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As ECB Frets About A Rate Hike, Bernanke Defends Easy Money Policy, Blames China

Tyler Durden's picture


In yet another very unsurprising event, Ben Bernanke was speaking at the Banque de France Financial Stability Review Launch Event, where per his prepared remarks he once again defended easy money policies so critical at keeping the S&P a few thousand points above fair value over the past two years. Making it once again clear that Bernanke has no clue about how economics works, the Chairsatan was quoted as saying that "The rest of the world has an interest in the U.S. recovery that my policies are spurring." Of course by pursuing his ZLB/ZIRP policies (see, we can name drop too), the Fed is doing nothing but exporting inflation to those countries least capable of handling it, which tends to lead to such inevitable events as government overthrows and revolutions.

The Fed's scribe at the WSJ has more:

[Bernanke] said policy makers abroad have plenty of tools to fight inflation and asset bubbles themselves, including allowing their exchange rates to adjust higher to prevent overheating. Mr. Bernanke also said surging growth in developing economies, spurred in part by their own economic policies, were causing trouble for America.

"Spillovers can go both ways," he said. "Resurgent demand in the emerging markets has contributed significantly to the sharp recent run-up in global commodity prices."

G-20 leaders last gathered in Korea in early November, just a few days after the Fed announced its plan to purchase $600 billion in Treasury bonds. The bond-buying program is known as quantitative easing and is meant to hold down long-term interest rates, push investors into riskier assets and stimulate growth. Fed officials faced criticism at the Korea meeting, particularly from China and Germany, for stoking inflation and trying to push down the dollar, a reaction that caught Fed officials off guard and miffed Mr. Bernanke.

He said the fast-growing developing economies could use "exchange rate adjustment, monetary and fiscal policies, and macroprudential measures" to cool their own overheating.

The reference to exchange rates seemed directed at China, though Mr. Bernanke didn't refer to China by name in his comments. Instead, he said countries with large trade imbalances need to "allow their exchange rates to better reflect market fundamentals and increase their efforts to substitute domestic demand for exports."

Mr. Bernanke's reference to macroprudential measures referred to efforts to strengthen global financial regulation.

The U.S., meantime, needs to put its own fiscal policy on a more sustainable path, he said, referring to the need to shrink the federal budget deficit.

In other words, in another evident confusion of cause and effect, Bernanke blames inflation on hot money flows in and out of given regions, and completely ignores that said money flows tend to originate at his very own printer, and are conceived by those (read 20 Primary Dealers) who have unfettered access to the Fed's infinite liquidity (soon that Venn Diagram will be expanded to include everyone, but not before those in the smaller version have used up all existing liquidity to buy all non-dilutable asset limit up for the current monetary regime).


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Fri, 02/18/2011 - 09:28 | 973651 Robslob
Robslob's picture

Blow up everyone else before you blow yourself up last I always tell my kids...God Bless Amerika!

Fri, 02/18/2011 - 09:56 | 973720 blindfaith
blindfaith's picture

There is one BIG problem with how Americans think verses how other nationalities think...especially the Asian and Mideastern people.

We insult, double cross, lie, cheat, steal, insult...and expect all to be forgotten the next day, overlooked, etc...childish thinging.  This American 'trait' is NOT held by other nationalities as such...they hold those thoughts, those insults and transgressions for generations.  And, we wonder why we are hated so much by so many for what 'we see' as nothing- this 'ain't no big deal bro' thinking.

China will only take so many insults from the inbeciles in Washington and then 'that wil be that' and a new chapter will begin.  Saving face is a concept that Americans have long forgotten.   We have no problem having two different Presidents get drunk at China's dinner table, and then turn a deaf ear to the protesters allowed to scream all night long under the windows at Blair House when China visits us.

China has what it needs to shut of itself from us and never blink an eye.  They have our technology, educated men and women, and they NOW have all the resources they need for years to come. They have a new society of consumers who need to buy from Chinese businesses not American ones.  They have all they need at their fingertips.  They are what America was 75 years ago, plus they have the collective mindset of 'oneness' for China which Americans have been striped of, or cast of as so much unnecessary baggage.

We smugly underestimate what China is, for that stupidity we will surely regret one day.

Fri, 02/18/2011 - 09:59 | 973752 BKbroiler
BKbroiler's picture

'"ain't no big deal bro' thinking"

+++, nailed it

Fri, 02/18/2011 - 10:07 | 973763 Zero Govt
Zero Govt's picture

Credit where it's due foreigners don't hate Americans per se they're astute enough to just hate the US Govt and vested interests ...the peoples of the world have no beef with each other at all. the world's 98% at peace... it's The Parasite Clubs in each country that are spoiling the harmony ....did you see Hilary in Egypt spit out her dummy, my what a show of petulence! 

