Can Bernanke Scram in Time? That is the question.
I like commercial, peaceful nuclear reactors and I also like money. But today, I want to compare the Chernobyl reactor disaster with the disaster that Ben Bernanke is continuing to prepare at the Federal Reserve Bank. I am going to make an analogy between what happened at the Chernobyl nuclear power plant and what could possibly happen to the economy due to the experiments that Ben is conducting at the Federal Reserve.
Like all analogies, they only go so far. But hear me out and I think you might get what I am suggesting.
Engineers at the Chernobyl power plant wanted to conduct an experiment to see how long one of the turbines could continue to power the coolant pumps to the reactor after the steam was shut off to the turbine. The experiment was scheduled for the afternoon of January 25th, 1986, but continuing electrical demand forced the plant manager to postpone the test for 9 hours.
The plan was to stabilize the power output from the reactor at 700 - 1000 megawatts thermal (MWt). However, due to an error the reactor output dropped to 30 MWt. The operators disabled some of the safety systems and withdrew the control rods and some of the manual control rods to get the reactor back to 200 MWt. Xenon, a fission product created in the reactor, was working against them, since it absorbs neutrons that support the nuclear chain reaction.
In this condition, the RBMK reactor was dangerously unstable, as events proved. The operators were apparently ignorant of this.
The test commenced at this point with the turbine powering the coolant pumps. As the turbine lost momentum, the water pressure in the coolant circuit decreased. This, coupled with the positive void coefficient of the RBMK reactor caused a dramatic increase in the power level. Thirty six seconds later the operators hit the scram button.
(Aside: The scram button is an emergency control that is designed to quickly cause all the control rods to be inserted into the reactor and stop the fissioning of the fuel. The control rods absorb the neutrons that are causing the chain reaction in the nuclear fuel, thus stopping the reactor.)
The act of inserting the controls may have also caused the power of the reactor to rapidly increase, since the bottom of the rods was actually graphite, which displaced the water in the reactor and increased the reactivity in the reactor.
In either case, the control rods never made it very far into the reactor. As the power soared, the fuel channels were damaged by the increasing heat and the reactor lid was dislodged, preventing the insertion of the rods. Steam and hydrogen explosions quickly followed, which along with an ensuing fire, dispersed tons of reactor fuel into the environment.
You can read a detailed blow by blow of the accident here.
Here is my analogy:
I suggest to my readers that Ben Bernanke is conducting an impromptu experiment with the economy analogous to the disastrous Chernobyl experiment of 26 years ago.
The economy is stuck at low levels, just like the RBMK reactor was stuck at low power levels by the neutron absorbing Xenon. The economy is stuck at low levels by Obama-care, zillions of regulations and other constant interventions into the operation of the free market, including a fundamentally flawed fractional reserve banking system. (Krazy Keynesians, including Ben Bernanke, rule the economic roost.)
Ben is pulling out all the control rods, including the manual control rods to try to get the economy going again. QE1, QE2, and QE3 are the control rods along with a hundred other ways Ben is creating liquidity and providing funds (creating money, ex-nihilo, out of nothing) for stimulus spending.
Because of this, the economy is operating in a dangerously unstable regime, just like Chernobyl on that fateful day in 1986. Since 2008, Ben has increased the FED's balance sheet from about $900 billion to $2.8 trillion, with still not much economic output. He is waiting for signs in the uptick of the economy, just like the Chernobyl operators watched for reactor power increases.
He says he can unwind the position of the FED, but he might find out, just like the operators did at Chernobyl, that his goose is already cooked. Indeed, it is possible that the very act of scramming the reactor was the most proximate cause of the disaster. Maybe Ben will find out that the very act of unwinding the liquidity causes a financial Chernobyl style meltdown?
The financial disaster is primed and waiting for reality.
Most likely, the controls rods cannot be inserted in time to stop the reaction. The reactor is probably already damaged before the scram button is ever activated. Ben, beware of the scram button!
(Aside: The RBMK was a bad reactor design from the beginning, just like the Federal Reserve Banking System is a bad banking system, from the beginning. That doesn't mean that there are not reliable, clean, and inherently safe nuclear reactors, like the LFTR, or that there are not honest, good monetary and banking systems, like Honest Money and the Gold Standard. End Aside)
I like commercial, peaceful nuclear reactors and I also like money. But today, I want to compare the Chernobyl reactor disaster with the disaster that Ben Bernanke is continuing to prepare at the Federal Reserve Bank. I am going to make an analogy between what happened at the Chernobyl nuclear power plant and what could possibly happen to the economy due to the experiments that Ben is conducting at the Federal Reserve.
