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Ben Bernanke: Economic Recovery May Not Be Self-Sustaining, May Buy More Bonds Depending On Inflation
Excerpts from the just starting interview with Ben Bernanke on 60 Minutes (via the WSJ):
Federal Reserve Chairman Ben Bernanke appeared Sunday evening on CBS’s “60 Minutes”
to discuss the state of the economy, the central bank’s controversial
$600 billion bond-buying plan and the financial crisis. Following are
excerpts from the interview with CBS’s Scott Pelley, as released by the
network:
Q: The major banks are racking up profits in the billions.
Wall Street bonuses are climbing back up to where they were. And yet,
lending to small businesses actually declined in the third quarter. Why
is that?
A: A lot of small businesses are not seeking credit, because, you
know, because their business is not doing well, because the economy is
slow. Others are not qualifying for credit, maybe because the value of
their property has gone down. But some also can’t meet the terms and
conditions that banks are setting.
Q: Is this a case of banks that were eager to take risks
that ruin the economy being now unwilling to take risks to support the
recovery?
A: We want them to take risks, but not excessive risks. we want to
go for a happy medium. And I think banks are back in the business of
lending. But they have not yet come back to the level of confidence
that –or overconfidence –that they had prior to the crisis. We want to
have an appropriate balance.
Q: What did you see that caused you to pull the trigger on the $600 billion, at this point?
A: It has to do with two aspects. the first is unemployment The
other concern I should mention is that inflation is very, very low,
which you think is a good thing and normally is a good thing. But we’re
getting awfully close to the range where prices would actually start
falling.
Q: Falling prices lead to falling wages. It lets the steam
out of the economy. And you start spiraling downward. … How great a
danger is that now?
A: I would say, at this point, because the Fed is acting, I would
say the risk is pretty low. But if the Fed did not act, then given how
much inflation has come down since the beginning of the recession, I
think it would be a more serious concern.
Q: Some people think the $600 billion is a terrible idea.
A: Well. I know some people think that but what they are doing is
they’re looking at some of the risks and uncertainties with doing this
policy action but what I think they’re not doing is looking at the risk
of not acting.
Q: Many people believe that could be highly inflationary. That it’s a dangerous thing to try
A: Well, this fear of inflation, I think is way overstated. we’ve
looked at it very, very carefully. We’ve analyzed it every which way.
One myth that’s out there is that what we’re doing is printing money.
We’re not printing money. The amount of currency in circulation is not
changing. The money supply is not changing in any significant way. What
we’re doing is lowering interest rates by buying treasury securities.
And by lowering interest rates, we hope to stimulate the economy to
grow faster. So, the trick is to find the appropriate moment when to
begin to unwind this policy. And that’s what we’re going to do.
Q: Is keeping inflation in check less of a priority for the Federal Reserve now?
A: No, absolutely not. What we’re trying to do is achieve a balance.
We’ve been very, very clear that we will not allow inflation to rise
above two percent or less.
Q: Can you act quickly enough to prevent inflation from getting out of control?
A: We could raise interest rates in 15 minutes if we have to. So,
there really is no problem with raising rates, tightening monetary
policy, slowing the economy, reducing inflation, at the appropriate
time. Now, that time is not now.
Q: You have what degree of confidence in your ability to control this?
A: One hundred percent.
Q: Do you anticipate a scenario in which you would commit to more than 600 billion?
A: Oh, it’s certainly possible. And again, it depends on the
efficacy of the program. It depends, on inflation. And finally it
depends on how the economy looks.
Q: How would you rate the likelihood of dipping into recession again?
A: It doesn’t seem likely that we’ll have a double dip recession.
And that’s because, among other things, some of the most cyclical parts
of the economy, like housing, for example, are already very weak. And
they can’t get much weaker. And so another decline is relatively
unlikely. Now, that being said, I think a very high unemployment rate
for a protracted period of time, which makes consumers, households less
confident, more worried about the future, I think that’s the primary
source of risk that we might have another slowdown in the economy.
Q: You seem to be saying that the recovery that we’re experiencing now is not self-sustaining.
A: It may not be. It’s very close to the border. — it takes about
two and a half percent growth just to keep unemployment stable. And
that’s about what we’re getting. We’re not very far from the level
where the economy is not self-sustaining.
Q: [On calls to cut the deficit]
A: We need to play close attention to the fact that we are
recovering now. We don’t want to take actions this year that will affect
this year’s spending and this year’s taxes in a way that will hurt the
recovery. That’s important. But that doesn’t stop us from thinking now
about the long term structural budget deficit. We’re looking at ten,
15, 20 years from now, a situation where almost the entire federal
budget will be spent on Medicare, Medicaid, Social Security, and
interest on the debt. There won’t be any money left for the military or
for any other services the government provides. We can only address
those issues if we think about them now.
Q: How concerned are you about the calls that you’re beginning to hear on Capitol Hill that would curb the Fed’s independence?
A: Well, the Fed’s independence is critical. The central bank needs
to be able to make policy without short term political concerns. In
order to do what’s best for the economy. We do all of our analysis, we
do all of our policy decisions based on what we think the economy
needs. Not based on when the election is or what political conditions
are.
Q: Is there anything that you wish you’d done differently over these last two and a half years or so?
A: Well, I wish I’d been omniscient and seen the crisis coming, the
way you asked me about, I didn’t, But it was a very, very difficult
situation. And– the Federal Reserve responded very aggressively, very
proactively
Q: How did the Fed miss the looming financial crisis?
