellen took the opposite tack. Citing the still dismal job and housing markets, she pushed for more QE and more interest rate manipulation for an even longer period, probably for all times to come—ironically because the job and housing markets are precisely the markets that have notrecovered since the Fed started its QE programs and zero-interest-rate policy (ZIRP) in December 2008, along with its massive corporate and bank bailouts.
The effect of the Fed’s policies on the job market can best be seen through the Employment-Population ratio, which measures the percentage of people age 16 and older who have jobs. It’s not perfect. But it’s the least corrupted employment number out there: it’s not seasonally adjusted, manipulated by the infamous “Birth Death Adjustment,” or mucked up in other ways. After peaking in April 2000 at 64.7%, it now hovers near its 30-year low—despite, or because of, the Fed’s policies:
The beneficial impact of QE and ZIRP on the housing market can best be seen through the Case-Shiller 20-City Composite home price index. Note the new multi-year low at the end of the line—despite the Fed’s gyrations and manipulations, and despite record low 30-year mortgage rates:
So, how can anyone still couch the justification for QE and ZIRP in fatuous language of job creation and housing market recovery? The Fed employs an army of number-crunchers who know all this. Yellen and Bernanke also know that the impact of QE and ZIRP on jobs and housing, as well as on the broader economy, has been nil, or even a negative.
However, QE and ZIRP have had a colossal impact, and not just on the financial markets and the status-quo banking system that caused the financial crisis, and on capitalism and free markets as a whole, which no longer exist, but also on the real economy.
A friend of mine is a partner at a restructuring firm. Their specialty was to take companies that were cratering and restructure them back to health. Typically, they were paid by creditors that had ended up with these companies. But a couple of years ago, his firm had to reinvent itself. With boundless amounts of money floating through the system, and with yields being so low, creditors had become enamored with “extend and pretend” where, instead of recognizing losses on these defunct loans, they would simply offer forbearance agreements, issue new loans, and pretend everything was fine.
These companies are still out there, un-restructured, burdened with even more debt, and losing even more money. The rejuvenation and cleansing process that debt-fueled capitalism needs from time to time to get rid of management deadwood, too much debt, and other problems, and that wipes out equity holders and makes creditors come to grips with reality, has not taken place. The energy and job growth that would normally sprout from the ashes have mostly faltered. And my friend, to stay relevant, became an expert in performance improvement to help entrenched management stay in place.
While preventing the economy from going through its necessary cleansing process—and the heavy losses associated with it—the Fed’s policies have in spectacular fashion enabled Congress to run up gargantuan deficits year after year that make the Eurozone, now ravaged by a debt crisis, look virtuous. Sen. Jim DeMint, a South Carolina Republican, tried to politely nudge Chairman Bernanke on that, but he shrugged it off. And Congress will once again shrug off Bernanke’s suggestion that it needs to come up, as he said, with a “sustainable” deficit—a term that has replaced the concept of “balanced budget.”
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