...soon as we cut out the diseased loonatic fringe of Club Parasite we can return to the peace and sanity of the Global Village 

Fri, 02/18/2011 - 10:22 | 973828 Bob
Bob's picture


Fri, 02/18/2011 - 10:52 | 973925 mmlevine
mmlevine's picture

You could not be more wrong.

China produces crap to be shipped to the USA and you think they could shut themselves off from us and "never blink an eye"?  Nonsense.  The USA and China are intertwined so tightly neither one can walk away - it's mutually assured economic destruction. 

Millions of Chinese work in factories for 10 months a year and then bring the money earned back to their home villiages to share with the family.  The money lasts a year and the process is repeated again next year.  If China wants to shut itself off from the USA, what happens to these workers?  Do they work in the rice paddies like they did 100 years ago? - I don't think so. 

China has done well economically in the last 30 years, no doubt.  Unfortunately, they are interpreting that success as a one sided accomplishment.  What needs to be remembered is that the USA and other countries bought crap from China because it was cheap.  Prices are starting to go up and you can bet that American based Retailers and Wholesalers are starting to look for alternative sources - not China.

I hope and pray that some of that manufacturing comes back to where it was invented and belongs - the USA.

Fri, 02/18/2011 - 14:25 | 975015 Obnoxio
Obnoxio's picture

I'm more with mmlevine in regards China. China is printing money faster than the USA and has the governments hands in everything. Their demographics trends are much worse than the USA due to one child policies. Even if the Dollar defaults quality of life will remain much greater in the USA in my opinion.

Fri, 02/18/2011 - 19:56 | 976071 blindfaith
blindfaith's picture

Apple alone ( the manufacturers in China for Apple) have 1,000,000 workers in China making their products.  Do you think those jobs can come here? Oh, sure, when the American worker is willing to accept 20.00 a week wage.  Any jobs related to electronics, can they come back? Even Our Military has a great number of 'parts' made there now...ask Boeing.

If you stroll around the USA supermarkets, you will find an astonishing number of food goods now from China.  Just look at the seafood dept, for example.

China has most of the resources for rare earth metals, they have coal, water power, now oil, and the resources in the yet, even the un-tapped provinces wealth in resources would make Washington envious.  What China does not have inside their borders, they have contracted for outside...bought and paid for.  The arrangements in Africa, South America and Central America, let alone Australia are mind numming.

Who has a large percentage of oil contracts in Iraq...US???, no them.  Who runs the Panama Canal, us? them.  There are many more examples that most of us don't know or have forgotten.

No China does not need America, like the rest of the kool aid we are told to believe, America needs them now.

We all believe that the sun will come out tomorrow, that God has chosen America to be the number one pet...well I don't think so anymore.


Fri, 02/18/2011 - 10:52 | 973928 Richard Weed
Richard Weed's picture

Actually Bernanke is forcing China's hand at revaluing the Yuan.

China only cares about China, and Chinese world dominance.

Their Achille's heel is their fear of social unrest.

By causing inflation in China (especially food inflation), Bernanke is using China's reluctance to free-float the Yuan against itself.

Actually this is a brilliant move... too bad few of you understand it... but I bet all of you that China understands it very well.

But what do I know... I am just a Dick Weed.

Fri, 02/18/2011 - 09:33 | 973652 cossack55
cossack55's picture

So, we know he is Satan, but is he also a Malthusian?  Can he see all the good in 1.7 billion killed.  How high will that pump the Dow?  Do we buy the dips or the ditches? Does Monsanto hold the rights to Solyent Green production or does that fall under JPMs EBT card program?

Fri, 02/18/2011 - 10:15 | 973809 The Limerick King
The Limerick King's picture

Bernanke is towing the line

Proclaiming that everthing's fine

He follows his Master

Prepare for disaster

The world has been conquered by swine.

Fri, 02/18/2011 - 10:34 | 973872 aheady
aheady's picture

Outta sight. Thank you.

Fri, 02/18/2011 - 09:30 | 973655 Duuude
Duuude's picture

"...Macroprudential..." Damn kids inna treehouse again.

Fri, 02/18/2011 - 09:34 | 973668 Sutton
Sutton's picture

"My policies are spurring".  Wow.Can't believe he said that.  He's building a file of quotes that are going to scorn him.

Fri, 02/18/2011 - 09:40 | 973695 I think I need ...
I think I need to buy a gun's picture

regarding "my policies" he's letting China take the rest of the gold out of the gld so they have enough for the reset

Fri, 02/18/2011 - 09:45 | 973711 jobs1234
jobs1234's picture

I know, I like how its "his policies". Way to be a team player.