A: there were large portions of the financial system that were not
adequately covered by the regulatory oversight. So, for example, AIG was
not overseen by the Fed. … The insurance company that required the
bailout, was not overseen by the Fed. It didn’t really have any real
oversight at that time. Neither did Lehman Brothers the company that
failed Now, I’m not saying the Fed should not have seen some of these
things. One of things that I most regret is that we weren’t strong
enough in in putting in consumer protections to try to cut down on the
subprime lending problem. That was an area where I think we could have
done more.
Q: The gap between rich and poor in this country has never
been greater. In fact, we have the biggest income disparity gap of any
industrialized country in the world. And I wonder where you think
that’s taking America.
A: Well, it’s a very bad development. It’s creating two societies.
And it’s based very much, I think, on– on educational differences The
unemployment rate we’ve been talking about. If you’re a college
graduate, unemployment is five percent. If you’re a high school
graduate, it’s ten percent or more. It’s a very big difference. It leads
to an unequal society and a society– which doesn’t have the cohesion
that– that we’d like to see.
Q: We have talked about how the next several years are going
be tough years in this country. But I wonder what you think about the
ten year time horizon. Fifteen years. How do things look to you long
term?
A: Long term, I have a lot of confidence in the United States. We
have an excellent record in terms of innovation. We have great
universities that are involved in technological change and progress. We
have an entrepreneurial culture, much more than almost any other
country. So, I think that in the longer term the United States will
retain its leading position in the world. But again, we gotta get
there. And we have some very difficult challenges over the next few
years.
Full interview below:
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I think Fraud Street gang people like mad Ben as idiot like him will only print unlimited and gift it to Fraud Street every year
So the take away? QE.x forever is not an accident, or a coincidence. It's THE PLAN.
It's the only way if the US economy is not self-stainable, right??
Yes. It is. Look at Japan, 20 years on. Announcing new QE and stimulus every few months. They know it. But what they don't know is will it have huge global side effects because the US case is not like Japan since it involves the global reserve currency and the largest economy. I think they're going to be in for a surprise.
No doubt, the US side effect may very well be in the form of a new "reserve currency".
Were not printing money, we are lowering interest rates. I just got Ebola.
You know us, we would never ever do that! :)
It's called MMT, ya know. Printing money? No way. pshawwww
lowering the interest rate to -7%
Fuck where it is taking us, how bout we start with how we got here.
In a word it is fucking Monetarism, with Greedscam and The Bernake leading the charge.
Steadily pumping the system with easy money for the last 40 years has robbed those who actually produce and given to those who do not.
Monetarism is the core of all of or problems, from deregulation to inflation to income disparity to off-shoring to the rise of the FIRE sector to fraud.
If the system was not constantly being goosed with juice it would be forced to work down debt and encourage sound money and investment from savings.
+1776
Damn straight.
End fiat.
End fake.
End fraud.
End fiction.
End fantasy.
End federal reserve.
End federal government.
End fractional reserve practices.
End debt money.
End the predators-that-be and the entire predator class.
"...One myth that’s out there is that what we’re doing is printing money. We’re not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying treasury securities..." This is an "operational" truth, but a functional lie. Yes, money printing is not taking place. But debt is being monetized in an effort to add liquidity to a system whose life-blood is the extension of more credit and debt. Were the system not entirely dependent upon credit and debt, than money creation could arguably be seen as promoting the public good. But the Federal Reserve is seeking to artifically create conditions in which more people use credit and debt to consume the goods and services that supposedly promotes economic growth. AND HERE IS THE LIE. Global wage arbitrage and the de-productionalization of the USA has created a system truly dependent upon spending---a "let every Friday be a Black Friday!!! mentality. In this environment, the rich get richer, the middle class implodes, and the need for government food and housing subsidies go exponential----because no one is making money other than the top 1%, and eventually all of the debt monetization in the universe cannot stop the system from coming to a grinding halt and from millions of hungry and poor and cold and sick and tired people from going on a rampage.
What are they buying treasury securities with? Wishes and Rainbows?
Observe the tricky language... for example, "currency".
If "currency" means "paper money", then yes, they have not created any "currency". They are, however, crediting the accounts of the government of the USSA with $150,000,000,000 per month, and much of that is spent to pay salaries directly (or indirectly via subcontractors or suppliers). And those people do go to COSTCO and Walmart and elsewhere to buy real, physical goods with their debit cards and credit cards.
So, whether they actually "print currency" or not is 100% totally irrelevant... which demonstrates conclusively that Bernanke is a blatant scam artist.
OPERATIONALLY...All that is happening is that funds are being shifted around in Reserve Accounts at the Fed, and credit is bring extended via computer keystroke in various other other accounts. So from a purely operational stand point, The Bernank is telling the truth.
HOWEVER...the big LIE that the Bernank and his compatriots won't tell the American people is that GLOBAL WAGE ARBITRAGE makes it all but impossible for the U.S. to ever REALLY employ its citizens---other than as Walmart greeters or as waiters at the ski resorts of the rich---because the supposed free-market encourages the off-shoring of ALL production....ALL of it.
And so what ends up occuring is the obliteration of middle class wage earners, the need for increasing government programs to support a growing number of terimnally impoversihed...and all in an environment of increasing debt levels and attendent calls for austerity.
Farewell and dieu.
There is a lot more to the offshoring problem. We have a whole series of regulations and laws which keep our labor costs much higher than many areas of the world. Mandatory benefits, unions, minimum wage laws, OSHA, FLRB, to name just a few. We have a systemic problem and to blame free markets misses the real issues. We don't come close to "free-markets" and that is a large part of the blame.
I said "suppopsed" free markets.
However....think for a moment what the result would be if Unions were totally eviscerated and all manner of worker protection and compensation legislation were gutted. Unemployment would fall, but America would become even MORE of a banana republic than it already is. You'd have U-3 unemployment of 5%, and food stamp programs feeding 100 million people.