Like all analogies, they only go so far. But hear me out and I think you might get what I am suggesting.
Engineers at the Chernobyl power plant wanted to conduct an experiment to see how long one of the turbines could continue to power the coolant pumps to the reactor after the steam was shut off to the turbine. The experiment was scheduled for the afternoon of January 25th, 1986, but continuing electrical demand forced the plant manager to postpone the test for 9 hours.
The plan was to stabilize the power output from the reactor at 700 - 1000 megawatts thermal (MWt). However, due to an error the reactor output dropped to 30 MWt. The operators disabled some of the safety systems and withdrew the control rods and some of the manual control rods to get the reactor back to 200 MWt. Xenon, a fission product created in the reactor, was working against them, since it absorbs neutrons that support the nuclear chain reaction.
In this condition, the RBMK reactor was dangerously unstable, as events proved. The operators were apparently ignorant of this.
The test commenced at this point with the turbine powering the coolant pumps. As the turbine lost momentum, the water pressure in the coolant circuit decreased. This, coupled with the positive void coefficient of the RBMK reactor caused a dramatic increase in the power level. Thirty six seconds later the operators hit the scram button.
(Aside: The scram button is an emergency control that is designed to quickly cause all the control rods to be inserted into the reactor and stop the fissioning of the fuel. The control rods absorb the neutrons that are causing the chain reaction in the nuclear fuel, thus stopping the reactor.)
The act of inserting the controls may have also caused the power of the reactor to rapidly increase, since the bottom of the rods was actually graphite, which displaced the water in the reactor and increased the reactivity in the reactor.
In either case, the control rods never made it very far into the reactor. As the power soared, the fuel channels were damaged by the increasing heat and the reactor lid was dislodged, preventing the insertion of the rods. Steam and hydrogen explosions quickly followed, which along with an ensuing fire, dispersed tons of reactor fuel into the environment.
You can read a detailed blow by blow of the accident here.
Here is my analogy:
I suggest to my readers that Ben Bernanke is conducting an impromptu experiment with the economy analogous to the disastrous Chernobyl experiment of 26 years ago.
The economy is stuck at low levels, just like the RBMK reactor was stuck at low power levels by the neutron absorbing Xenon. The economy is stuck at low levels by Obama-care, zillions of regulations and other constant interventions into the operation of the free market, including a fundamentally flawed fractional reserve banking system. (Krazy Keynesians, including Ben Bernanke, rule the economic roost.)
Ben is pulling out all the control rods, including the manual control rods to try to get the economy going again. QE1, QE2, and QE3 are the control rods along with a hundred other ways Ben is creating liquidity and providing funds (creating money, ex-nihilo, out of nothing) for stimulus spending.
Because of this, the economy is operating in a dangerously unstable regime, just like Chernobyl on that fateful day in 1986. Since 2008, Ben has increased the FED's balance sheet from about $900 billion to $2.8 trillion, with still not much economic output. He is waiting for signs in the uptick of the economy, just like the Chernobyl operators watched for reactor power increases.
He says he can unwind the position of the FED, but he might find out, just like the operators did at Chernobyl, that his goose is already cooked. Indeed, it is possible that the very act of scramming the reactor was the most proximate cause of the disaster. Maybe Ben will find out that the very act of unwinding the liquidity causes a financial Chernobyl style meltdown?
Regardless, Ben thinks he can control this financial experiment and manipulate the economy so it does what he wants. This is what is known as "Fatal Conceit".
This is what Gary North says about Ben's experiment"
We know that the Federal Reserve has tripled the monetary
base. The only thing that is keeping the monetary base from being converted
into rising prices is the fact that commercial banks still are not lending.
Instead, they hold approximately $1.7 trillion as excess reserves at the
Federal Reserve. Bankers remained frightened of the recovery, so they are
content to receive an interest rate of one quarter of one percent per annum on
excess reserves.
The financial disaster is primed and waiting for reality.
Most likely, the controls rods cannot be inserted in time to stop the reaction. The reactor is probably already damaged before the scram button is ever activated. Ben, beware of the scram button!
(Aside: The RBMK was a bad reactor design from the beginning, just like the Federal Reserve Banking System is a bad banking system, from the beginning. That doesn't mean that there are not reliable, clean, and inherently safe nuclear reactors, like the LFTR, or that there are not honest, good monetary and banking systems, like Honest Money and the Gold Standard. End Aside)
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