What Exactly IS QE3 and What Does it Mean For You?

Mandeville, LA – Exclusive Transcript – Let me update you on this QE3…  With all the discussion that we’re having about Libya today and with foreign policy and whether Mitt jumped the gun or whether he did not, the real tragedy and travesty, or I shouldn’t say the real, the other tragedy and travesty is that when you go to work today, unless your boss comes in and tells you, “Hey, Bernyankme is printing money today.  He’s juicing the stock market.  Smithers, you get a raise,” unless your wage today gets adjusted to the massive inflation that’s coming our way, you’re earning less than you were yesterday. Check out the rest in today’s transcript…

 

Begin Mike Church Show Transcript

Mike:  Let me update you on this QE3 — do we have the Bernyankme we’re going to seed the stock market clouds and that’s going to make people go out and buy a new DVR digital media file?  Folks, you’ve got to hear this.  I want you to just think about this for a moment.  With all the discussion that we’re having about Libya today and with foreign policy and whether Mitt jumped the gun or whether he did not, the real tragedy and travesty, or I shouldn’t say the real, the other tragedy and travesty is that when you go to work today, unless your boss comes in and tells you, [mocking] “Hey, Bernyankme is printing money today.  He’s juicing the stock market.  Smithers, you get a raise,” unless your wage today gets adjusted to the massive inflation that’s coming our way, you’re earning less than you were yesterday.

It’s even worse than that, though.  If you have savings, if you have money tied up in anything other than a stock market account today, it is getting clobbered because of this quantitative easing, this printing of money out of thin air.  As a matter of fact, several of you sent to me a video of Ron Paul being asked about this yesterday.  We’ll hear Bernyankme and then I’m going to play Congressman Paul’s response.  Folks, if you have senior citizens in your family and they’re on a fixed income, this is the worst news you could ever hear.  Think about this.  This is an admission that central economic planning has not worked so far.  So what are we going to do to fix it?  We’re going to have more central economic planning, just as Libya is evidence that our micromanagement of the Middle East doesn’t work and isn’t going to work.  What is the response?  Let’s double down and do more of it.  Here’s Bernyankme, Fed Chairman yesterday, and yes, he is a Bernyankme, talking about and announcing quantitative easing part three.  Folks, this is basically, if we still had paper money that they printed and put into circulation to inflate it and they did not have the ability to just transfer it digitally, the printing presses would be running.  They’d have to bring new printing presses in to pull this off.

[start audio clip]

Ben Bernanke:  While low interest rates do impose some costs, Americans will ultimately benefit most from the healthy and growing economy that low interest rates help promote.  Incoming data confirmed that the modest pace of growth continues to be adequate to generate much progress on unemployment.  As the skills of the long-term unemployed atrophy and as their connections to the labor market wither, they may find it increasingly difficult to get good jobs to their and their families’ cost, of course, but also to the detriment of our nation’s productive potential.  It isn’t growing fast enough to make significant progress reducing the unemployment rate.  Fewer than half of the eight million jobs lost in the recession have been restored.  At 8.1 percent, the unemployment rate is nearly unchanged since the beginning of the year and is well above normal levels.  The program of MBS purchases should increase the downward pressure on long-term interest rates more generally but also on mortgage rates specifically, which should provide further support for the housing sector by encouraging home purchases and refinancing.  As we look back at the last six months or so, we’ve seen unemployment basically the same place it was in January.  We’ve seen not enough jobs growth to bring down the unemployment rate.  What we need to see is more progress.  That’s what we’ll be looking at.  While low interest rates do impose some costs, Americans will ultimately benefit most from the healthy and growing economy that lose interest rates help promote.

[end audio clip]

Mike:  Stop me from crying.  We’ve had low interest rates, almost zero percent for four years.  It doesn’t work.  There’s another part of this that was not contained in that digital media file, but I have the transcript of it.  Where Bernyankme says, [mocking] “Don’t worry, because when you have low interest rates, it’s going to make you feel good, warm and fuzzy all over about your financial situation, that’ll make you go out and buy a new television.”  Listen to this.  This is from ZeroHedge.com, “The Punchline In His Own Words: Bernanke Advocates Blowing Asset Bubbles As The Antidote to Depression.”  So we have an admission that central economic planning doesn’t work.  We have an admission that lowering interest rates does not grow the economy.  By your own admission, Chairman Bernanke, it doesn’t work.  What you’re saying is we need to do more of it?  Let’s double down and do it again?