....It could take 4-5 years for unemployment to get down to reasonable levels. Right. During the high flying 1980s it took 7..that's right 7 years. And the snap back after 2 years was rapid, unlike now. Also we never faced a situation before where the jobs lost during the prior recession (2001-2) were never fully replaced by the expansion.
He knows. He's lying. Worse he thinks it's not his job.
And what jobs!!!???? In Public Education? Higher Ed?? Union workers building things??!!!! HOUSING?????????????!!!!!!!!!!!!!!
The Bernank does not really want too much lending from the banks. Why? Well, can you hear that big sucking sound of a toilet flushing? That would be Europe, whose banks made US leverage and its bankers look like little girlie men. This is all hold the line stuff, buying time. A moat around the castle, so that we avoid bank runs while the poo starts flying again. Yes, the US will be funding Europe through the IMF, swap lines etc. Four or five more years to "normalize" is certainly not out of the question. As Dave Rosenberg commented last week, historically its about seven years in the wake of a credit pop. So where are jobs going to come from in the interim? How many Dream Liners can the Chinese buy?
The next surprise swirling around the bowl could very well be China. If Europe is its biggest customer and US is the second biggest customer and the two combined account for a GDP of roughly $30 Tn, while China itself is a $4 Tn economy with the lowest level of consumption of all the industrialized economies, well, please do the math. China has beaucoup excess capacity and aggregate demand in the US and Europe are not going back to where that excess capacity was forged, in the credit, vendor financed, securitized madness of the bubble. China does not have the internal capacity to consume its own excess capacity. Unemployed migrants in China means beaucoup problems for Mr. Communist Party.
I think that the hardest thing to conceive at the moment is what it will be like to linger on for years like this, in a semi japanified existence with large trading ranges across asset classes and fits and starts of economic activity and crisis. With no end, no resolution. No revolution, no fascism, no real change in the establishment which lays low, ammo getting rusty, bins of hard red wheat starting to go rancid ... A purgatory.
Umm my ammos sealed so it won't rust...........
http://www.impactguns.com/store/PPU-A-034.html
Ah yes, the sealed battle pack. Does a fellow good.
Just the beginning of the PR blitz by the FED advising the sheeple to save nothing, spend everything, maintain perpetual debt, etc...... Reminds me of that picture of 2 obese people watching multiple televisions with talking heads saying "Everything is OK"! It's like patting your children on the head telling them everything is "OK' right before they get shipped to auschwitz.
Q: You have what degree of confidence in your ability to control this?
A: One hundred percent.
This from one of the predators-that-be morons who has gotten every single one of his major predictions WRONG.
Furthermore, trying to control the economy is "central planning", which is blatant tyranny and totalitarianism... and what crashed the USSA incidentally.
What a cretin.
An excellent point which is too frequently overlooked, and not nearly enough appreciated.
I used to be worried about inflation, but not anymore. It turns out the Fed has analyzed this from every perspective and is 100% confident of their ability to control inflation.
Thank goodness, I was worried for a while. But no more. I'm getting out the visa and going to the mall.
Happy days are here again....
What context did BS Bernanke think this question came? Rest assured, the Fed does print money. Says so right on his Federal Reserve Note.
Liar's poker? They can't raise rates! How would Treasurie repay bonds with that? Blackhawk may just be that stupid to think we would be so easily tricked. You know it when he says he is 100%. Whe can't admit there might be a chance of being wrong? Benneh Bernankhe.
Trained by the Ivy league, he hit the talking points. He works for Walled Street, plain and simple.
"We could raise interest rates in 15 minutes if we have to."
Yeah, Bennie, you could blow your brains out in millisecond too -- same result.
Yeah, okay Ben, what happens AFTER you raise rates? Where does housing, lending and the entire economy go from there?
Does anyone actually believe this dogshit anymore?
15 minutes will be 5 too late.
The Bernank can raise interest rates in 15 minutes, but by the time he is considering a rate hike, he won't be able anchor inflation expectations.
Credit to JE Sinclair - "QE to Infinity." All fiat meister face the same question every day now: Die now or die later? The choice is obvious and the only path to another day/week/month is to print.
The Bernank: We were unaware of AIG, unaware of subprime loans, unaware of pending 2008 crises, but the recession recovery is self-sustaining --- but we're going way past $600 billion anyway for shits and giggles.
Q: If The Bernank is so clueless, why should you be allowed to determine the course of Western civilization?
hmmmmm....... that's a stumper...let me think about it..... oops - wait: GS is on the phone; hold on
This is all that matters, demand.
A: A lot of small businesses are not seeking credit, because, you know, because their business is not doing well, because the economy is slow. Others are not qualifying for credit, maybe because the value of their property has gone down. But some also can’t meet the terms and conditions that banks are setting.
I wonder how heavily medicated he is to be able to do the interview? Not enough, because he is becoming visibly twitchy.
When it all collapses I doubt his masters will worry about extracting him to aplace of safety. He may shave and try to slink away.
Botox that bitch.
No double dip because things can't get any worse than they already are? Banks are making billions in profit and not lending because there's no demand for credit? These qualify as answers from the Chairman of the Federal Reserve? I used to think this guy had a textbook jammed up his arse along with his head and his complete lack of ever having entered the real world was the reason for his epic missteps. Now I simply think he's owned by puppetmasters.
I could be Chairman of the Federal Reserve. Doesn't matter if you get it right or get it wrong, just so long as you do what your masters tell you to do.
can't dip back into some you haven't come out of
Bernank, the deep, deep thinker?........Not!
The fucker is dancing on the head of a pin........or, at least trying.
What a liar........no nice way to put it.
