Ben Bernanke spoke on the Hill today. You already know I’m not a fan of anything he has done. This is the man that oversaw the lenders. He enabled lenders to hand out money to people that couldn’t afford the first payment. This is a man that saw nothing bad coming in the housing, lending and financial debacle. And this a man whose only answer to problems that were caused by too much leverage and debt…is just adding more leverage and debt. On Capitol Hill today, it reminded me of “One Flew Over the Cuckoo’s Nest in which they’re sitting around the table playing poker.


Chuck Schumer, a Senator from New York, another miserable political failure, was almost begging Bernanke for more stimulus. Questions from some of the other people, both Republican and Democrat made absolutely no sense whatsoever.

But the one thing I was thinking about with not only Bernanke, but Obama and Geithner? They’re all taking credit for saving the day and for saving GM and saving the country from depression. And they give no credit to the people of this country working their rear ends off. And I’m thinking to myself, everything that has occurred over the past 3 ½ years was at a cost of $8 to $9 trillion. You take the $5 -$6 trillion of deficit spending that Obama has done. And then add the few trillion that Bernanke has printed to order to buy bonds so that interest rates are lower, so loans are lower…so we can juice the economy back up. But everything’s at a cost. There’s a problem. That’s all payback. The next 6 years of taxpayer dollars have already been spent. There is no way we recover from that. Count to 25. Ooops…$1 million was just added to the deficit.

The trillions of dollars of deficits that have occurred in the past 3 ½ years really started under George W. Bush. Before George Bush, deficits were under control. We were hit by 9-11 and George Bush did a great job of getting the economy back on track because he did the opposite of Barack Obama. He did a little stimulus. But mostly, he lowered taxes amongst a few other things. But then he went on a spending binge and people like John Boehner who are now beside themselves about the horrible spending of Barrack Obama, didn’t say a word about the spending under George Bush. And, of course, Barack Obama campaigned and said that “under my watch I will not treat your tax dollars like Monopoly money and I will go line by line through the budget.”

He lied. Everything he represented himself as, was a lie.

So…at what cost? There’s $5 to $6 trillion that Obama spent that the government never received… that will have to be paid back.

And speaking of Bernanke, Bernanke talked about the things he has done that has helped the economy. He has been the worst possible person for the economy. Do any of you believe that it’s because of him that the economy came back from ’08? No, it’s because it’s the 200 million of us that go to work every day. It had nothing to do with him.

It’s us. And now we get to listen to this stuff and now, at what cost?

In just the past 3.5 years, $5 to $6 trillion of our taxpayer dollars that have not even been earned yet is gone and will never do anything for anybody. I was just marveling at the abysmal failures in Washington DC, on TV in plain sight. Everyone of them – abysmal moronic failures that have brought us to this point of $15 to $16 trillion in debt.

And some of them are running victory laps.

And then I watched Bernanke say, it really doesn’t cost anything. He said that by buying Treasury Securities, it puts upward pressureon the prices of those securities and downward pressure on the yields – without affecting overall the size of the Federal Reserve’s balance sheet?

That’s a lie. The balance sheet of the Fed has exploded. He did it by printing money. And it’s sickening to watch. And it’s just doubly sickening to watch this president campaigning for another four years based on nothing he did over the past 3 ½ years. What is he going to say?

“Vote for me because I increased the deficit by $5 1/2 to $6 trillion.”

The Economy

Lastly, there is a group of people in my industry that are going around saying that our economy is in a depression. There’s a good amount of them that are out there saying that we’re in a recession.

Now let me be clear on my thoughts.

We’re not in a depression. We’re not even close. If the economy was in a depression, the Dow would be at 6000.

I don’t know what these people are trying to sell you. But we’re as far away from a depression as a depression can be, especially if they’re trying to compare today to the 1930s.

And we’re not even in a recession. A recession is defined by two quarters of down GDP in a row. We haven’t had one.

What we’re in is an anemic muddle through economy. It’s not good news. We need a lot better. Unfortunately, some are just trying to sell books. Have you ever seen a book written with the title ” MARKET IN TRADING RANGE!”? No…it’s always DOW 36,000 or THE NEXT GREAT DEPRESSION. Don’t buy into any of it.


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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.

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