Writes Gary:

Schiff makes a good pointThe most obvious fear the trio must address is that oversized deficits will persist indefinitely. Reading from a carefully scripted rebuttal book, all three proclaim that as soon as the stimulus revives our economy, the government will take all necessary steps to rein in the deficits that result. Bernanke’s testimony showcases this rhetorical shift. The Fed Chairman claimed that catastrophe has been averted and that the recession is nearly over. As a result, he advised Congress to now focus on debt management. How he expects them to do that was left unexamined.

Bernanke also says the FED can and will reduce the monetary base.

But he knows Congress will not stop spending.

And Congress ought to know that the FED has no buyers of its assets at today’s low interest rates. It can’t unload its excess assets, thereby reducing the monetary base, without bringing on the second stage of today’s recession — the whopper.

It’s a Punch & Judy show for investors in government debt: China first, then the folks at home.

The Best of Llewellyn H. Rockwell, Jr.