Fri, 02/18/2011 - 09:46 | 973717 HoofHearted
HoofHearted's picture

And we've all read those great quotes from 1928-1929, also...the ones about the Titanic, the Hindenberg. He'll just be added to that list of infamously wrongheaded ideas at exactly the wrong time...

Fri, 02/18/2011 - 09:34 | 973669 Johnny Lawrence
Johnny Lawrence's picture

I seriously want to fight him.  Like fist fight.

Fri, 02/18/2011 - 09:34 | 973670 bigelkhorn
bigelkhorn's picture

Yes but can you seriously sit there and just admit to your self that bernanke is a normal person. Not to mention he is one of the elitists that are brining down the US and other global economies with it. I love the fact he sits there and acts nervous, listen to his voice, he is a great actor people. Just watch him and his facial expressions.

Yes I know people say he is a liar and cheater...yes, but then people just stop. They do not go to the next step that he is one of the dark horsemen that keep telling us that the economy is failing. he is one of the helpers that engineered this whole mess a pupper, where the masters behind the scene pat him on the back, and are prob paying him for doing such a good job. 


I just get an eery feeling every time I see him on the TV. Anyone else in here feel the same? does your skin crawl? ekkkk!!!



Fri, 02/18/2011 - 09:48 | 973726 HoofHearted
HoofHearted's picture

I keep getting closer and closer to the tinfoil hat types who keep the words Bilderberger, CFR, NWO, and Trilateral Commission right at the tips of their fingers. I'd prefer my hat to be made of silver and gold, though.

And if such conspiracies exist, the Bernank certainly works for them. He's probably one of those Skull and Bones bastards too.

Fri, 02/18/2011 - 09:34 | 973671 gordengeko
gordengeko's picture

The Bernanke "Do you know who I am??"

Miguel Cabrera "Do you know who I am??"

The Bernanke "Do you know who I am Mother fucker??"

Miguel Cabrera "Do you know who the fuck I am??"

Yep, this is gonna end well for everyone.

Fri, 02/18/2011 - 09:35 | 973673 bigelkhorn
bigelkhorn's picture

Yes but can you seriously sit there and just admit to your self that bernanke is a normal person. Not to mention he is one of the elitists that are brining down the US and other global economies with it. I love the fact he sits there and acts nervous, listen to his voice, he is a great actor people. Just watch him and his facial expressions.

Yes I know people say he is a liar and cheater...yes, but then people just stop. They do not go to the next step that he is one of the dark horsemen that keep telling us that the economy is failing. he is one of the helpers that engineered this whole mess a pupper, where the masters behind the scene pat him on the back, and are prob paying him for doing such a good job. 


I just get an eery feeling every time I see him on the TV. Anyone else in here feel the same? does your skin crawl? ekkkk!!!

Fri, 02/18/2011 - 09:37 | 973681 max2205
max2205's picture

speaking of hikes, check out Beckies boobs...did she ever get a boob job!,,,,girls always pick too big for boob jobs...they are huge normus!

Fri, 02/18/2011 - 09:37 | 973682 razorthin
razorthin's picture

FuKk other countries, shalom is fuKKIng savers HeRe and NOw

Fri, 02/18/2011 - 09:38 | 973683 Twindrives
Twindrives's picture

Bernanke and Obama.......dynamic duo.......ass clowns of the universe.

Fri, 02/18/2011 - 09:38 | 973685 Thorny Xi
Thorny Xi's picture

It's "all part of the plan" ... everything is proceeding on schedule. 

Fri, 02/18/2011 - 09:38 | 973686 NotApplicable
NotApplicable's picture

Chairsatan was quoted as saying that "The rest of the world has an interest in the U.S. recovery that my policies are spurring."

I'll note that he didn't say it was a positive interest.

Fri, 02/18/2011 - 10:40 | 973887 aheady
aheady's picture


Fri, 02/18/2011 - 09:39 | 973693 gwar5
gwar5's picture

Well that sums it up.

Being able to scapegoat China means Bernankestein is glad when inflation rages and people riot around the world in his economic war against China for money system supremacy.

He has weaponized the currency. What he is doing to China and the global economic system is what the masters of fiat have always done to populations throughout their history. That's why we need to end the central bank system monopoly and get back to a gold standard.


Fri, 02/18/2011 - 09:48 | 973724 jobs1234
jobs1234's picture

What I am perplexed by is - why dont they fight back? I can think of multiple ways China can put the screws to him and Geithner, starting with Treasuries and moving down the list into an outright trade war that would pound our multinationals.