Incredible that "the Barnank" could actually stand up on 60 Minutes and lay that bullshit in front of the world. "the Barnank" works for a cartel of banksters and this entire interview has nothing to do with jobs or targeting inflation. It is all about reliquifying the banks before the newly-elected politicians force the banks to follow proper accounting rules which, if forced tomorrow, would create a Lehman-revisitation.
Until then, buy the fucking dip.
Buy the freaking real, physical silver and gold... dips or not.
Incredible that "the Barnank" could actually stand up on 60 Minutes and lay that bullshit in front of the world. "the Barnank" works for a cartel of banksters and this entire interview has nothing to do with jobs or targeting inflation. It is all about reliquifying the banks before the newly-elected politicians force the banks to follow proper accounting rules which, if forced tomorrow, would create a Lehman-revisitation.
Until then, buy the fucking dip.
"We’re not printing money."
Well, no, not when the zero key on a keyboard is being pressed and the currency being electronically generated, you're not.
"We're not monetizing debt"...
"we don't know where $500 bn of TARP money went"...
The man is mad and, like SIR Alan Greenspan, history will not be quite so kind to him.
DavidC
Are the cameras off?
This is so rigged.
Hey, did you here the about Bang Dae-Ho on ZeroHedge?
Hah Hah, that's making the rounds at the Fed.
What??
What do mean the mic is still on?
With lies and actions so blatantly against every honest, ethical, productive individual... how can anyone imagine a future in which a significant number of people will work their butts off to be creative and productive?
The predators-that-be are absolutely assuring collapse.
"100% can reign inflation in if needed. I can raise rates in 15 minutes."
My god, what planet am I on. I am beginning to roll my beads and am chanting again. Not a good thing.
"...reign inflation..." = Bernankian slip?
Ben knows nothing.
I am not concerned about a double dip recession.
What I want to know is when will this great depression end.
This is the exact same garbadge that got us into this shit.
Economisists: "Our models could not forecast a drop in housing prices."
Why the fuck would you build a model where prices can't flucuate--both up and down.
Insanity!
Bernanke: inflation salesman.
We want prices to go higher, higher, higher. If we fail then everything will be down, down down. It's simple! Do you want up-pointing boobs and dicks? Or would you instead want low riding limp ones? A child can do this job.
Ben old buddy. You just keep doin what you're doin pally.
signed,
gold and silver bug
Botox Ben
What is the ONE industry that defies the forces of Global Wage Arb? What is the ONE industry that dampens the destabilizing power of class struggle in lieu of nationalist ferver? What is the ONE industry capable of "employing" increasing numbers of poor and disenfranchised and hopeless young men and women??
WAR my friends. Heeeeeeeeelllllllloooo Korea.
Ben's voice quivered like a child who had wet his pants in kindergarden.
Do we really want an academic theorist who pee pees his pants on national TV in charge of restoring confidence and perception in the system and the economy ?
Is this the best take charge leadership in America to lead us out of credit default swap / securitization Hell?
Arrest Bernanke. Stop the treason.
We know what he wants - inflation.
So what he's afraid of would be the opposite? Deflation.
"like housing, for example, are already very weak. And they can’t get much weaker. "
oh yeah? are you sure about that? you already said sorry about not seeing the big doodoo coming. this time Shiller says the housing double dip is here. The housing price is clearly going lower. I would say when the shit hits that shining forehead, he wouldn't even notice.
BIG EVENT! BIG EVENT?
Nope. Nothing is coming, guys.
They had the chance for the Depression in 2008. Now the "Doom" is over.
If the world feared "Collapse", the stock market would crash and bond yields soar. (No Double-Dip)
not coming.
better be thankful this year. Last year you were all laughing at Time's Man of the Year. guess what?
BEN WAS RIGHT! You were all wrong! (no troll. no homo).
Hope you get "over it" soon. Many people have destroyed their lives waiting for "it"...
http://www.youtube.com/watch?v=QWIenEil1fc
Botox Ben, asshole.
OK so you're homo troll or Ben Berskanky himself - welcome.
Oh and I would hardly call loading up on gold and silver "destroying" our lives you douchebag
After going through the exerps, what a puffball interview. This guy has the ego to think he can control inflation! He blames unemployment on whether you have a degree or not. How about Fed policy! That is the reason for the unemployment because they blew the bubble and watched it implode. Now they reward companies for laying off thousands so they can beat earnings making the rich much richer. And the concept that we aren't printing money. I am glad that I finished dinner before this prick started talking.
Ben is quite the piece of work, isn't he? What horse hockey this guy dishes out.
What do you disagree with? 9.8% unemployment is better than 25%.
If ZH took over monetary policy, you would get another Great Depression.
80% of the American people are behind Ben. Otherwise you would see what you see in Europe. but guess what? YOU DON'T!
I just hope you people realize what is going on before you ruin a marriage, destroy your child's adolescence or worse...
Here's my contention with your argument. I do NOT favor austerity. Regardless of what transpires vis Fed monetary policy, there is no way to create millions of middle class, solid, productive jobs in the USA without taking them away from foreign workers. It is a zero sum game, with millions of citizens around the world looking to enter the work place every month. As jobs become ever-more scarce relative to population, nations are compelled to subsidize social programs or face revolt. Over the long haul, there is no way to afford all of the government subsidy because the global money-as-debt system will not support continued expansion of credit markets. In the end, contraction arrives...and with it hunger...and with that conflict. 10 years, 20 years...next year.
thank you for a level-headed response.
So you want to end "debt" money. Well, a lot of people will be unhappy. People love credit.
So far money printing is working. Will see who is correct.
I also believe Bernanke is acting like a Saint buying long-term government paper (Who is going to come collect?). Printing works just fine. More domestic demand will keep inflation low low low. We can see demand recovering just fine (should pick up steam in 2011).
