Last week, published comments by Israeli Prime Minister Ehud Olmert regarding the likelihood of war between the U.S. and Iran caused the price of oil to surge to roughly $138 a barrel — and the Dow to shed nearly 400 points.

It’s actually worse than this chart would lead us to believe.

Delphic utterances delivered today by Federal Reserve commissary Ben Bernanke, and Timothy Geithner of the Federal Reserve Bank of New York prompted a mild market rally and lent some transient luster to the ever-depreciating greenback.

Rarely have we been able to witness, within such a compressed time-frame, such a compelling illustration of the fact that the economic destiny of our respective households is controlled by people over whom we exercise no controlling authority.

Bernanke’s comments suppurated Panglossian self-approval: Thanks to his own inspired decisions, insisted Bernanke, “The risk that the economy has entered a substantial downturn appears to have diminished.”

Olympian utterances of this kind, which are considered self-ratifying, usually generate an economic placebo effect, and Bernanke’s comments did conjure up an exceptionally modest market rally.

But there are limits even to the investor class’s capacity for self-deception. At some point they’re going to have to stop admiring the beautiful plumage and admit that the damn parrot is dead — no matter how many times Bernanke reaches over and shoves the cage to make the bird’s lifeless body twitch.

I’m betting that moment will come sometime after suitable provision has been made to bail out the major investment houses at the expense of those who actually work for a living.

And this brings us to the subject of Timothy Geithner’s speech — which was probably thrashed out in consultation with like-minded Mandarins at last week’s Bilderberg meeting.

In his address to the Economic Club of New York, Geithner, a major architect of the Fed’s taxpayer-backed $29 billion rescue of the fatally illiquid Bear Stearns investment house, left no self-admiring plaudit unspoken, no hymn to his own prudence unsung.

“Although we assumed some risk in this transaction,” Geithner declared, “that risk is modest in comparison to the risk of very substantial damage to the financial system and the economy as a whole that would have accompanied [Bear Stearns’] default.”

It must first be understood that the “risk” referred to here is not to Geithner or anybody else in the world of elite finance, but rather to the working class, who will eventually absorb the costs of the Fed-backed buyout of Bear Stearns.

The same is true of any other investment bank that partakes of the Fed’s beneficence — with Lehman Brothers apparently moving to the head of the queue. When he referred to the possibility of “substantial damage” to the economy had Bear Stearns collapsed, Geithner understated the potential catastrophe by at least an order of magnitude.

A Bear Stearns melt-down could well have ignited the derivatives market, with literally apocalyptic consequences for the world economy. Be not deceived: The derivatives market is going to burn. The Fed is simply trying to contain the damage long enough to ensure that what remains of the Middle Class will be the first fed to the fire.

This is the point of the “reform” proposed by Geithner in his speech and an op-ed published in the Financial Times. Geithner’s arrangement would put the Fed in charge of a “unified regulatory framework” for the global financial system, and making permanent “some of the new liquidity facilities put in place during the credit crisis….”

“Liquidity facilities,” deprived of euphemistic camouflage, refers to inflation — the creation of credit or “money” to bail out politically connected investment firms. Central banks around the world have been pitching in to assist the Fed in carrying out this vital mission on behalf of corporate socialism, which helps explain why consumers world-wide are finding it increasingly difficult to pay for essentials — such as food for their families, and the energy needed to prepare it.

Disfigured by greed, enslaved by an addiction to power: The Nazgul, or “Ring-Wraiths” from Tolkien’s Middle Earth (left and below), were nine mortal kings whose incontinent lust for power led them to become the undead minions of Sauron.

But this system doesn’t operate as seamlessly as the Fed desires. Which is why, as a solution to a crisis of its own creation, the Fed wants to make official its informal status as the One Central Bank to Rule Them All — the Primus Inter Pares of the Global Financial Nazgul.

While the details of this division of power are worked out, our rulers still confront — for the moment, at least — the annoying and untidy business of tranquilizing the masses. Hence the distribution of the much-discussed “stimulus” checks, the current — but by no means the last — effort to make the dead parrot economy twitch.

Rather than spending the checks on ephemeral consumer goods — which is, apparently, our patriotic duty — many Americans have seen the tax “refund” immediately absorbed by sharply higher energy and food prices.

Of course, as economic analyst Max Keiser points out, the most provident thing Americans could have done with their “stimulus” checks would have been to leave them them uncashed:

“If every American had said, `No thank you’ to Bush’s stimulus check and refused to cash them, the value of the dollars in your pocket right now, in terms of their purchasing power would go up by a factor greater than the face value ($600) of the stimulus check. In other words, if you didn’t spend these checks, you’d be richer for it.

The reason being that America does not have a hard-money economy, it’s a debt-based fiat currency economy. All the money in circulation in America has been borrowed and then re-lent. So borrowing more money ($168 billion for the stimulus package) on top of America’s current multi-trillion debt load will continue the Bush-Paulson-Bernanke trend of debasing the purchasing power of your money and, therefore, raise the price of goods and services by more than the $600 `gift’….”

It is a testament to the depraved, malicious ingenuity of our rulers that they devised a way to make a “gift” to us of our own plundered wealth, and then deliver it to us in a fashion that makes us poorer for receiving it.

And of course, the typical American household is so utterly broke than even those of us who understand the logic of Mr. Keiser’s explanation find it almost impossible to resist spending the “stimulus” check in order to minimize the slippage in our standard of living.

(Click to enlarge.)

But our living standards will continue slipping, because our debt- and fraud-based economic system places the means of protecting our earnings beyond our control.

So common Americans liquidate their household possessions — not to pay off debt ala Dave Ramsey, but rather to pay for gas and food — explore the possibilities of the barter system (which the IRS has already managed to infiltrate), and — in some extreme cases — contemplate the possibility of obtaining dual citizenship in EU nations in order to find work abroad.

Meanwhile, the lords of the global economy labor quietly and in secrecy to perfect the mechanism of subsidizing the super-rich by debasing what the rest of us manage to earn and save.

Keeping the rabble at bay: Police provide taxpayer-funded protection as global elites gather to plan our future at last week’s Bilderberg meeting in Virginia. (Infowars.com)

If enough people understood how this system of plunder operates, the lifeless bodies of at least some of those responsible for this system would be decorating lampposts across our long-suffering land.

This explains why our rulers, like their counterparts in ages past, have taken great care to win and keep the loyalty of the legions.

On sale now!

Dum spiro, pugno!