The worst part of this is the inflation that this causes and is going to cause.  The asset bubble that’s going to be blown up is going to explode.  People are not going to obtain long-term jobs.  You’re not going to obtain long-term economic growth or jobs out of this because you’re discouraging saving them.  Only a fool would put their money into savings.  You’re going to devalue it every month when you put $40 billion or new currency out there, $40 billion with a B.  Future investment is nil.  No one will save any money.  This absolutely decimates the incentive to save.  You need savings.  It’s called capital.  You need capital to have a recovery.  What this madman is doing is saying all our friends and buddies on Wall Street will save us.  Here, a question from the press conference yesterday.  Reuters’ Pedro da Costa asking:

[reading]

Pedro da Costa: My question is — I want to go back to the transmission mechanism, because speaking to people on the sidelines of the Jackson Hole conference, that seemed to be the concern about the remarks that you made, is that they could clearly see the effect on rates and they could see the effect on the stock market, but they couldn’t see how that had helped the economy.  So I think there’s a fear over time that this has been a policy that’s helping Wall Street, but not doing that much for Main Street.  So could you describe in some detail, how does it really different — differ from trickle-down economics, where you just pump money into the banks and hope that they lend?

Bernanke: Well, we are — this is a Main Street policy, because what we’re about here is trying to get jobs going.  We’re trying to create more employment.  We’re trying to meet our maximum employment mandate, so that’s the objective.  Our tools involve — I mean, the tools we have involve affecting financial asset prices, and that’s — those are the tools of monetary policy.

[end reading]

Mike:  I can’t believe I’m reading this.  That’s not your tools.  That’s not your mandate.  Go back to your 1913 charter, sir.  The creation and the existence of the Federal Reserve is supposed to stabilize, of course that’s a lie, the economy and stabilize the value of the dollar.  The dollar is worth, today, or yesterday rather, six cents.  It has devalued 94 percent since 1913.  It has devalued 81 percent since Bretton Woods and Richard Nixon took us off the gold standard completely in August 1971, 81 percent devaluation.  It’s going to get worse.  You’re going to need a wheelbarrow to go buy a loaf of bread.

[reading]

Bernanke: There are a number of different channels — mortgage rates, I mentioned other interest rates, corporate bond rates, but also the prices of various assets . . . stock prices — many people own stocks directly or indirectly.  The issue here is whether or not improving asset prices generally will make people more willing to spend.

[end reading]

Mike:  The problem is, why we don’t have a robust economy, is you people won’t spend your money.  Bernyankme is going to inflate certain assets so you’ll think that spending your money is a good idea.  From his mouth to you, this is what he said:

[reading]

There are not enough people coming and demanding their products.  And if people feel that their financial situation is better because their 401(k) looks better or for whatever reason — their house is worth more — they’re more willing to go out and spend, and that’s going to provide the demand that firms need in order to be willing to hire and to invest.

[end reading]

Mike:  So we’re going to inflate the value of people’s homes and stocks and make them think that they’re well off.  Then in turn, they’re going to go out and spend the funny money that they just printed and all is going to be right with the world.  Gumdrops and lollipops will fall from the sky.  If this actually works and it’s so easy to do, Bernyankme and the rest of you central economic planners out there, why stop at a measly $40 billion a month?  Why not buy $4 trillion a month?  Just imagine.  While you’re at it, let’s do Judson Phillips’ idea from the Tea Party Express and let’s use some of that money to build battleships.  If we can build a battleship and that causes employment and causes people to spend money, just imagine what we can do if we take the battleship out into the middle of the Atlantic Ocean and sink it.  Then we have to build another one.  Man, before you know it, it’ll look like Oz up in here.  It’ll be the Emerald freaking City.  The streets will be paved with rubies.

I can’t believe that he’s going to get away with this.  I also can’t believe that this — this should be the number one campaign issue today.  Governor Romney, if elected, what would you do with Ben Bernyankme?  I’d fire him, that’s the appropriate response.  I would kneecap the Federal Reserve and tell them to start reclaiming that money.  We need to let the market reset interest rates.  That’s what businessman Romney ought to be out there saying.  I’d love to hear that from Mitt, wouldn’t you?  Since I didn’t hear it from Mitt, I heard it from Ron Paul.

[start audio clip]

Ron Paul:  The one thing that Bernanke has not achieved that frustrates him, I can tell, is he gets no economic growth.  He doesn’t do anything with the unemployment numbers.  From my viewpoint, I think the country should have panicked over the fact of what the Fed is saying, that we’ve lost control and the only thing we have left is massively creating new money out of thin air, which hasn’t worked before and it’s not going to work this time.

[end audio clip]

Mike:  The country should panic.  I think that’s worth one more play.

[start audio clip]

Ron Paul:  The one thing that Bernanke has not achieved that frustrates him, I can tell, is he gets no economic growth.  He doesn’t do anything with the unemployment numbers.  From my viewpoint, I think the country should have panicked over the fact of what the Fed is saying, that we’ve lost control and the only thing we have left is massively creating new money out of thin air, which hasn’t worked before and it’s not going to work this time.

[end audio clip]

Mike:  We have lost control, the congressman says.  Yeah, folks, we’ve lost control.  God help us.

End Mike Church Show Transcript