2011 is shaping up to be a great year for America :)
The problem with credit and debt as the foundation for growth is that you always end up with busts---and default or repudiation. In 1873 that was bad enough...in 2010 and in such a complex and razor thin global system, it is really scary. The world of international finance had created a system that enriches a few and that tries to keep the remaining billions of people in a state of relative calm and stability. But just look at China. The leaders there know that they only remain in 'heaven's favor' if they can feed and house and employ the people. And so they do anything...anything...to keep the illusion of real growth afloat. When the debt machine slows too much, which by definition it must, how do they keep a billion people in check??? America is really no different. Credit bubbles burst, and eventually reinflation becomes impossible. By the way, this site might interest you: Http://moslereconomics.com
What's your take on China encouraging its citizens to buy gold and silver? I'm starting to think this guy's theory may be a real possibility: http://www.youtube.com/watch?v=YPXncTuwFIE
That's why Ben's poll numbers are so high .. The high level of esteem he and his institution are held in. One day he might even equal the trial lawyers & congress.
BTW, best snark since Phil Gramm graced these pages.
Cheers
I restrain myself when I read your posts. I know full well that I'm an apocalyptic type, and I've been wrong so far, so I totally recognize that I'm *most likely* wrong now. I felt so disappointed when I realized that the world has always been on the verge of armageddon.
But I ask in all sincerity, when you say, "So far money printing is working," can you please elaborate on what it is "working" to accomplish? What is the goal that is being achieved?
dipshit,
We are going to have it (sooner of later) anyway and now with the threat of incredibly higher inflation.
What if inflation ramps up hard and he has to raise rates (in 15 minutes)? What the fuck is that going to do to the recovery?
What don't you understand about playing god and the unintended consequnces?
That pretty much sums up the Bernake attitude; all knowing, all seeing, all arrogance.
The props are impressive.......ie., the CBS scripted Wow! visit to the FED Board Room where the all powerful Bernank debates, deliberates and often misses the point at critical times......losses limited to no morre than $200 million etc etc etc etc ad nauseum, but lets pretend, right.
Bernank is all about circular logic and appearances.
So, maybe the FED should be investing in education instead of Treasuries.
Get fucking real.
You can start purifying capitalism by eliminating lobbyists or the fed. Makes no difference which is first because the whole fiat scam is dependent on both.
only johnny bravo was (is) more desperate for attention than you are.
It is a fallacy to say that if the fed was there to add money back then that things woukld have been better.
Most likely it would have dragged out the depression longer, like what will happen this time.
Economists have about as much control over the long term fate of the economy as astrologists do at controlling the oscillations of the sun.
toathis! yer pulling my leg, right? hahahaha... you almost had me there for a second... you fucking moron. Yer gonna quote a 9.8% unemployment rate? I've got a bridge for you...better start saving up your nickles & dimes
If what you have said is true toathis, why did Bernanke skirt the questions and pull a bill clinton lie like he did? I know that he is supposed to appear upbeat about the economy etc... But he still only told half truths (at best). The inflation numbers he gave were cooked. I am a common man, yet I know this to be true. He dodged several questions. The most troubling for me was the answer he gave regarding unemployment. I know many who have gone into debt for a degree and they are in the same boat I am in.
We live in troubling and as always, uncertain times. My advice to you and others is that you should always hope for the best and prepare for the worst. And be careful who you trust. Whenever I talk to folks I give them the whole truth, everything I know and at times it has cost me dearly. But everybody that knows me takes my word on things because of that. I don't do half truths like Ben.
80% of the American people don't even know who the fuck Ben is or what the fuck the Fed is. You're simply mad.
Toothless, I am glad that you have chosen as your avatar an image representative of your intellectual maturity.
The Exit Strategy... He's got an exit strategy.
RELAX EVERYONE!
exit strategy: driver, take me to the airport, NOW
Headline in a spam I received from "The Washington Times:" Unemployment jumped to 9.8% in November; slow job growth blamed."
With logic like this in the MSM, is it any wonder the Ignorati remain ignorant??
Oil is $89, and gas is $3 today. in 2000, the gas $1.40, LA apartment was 250k, today the apartment is 600K. He says no inflation. what do we call these tripled prices on the things we need everyday?
If Bernanke is so confident of his plan and he does not want to politicize the Fed why is he going on 60 Minutes? I will tell you why. He is a political rat bastard and he is intent on running this Keynesian idiocy down our throats. Why does he believe monetizing the US debt to a tune of 600 Bil. will work? Just remember when this does not work and inflation is raging it was because Bernanke chose monetizing vs. austerity. When this does all blow up he should be hung upside down along with Krugman.
So according to Ben, it is OK for the banks to take risks in the commodities or bond markets, but yet be cautious when lending to small businesses.
What mad Ben is saying to Fraud Street gang is that "you can play in this Casino with my free money as there is no risk in playing as I will always jack up this Casino, but if you lend, I can't help as it is out of my control"
call the Bernaks bluff
raise the interest rates bytch....
High Unemployment Rate 'Primary Source Of Risk' ...is juvenile and false report.
Prime risk is failure to prosecute harmful acts against citizenry.
Unfairness begets chaos.
"This Act establishes the most gigantic trust on Earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized, the people may not know it immediately but the day of reckoning is only a few years removed.... The worst legislative crime of the ages is perpetrated by this banking bill."
"To cause high prices, all the Federal Reserve Board will do will be to lower the rediscount rate..., producing an expansion of credit and a rising stock market; then when ... business men are adjusted to these conditions, it can check ... prosperity in mid career by arbitrarily raising the rate of interest. It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down. This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed. The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money. They know in advance when to create panics to their advantage, They also know when to stop panic. Inflation and deflation work equally well for them when they control finance."
