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Bernanke Speech Translation
This article originally appeared in The Daily Capitalist.
Ben Bernanke is speaking at the National Press Club today and his pre-released speech says basically that QE2 is working:
Since August, when we announced our policy of reinvesting maturing securities and signaled we were considering more purchases, equity prices have risen significantly, volatility in the equity market has fallen, corporate bond spreads have narrowed, and inflation compensation as measured in the market for inflation-indexed securities has risen from low to more normal levels. Yields on 5- to 10-year Treasury securities initially declined markedly as markets priced in prospective Fed purchases; these yields subsequently rose, however, as investors became more optimistic about economic growth and as traders scaled back their expectations of future securities purchases. All of these developments are what one would expect to see when monetary policy becomes more accommodative, whether through conventional or less conventional means. Interestingly, these developments are also remarkably similar to those that occurred during the earlier episode of policy easing, notably in the months following our March 2009 announcement of a significant expansion in securities purchases. The fact that financial markets responded in very similar ways to each of these policy actions lends credence to the view that these actions had the expected effects on markets and are thereby providing significant support to job creation and the economy.
I have mentioned this kind of reasoning before: Post hoc, ergo propter hoc. It means that first A happened and then B happened, then A must have caused B. I think the fallacy in such reasoning is rather obvious. Let me translate what he is really saying:
Since August when we began to flood our primary dealers in Wall Street with newly printed money the market went up because they used the money to buy financial products, including stocks. We are trying to cause price inflation because the majority of the FOMC is concerned about price deflation. If we cause price inflation then we will fool everyone into thinking that because prices are going up, such as in the stock markets, that it is real growth even though it's just price inflation. Even better the national debt can be paid down with cheap dollars. Yields on Treasurys initially went up because the bond vigilantes aren't stupid: they know it will cause inflation so they wanted higher yields. But, ha, ha, the Euro went into the tank because of the PIIGS and money flooded back in to the US and drove Treasury yields back down, for the time being. Screw the vigilantes. The same thing happened when we tried QE1, but as we all know, that failed and we are desperately trying again because we don't have too many arrows left in our quiver. Hey, if it had worked, would we be doing QE2? We are desperate because if unemployment doesn't come down, the Obama Administration will be screwed and I'll lose my job. We are ready to do QE3 because we don't have a clue what else to do.
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Tyler would post them if you could scan and submit them as an article.
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Tyler would post them if you could scan and submit them as an article.
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A few idea are usually distinct with me but incredibly specific.
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It witnessed the one time China football team
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I'm sure Tyler would post them if you could scan and submit them as an article.
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The Yen, and Japan, raising cash to pay for the reconstruction of the country, is already on the path of Yen appreciation and will be assisted in their efforts by the other central banks. By acting in a co-ordinated fashion they will begin to reverse the worldwide race to the bottom.
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The former execs that ruined the company for 50 years with meritless, non-achievement, nepotistic hiring practices, have been and now are living without having to work, being paid billions, the life of Riley.
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you look at the Stasi video on youtube u see that they had a secret method of killing your BUSINESS that was so secret that nobody knew they did it. This is because if the STASI kills a bunch of dissidents' overtly, then their dead guys surviving friends and families could piece together what was in common among the dead that the STASI used to spy on them.
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The only way things change is if the Europeans or Chinese get FED up and call Obama. Perhaps when riots start in Saudi big oil will step in. Certainly with WWIII starts.
gee, 2012 is right around the corner. guess the aztecs were on to something. cocktail anyone?
We need translations because every Western institution is now swimming in and talking unremitting BS.... the Grim Reaper (hyper-deflation) is coming to them all, and we'll finally get a break from BS
PS. if you're deaf you're not missing anything at this point in history, in fact you're bloody lucky!
He should have said get used to it bitchez. We are all asian now (12 hour workday, low paying jobs, etc.)
He did say that by saying emerging markets like to eat meat instead of grains.
I think Ben knows exactly what he's doing.
But he also knows most of us won't like it. Tough titty.
He also knows there was a point of no return, and we passed that point even before he doubled down on QE.
As it stands, I think he's already come to the conclusion that the policy is fatally flawed... well maybe. But he will expand the balance sheet to at least $9 trillion to at least buy enough time to get into the escape pod.
Bernanke's fav songs: "Luck be a Lady" and "My Way"
We passed the point of no return, but it is do or die. He is trying to drive this car with bad steering, bad breaks, a foggy windshield, and a bunch of yankers distracting him and trying to wreck the car. Soft money is poor man's money. Hard money favors the wealthy. Tight money right now will do us in for sure.
How much longer are they going to listen to that fucktard? 'The Bernank' needs to go, and he can take the 'Jeethner' with him.
"Even better the national debt can be paid down with cheap dollars."
Yup, fine, except when the debt keeps getting larger.
Bernanke, SURELY, must realize he's between a rock and a hard place? SURELY?!
DavidC
Whew, this is all becoming a bit like an old Queensryche song, isn't it?
"Who do you trust, when everyone's a crook
Revolution calling
Revolution calling
Revolution calling you.."
Song isn't that old.
Dude that was 1988!
they got all Dream Theaterish in a bad way afer Empire.
thanks for playing ;)
Very concise and accurate representation. When unemployment doesn't come down Bennie will indeed be worried, as he will have more on the line than just his job.
I honestly believe Bernanke believed he was doing the right thing . He was trying to prove his life's work was correct . Now I believe he knows he wasn't correct and this is just a bravado at this point or pushing it to the limit (like madoff)til he can't. He will probably commit suicide sooner or later . Who wants to be remembered as the guy who saved the world from a recession by making the worlds largest depression ?
Committing suicide for a reason would require him to recognize the enormity of his errors first.
Never going to happen, he will keep up the self-deceit no matter what.
...because at the end of the day it has no more gravity than a typo in a draft of his doctoral dissertation.
He's trying to fix mistakes he made during the first round and knows he's in trouble. It is not about his job. He doesn't want to go down in history as the eddumacaaated guy that contributed to the "end".
In any event, considering how significant TBTF and corporate leverage is, along with the rest, not a great deal more he can do given the political climate.
PS--and we ALL better remember Zombieland Rule 1 and 20. Hopefully we won't need it and food will be plentiful.
bingaling,
I used to think that way too. Now I just think he is the worlds biggest crook.
I just can not understand how so many think there is something called "free".
If Big Ben gave me a gold coin, and said; Here you can have this gold coin,
it's "free"! I would not think for a moment it was free. I would think it did
not cost me anything, but some other person(s) had to pay for it. It would be
just be who, and how much. As late father would say; Son, every dollar in your
wallet came out of some else's wallet. Oh; Big Ben is just like the rest of us.
He takes care of his own people first. No one should not be unanswerable to
any one.
As late father would say; Son, every dollar in your wallet came out of some else's wallet.
The magic of fractional-reserve banking allows you to have dollars in your wallet that came from no one else's wallet. That is the so-called money created out of thin air. Or maybe your dad considered the Federal Reserve to be "someone-else's wallet".
Anybody else want to "post hoc, ergo propter hockey-stick" the Bernankster in the nads?
Let's do it. Yea, ok. Party on, Garth!
I'm willing to tithe 5% for enough chains to place on all the rascals between the FRB and Wall St.
I'm willing to tithe 5% for enough chains to place on all the rascals between the FRB and Wall St.
....for a visual of this talk just look at the silver chart today....
Perhaps we should take up a collection to fund more talks by Ben...I'd be willing to tithe 5% of my daily silver gains....what say you?
I'm in.