The financial system [...] has been turned over to the Federal Reserve Board. That board administers the finance system by authority of [...] a purely profiteering group. The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money."[6]
-Charles August Lindbergh 1859-1924
A: Well, it’s a very bad development. It’s creating two societies. And it’s based very much, I think, on– on educational differences The unemployment rate we’ve been talking about. If you’re a college graduate, unemployment is five percent. If you’re a high school graduate, it’s ten percent or more. It’s a very big difference. It leads to an unequal society and a society– which doesn’t have the cohesion that– that we’d like to see.
I guess the top one percenters must be really well educated! According to Bernie Sanders speech they make as much as the bottom 50 percent.
If they want to help main street and not wall street and the banks, why are parent plus loans with the govwerment's backing at 7.9% while the banks can borrow at close to O%?
Its an oligarchial goverment/bank/military, and anyone else with enough money to buy a politician; all designed to keep the masses in fiat debt servitude.
The Great Depression gave America a second chance, it cleared the bezel out of the system. That is what Monetarists don't understand.
Benny is feeding the bezel.
There is no coming back from this.
Monetarists think that recessions and depressions can be avoided with a flood of liquidity. This is absurd. Recessions and depressions--as the US has experienced them--are usually the result of debt-deflation, not a lack of liquidity as Benny suggests.
Read Steve Keen on this, he has got it down as good as anyone.
True that. RE actually needs to come down if there is ever to be a recovery. The current income /house price ratio is way out of wack.
The Real Estate (RE) is the base of the problem. It should have been allowed to deflate like a normal capitalistic boom and bust. The goverment refuses to let that happen. Hence, the continued bubble blowing througm QE 1,2 and who knows how many more. They are petrified of RE falling because then the banks balance sheets will go bust, so its a continual prop job. However, it will not work in the long run. RE is destined to fall whether they like it or not. The prices are unsustainable in historic relation to incomes.
Never mind. Sorry.
Printing:
Get off your ATM (electro addiction).
Withdraw funds (will cause actual printing (base money in your hand))
Won't be any significant 'printing' without an actual demand for delivery (of what doesn't exist). The reserve ratio wall won't fall down unless picked apart brick by brick.
What happened to 'wait til you see the white's of their eyes'! This is ridiculous. Of course anything we do today means we are better tomorrow than if we did nothing, but what about 1 month, 1 year, or 1 decade into the future! Suck up some pain. Deal with the problems. Stop preaching austerity on others and living in complete hypocrasy for ourselves! And really, stop pretending economics is a sciene! There is no testing. Merton Miller won nobel prize with theory that cap structure doesn't matter. Michael Milken won two fortunes, proving they do!
He's an expert at Starting great depressions. He knows what hes talking about.
I'm on the West Coast, I just saw the Bernanke interview.
In my opinion, he answered the questions perfectly and handled himself well.
If I were him, I would not have been able to answer those questions any differently.
Yea, serves its purpose to the best of its ability in a scripted and controlled way.
So, forget about it and get back to reality, momo the pomo tomorrow and dream about making speeches at the FED boardroom.
@Robo
FIFY.
oh shit....a hypothetical now brewing in mind....I can feel the dilemma coalescing... oh shit, oh dear... WHAT IF we had to choose between Robot and the Bernank at the helm?
At a surface level - of course that is true - he gave seemingly reasonable answers - that a journalist coiuld only nod to and agree. At the surface level.
Because the journalists only ask soft ball questions. Did not ask if Bernanke felt it was OK to finance the Govt directly ( monetize). If so, why does the Fed need to be a separate institution from the Treasury?
Did not ask exactly why low bond yields are going to get more high school dropouts jobs. Did not ask if banks have a special position in society today - temples - that Bernanke enables. Did not ask if he thought banks engaged in any fraud whatsoever through all this - and what should society do to fraudsters- on a large scale. No just namby-pamby supplicant questions - which ofcourse bernanke could easily parry. Ya full deserse evrything ya get.
They seek him here, they seek him there
Those financiers seek him everywhere
Is The Ber-Nank on the call?
NO! He is with Buddy & the kids in the hall
http://www.youtube.com/watch?v=ZNCUgFeIjyM
There hasn't been a 60 minutes interview like that since Michael Jackson & Ed Bradley..
http://www.youtube.com/watch?v=UKti-AjG2w4
Of course Ben shared his bed with kids ... And anyone else he needed to. Meanwhile, the folks off South Main Street have already concluded who won this arugment..
http://www.youtube.com/watch?v=UgG1RO-7gLo
As in truthfully or did you mean perfectly to keep the status quo going.
The money supply is not changing in any significant way???? The money supply has nearly doubled since 2007 Ben. This man has studied the depression so much he is determined to cause one. Where does he get off saying that unemployment is an education problem? 85% of college graduates moved back in with their parents this year and have been forced to take low paying jobs just to get by. He wants more kids to rack up student loan debt so they can own them! Unbelievable, that's all I got to say about this arrogant fool that has been wrong about EVERYTHING he has predicted.
If you know anything about body language, you could immediately tell Bernanke was lying most of the time. He had his legs and arms crossed (the classic double-cross), though I thought the lip tick was a nice touch which went well with the quivering voice.
The man was lying throughout. No sense in following laws any more in this bernake-banana republick.
Ben is an errand boy working for the Fed shareholders - the banks.
He does whatever the banks want or need. If the banks want free money to poor into Africa - presto. If the banks want a piece of the 401k - presto. If the banks want to be your landlord instead of lender ...
This was a classic propaganda piece. A public relations effort to sell quantitative easing to the general public.
Bernanke: "The other concern, I should mention, is that inflation is very, very low, which you think is a good thing and normally is a good thing, but we're getting awfully close to the range where prices would actually start falling.
60 minutes: "Falling prices lead to falling wages; it lets the steam out of the economy.
Bernank: "Exactly."
60: "And you start spiralling downward."
Bernank: "Exactly."
60 Post production voice over: "That's deflation and that's what happened in the great depression."
60: "How great a danger is that now?"
Bernank: "Well I would say at this point because the Fed is acting I would say the risk is pretty low, but if the Fed did not act then, given how much inflation has come down since the beginning of the recession, I think it would be a more serious concern."
60 Post production voice over: "Critics of Bernanke's Federal Reserve have the opposite worry. They say that the six hundred billion, and holding down interest rates, could overheat the recovering economy, causing prices to rise out of control."
Takeaway for the average idiot: If you have some concerns about QE-infinity that means you want another great depression and that you hate strong economic growth.
I was very much struck by the same quatrain.
People are worried that this could overheat the economy? Uh...no, that's not exactly what people are worried about.
People are worried that in an economy in which they have no asset-wealth, no access to credit, and no income stability, that any *nominal* increase in cost-of-living could become impossible to afford.
It would be funny if it weren't so insane. I don't recall hearing anyone "worrying" about the RE markets in '04-'05 because "they could become overheated."
Uy.
)I never wanted to live in a Kafka story.(
END THE FED
The FOMC and The Bernank has got it wrong every time. (Or correct it you believe they are taking down the economy on purpose).
How about a ZH Poll? Something like:
Are the Fed FOMC and the PDs of the NY Fed deliberately destroying the economy, or are they just negligent and totally inept?
A) Deliberately destroying the economy.
B) Stupid as rocks -- send in some Austrian Economists for God's sake.
I only read the partial transcript contained in this post. Honestly, I thought Harry Wanger was answering these questions.
Now we know who Harry is
Is that true? I'v never seen that happen.
Well, let's ask Michael Dell to show us his SNAP card -- then we'd know the truth behind this statement!
I think people here should definately send some feedback to CBS via their website. I think they need a little education themselves. I'm tired of crap journalism that isn't educating our society in any way. I think Ben's complaints about education are more a result of terrible journalism than anything else.
http://www.cbs.com/info/user_services/fb_global_form.php
The Fed is really a paper tiger. Or like the Wizard of Oz. People and markets assign too much power, mystique, blame and/or credit for its actions/abilities. Its basically just a clearinghouse for monetary transactions and has some influence on short-term interest rates. The bond market determines interest rates, the Fed follows. Bailing big banks and corporations is an abuse of its mandate which is why it needs to be abolished but thats not the point here.
The Fed only creates money when its impaired assets are sold on the market at less than par. This whole QE thing is a yawner and a non-event. If the dollar wasnt Reserve Currency then Fed wouldnt be under a microscope....its actions are more subject to whipping boy/Oz status because it obfuscates the real culprit which is deficit spending.
So...Bernanke is not really "printing money" like he said or increasing money supply which is main driver of inflation. Assets are being swapped on the balance sheet. PD's / banks could still speculate on stocks/commodities from their reserves. To wit :
http://pragcap.com/mechanics-qe-transaction
"This is very important because millions of investors are betting on the inflationary impact of QE. But again, as Mr. Bernanke said there is no reason to believe that QE is inflationary. Why? Because they are not adding net new financial assets to the private sector. The assets already existed! They are merely swapping reserves for bonds. They are giving the banks a checking account instead of a savings account. What does this mean? If Bank A owned a 1.2% 5 year note and they sell that note to the Fed they receive reserves earnings 0.25%. Their savings account was changed to a checking account. What changed? Nothing. Just the duration and rate of the paper. The number of assets in the system is the exact same. You can see this description in the following diagram (via Alea):"
As has been said ad nauseum..Bernank cannot create loan demand which is the true creator of debt/money. QE is really a necessity to make the appearance of "doing something" and calming the bond markets. QE is not inflationary, doesnt alter interest rates(med/long) or affect the dollar. What effects interst rates long term is deficit spending.
So Ben is trying to create an illusionary inflation mind set by putting a floor under Treasuries and "help" keep Treasury funded at auctions. That is the nightmare...the auctions. Hes trying to stay in front of yield curve instead of behind it(to the extent he can) because once he loses total control, its game over.
Your "analysis" is ofcourse correct - but incomplete. You ignore the fact that the Fed govt is issuing huge amounts of Treasuries that the banks buy - reducing their reserves. A few weeks later the Fed buys it off the banks - replenishing their reserves. If the Fed were not doing this bond yields would rise and act as a brake against non-stop govt spending. Bernanke has removed those brakes.
Govt spending has a certain momentum - not easy to reverse. Govt spending is soaking up resources in the real economy. If and when there is any kind of uptick in private sector then there will be a large demand on resources - not easily reversed - causing inflation - not easily reversed.
In thinking about demand - ofcourse one needs to keep in ming Global demand - not just US demand.
so where's the cartoon bear version?
Here:
http://www.youtube.com/watch?v=5_dH3GjyVLc
oh, shhiitttt...I gotta confess I laughed, but geez o' willy, are we ever screwed. In many ways, but one that has always knocked me over is: the benbernank and timmah and etc are the best we can come up with out of how many millions of allegedly really smart people? shit shit shit, gnash gnash gnash my teeth
Got toilet paper?
$$$$$$$$$$$$$
http://www.youtube.com/watch?v=ChkAdoNwSn0
The US Treasury is issuing copious amounts of Treasuries to finance the deficit.
bernanke is buying Treasuries.
Therefore Bernanke is deirectly financing the US Govt operations.
This is caled monetization - a no-no in central banking circles. The reason the Fed was set up as a separate entity from the us Treasury.
This is not hard to grasp is it?
Bernanke admits that the bulk of the very high unemploymenmt is with under-educated folks. The modern economy has less and less work available for low-skill labor. So these folks will have to be given money by the govt to buy food etc. Bernanke is effectively doing this. This will NOT reduce unemployment but make it more ingrained, a permanent feature of the economy.
In a nutshell - Bernanke is enabling the Govt to become an ever larger part of the economy. If you belive that the govt spends wisely in productivity enhancing ways - in ways that spead the loot fairly - then yes - bernanke is doing a wonderful thing.
He's cracked. Or smoking crack that is.
Stanley Fischer (Bernanke's mentor) head of ISraeli CB.
"He became Governor of the Bank of Israel on May 1, 2005, replacing David Klein, who ended his term on January 16, 2005. Fischer became an Israeli citizen, the aforementioned action being a prerequisite to this appointment. He has been involved in the past with the Bank of Israel, having served as an American government adviser to Israel's economic stabilization program in 1985. On May 2, 2010, Fischer was sworn in for a second term."
Fischer has earned plaudits across the board for his handling of the Israeli economy in the aftermath of the global financial crisis. In September 2009, the Bank of Israel was the first bank in the developed world to raise its interest rates.
Bernanke was educated at East Elementary, J. V. Martin Junior High, and Dillon High School, where he was class valedictorian and played saxophone in the marching band.[18] Since his high school did not offer calculus, he learned it on his own.[19][20] Bernanke achieved a SAT[19][21] Bernanke attended Harvard University, where he lived in Winthrop House and graduated with a B.A. in economics score of 1590 out of 1600.summa cum laude in 1975. He received his Ph.D. in economics from the Massachusetts Institute of Technology in 1979. His thesis was named "Long-term commitments, dynamic optimization, and the business cycle" and his thesis adviser was Stanley Fischer.
--------------------------------------
Mike Pence (friend of Israel) is attempting to "modify" the FED mandate to ignore FULL EMPLOYMENT!!! HELLO!
http://mikepence.house.gov/index.php?option=com_content&task=view&id=437...
Once inflation gets above 2%, interest rates go up, dollar goes up, gold collapses. Got it?
Fed Charter expires in 2012. (Think that might be renewed in Bill's Fine Print)
Ron Paul isn't going to get anywhere, thanks :)
Warren Buffett is correct.
No double-dip recession. No Hyper-Inflation Either.
(Unless you can convince enough people no intrinsic value exisists between a 1-note and a 100-note) GOOD LUCK, folks.
No money printing is going on. I have never seen a Federal Reserve note with Timothy Geithner's name on it. Stops at Paulson.
interest rates go up > lotsa boomage, resets blowing up, derivatives, CDS, ,etc > reinforce secular deflationary trend > no more bailouts > more boomage > currency revaluation ?
Interview translation:
"more technically advanced predator drones to exterminate
afghans. Thus enabling the theft of their natural resources
more easily." in 20yrs may be better for long term economic growth for
US. But not very good if you're afghani.
Everybody should position their kids to get govt jobs, preferably with the Fed. The they will be directly hooked into the new money creation, dont h
I wish I had some mad photoshop skills after watching that interview. And the big reveal of where the man behind the curtain works ("come and knock on our door" ...the inside of the fed building)
If I had such skills I would do mashup of a Threes company's poster starring
The Ben Bernanke: John Ritter/Jack Tripper
Sheila Bair: Joyce Dewitt/Janet Wood
Elizabeth Warren: Chrissy Snow/Suzanne Sommers
Jamie Diamond: Richard Kline/ Larry Dallas
Timmy: Don Knots/Mr. Roper.
Christina Romer: Audra Lindey/Mrs. Roper.
Maybe switch Jack and Mr. Roper. Or put Blankenfein in as Mr Roper.
Since b.s.bernanke,phd is so brilliant - someone should ask him to take 10 minutes out of his precious day and sketch out the following:
Take a hypothetical middle class american - modest suburban home, 2 cars, 2 kids - school , college. Ages at the usual human rate. gets sick at an average human rate. Dies on schedule. Assume he lives in NJ. Accounting for various taxes and such - how much does the poor sucker need to earn over a working career to die withouthaving defaulted on debts and without leaving any debts behind ( lets assume he's an honest sucker and pays his taxes on time, property taxes on time etc)? Come on professor - do the math.
has to be over $4 million
I think Beno means that since he purchased the bank's trash at par and he alone gets to mark down this trash at a rate of his choosing, then he only "creates" new money equal to the amount that he "marked down" the trash. Hence, no net new money created. Comments please...
I think you got it exactly right. As did Tyler when he made the before and after pictures.
A) Before: http://www.zerohedge.com/article/federal-reserve-balance-sheet-update-week-december-1-ponzi-must-go
B) After: http://www.zerohedge.com/article/bernanke-tells-nation-sunday-more-qe-coming
But it takes a lot "lube" to go from A->B. Lube is made from oil. Not from printed dollars and we all know that oil is not included in core inflation. So Bernake's logic is still valid in PhD circles.
What terrible journalism!
Why not talk about what he wants for Christmas, or what he likes from Dominos?
Softball lobs for questions, no meat, no followup, absolutely no truth.
60 minutes get a clue.
Bottom line: Printing more currency, seizing more control, supporting more regulation.
Time to face it: It IS a new iteration of fascism.
Amazing interview.
Didn't that asshole remember the last time he raised rates?
If I recall, it didn't do a damn thing to cool the markets. Until they crashed, of course.
Oh yeah, the journalism rivaled CNBC in quality.
He's not printing money and the $14 trillion in national debt can be repaid in chocolate chips then correct?
Holy shit when he answered the question about Wall Street bonuses with the bit about "unemployment is education-based", my head almost exploded.