I cant believe they just sit there and put up with his BS

Fri, 02/18/2011 - 09:55 | 973742 HoofHearted
HoofHearted's picture

The chinese have much more patience than Westerners. And they'll put up with a lot, all the while laughing about how the arrogance is really going to come crashing down...and it will be worse for the US the longer that the US is allowed to continue in its asshat-ery. The time will come...kaboom!

Fri, 02/18/2011 - 10:27 | 973849 Bob
Bob's picture

Yup, it's pretty easy for a secure man to take a little shit knowing how it's gonna be if he finally has to open that can of whup ass. 

Fri, 02/18/2011 - 11:04 | 973960 mmlevine
mmlevine's picture

Secure man?  The Chinese?

They build the largest shopping center in the world and it's 98% vacant!  They build towns with 20,000 dwelling units and then demolish them.  Does that sound like acts of secure men?

Fri, 02/18/2011 - 11:11 | 973974 Bob
Bob's picture

Sounds like people who march to their own drummer, for sure.

It's a great story.  It reminds me of a country that now has 3 million empty homes and maybe 70% commercial real estate occupancy. 

But, fact is, they really don't compare, do they?

Fri, 02/18/2011 - 11:49 | 974199 mmlevine
mmlevine's picture

Sounds to me like the people in charge at the CCP have one fear - the revolt of 1.3 Billion people.  So they create some work for the people to keep them at bay then, knock it down.  Sounds like China has their own Ponzi thing going on over there.

3 mil empty homes and overbuilt CRE in the USA is a tragedy and probably the biggest crime ever committed.  You're not going to get an argument from me.  We have been raped by banks and politicians for decades.  I for one suffer but at least I know I got screwed.


Fri, 02/18/2011 - 10:20 | 973825 earnyermoney
earnyermoney's picture

Why do you assume they are not fighting back?

Fri, 02/18/2011 - 10:56 | 973941 jobs1234
jobs1234's picture

I havent seen them do a single thing to challenge QE2. How about not buying treasuries? how about further trade barriers to hurt US multinationals?

Do they not understand how little confidence Americans have in current treasury yields?

Fri, 02/18/2011 - 10:31 | 973863 dark_star
dark_star's picture

there's probably a sun tzu quote for that...

Fri, 02/18/2011 - 09:49 | 973727 BKbroiler
BKbroiler's picture

"He has weaponized the currency"

+666.  and for having gwar in your moniker.

Fri, 02/18/2011 - 10:17 | 973814 Caviar Emptor
Caviar Emptor's picture


Fri, 02/18/2011 - 09:44 | 973706 razorthin
razorthin's picture

The US., meantime, needs to put its own fiscal policy on a more sustainable path, he said, referring to the need to shrink the federal budget deficit.

I see.  That is a totally unrelated issue, huh?  The fact that fiat can materialize from nothing and the fact that the debt can be so "easily" monetized has no impact on fiscal policy makers whatsoever.

Fri, 02/18/2011 - 09:45 | 973707 BKbroiler
BKbroiler's picture

The world really should send him a gift basket, at least. Maybe the Time article got to his head, but I'm not surprised he's backing his own decisions. I'll be surprised when he shapeshifts into an alien and starts handing out Ameros, proving all my theories correct.

Fri, 02/18/2011 - 09:45 | 973709 Oh regional Indian
Oh regional Indian's picture

Macroprudential? Has Benbabwe looked int he mirror lately? And said to himself, hey, maybe I should think macroprudentially?

What a word. What a man. What a time.

Macroprudential measures! Too funny!


Fri, 02/18/2011 - 09:46 | 973713 Rich V
Rich V's picture


What do the members of ZH think?


1) Chairsatan believes the BS that spews from his mouth and thinks his efforts will benefit the economy as stated



2) Chairsatan knows exactly what he is doing to the economy and willingly tells us sweet lies since telling the truth destroys his true plan.

Fri, 02/18/2011 - 10:35 | 973871 Bob
Bob's picture


He's that fucking crazy.  But then, all the people around him luv him. 

Fri, 02/18/2011 - 09:45 | 973714 JPL
JPL's picture

Let him talk, he will surely disqualify himself with this kind of rhetoric :

“The preference by so many investors for perceived safety created strong incentives for US financial engineers to develop investment products that ‘transformed’ risky loans into highly rated securities,”

Fri, 02/18/2011 - 09:47 | 973718 redarrow
redarrow's picture

It infuriates me. The US wants to keep the dollar as the reserve currency of the world and also wants to keep it weak. Folks, this is a beggar the world policy while the fat Americans can do whatever they want like lie, cheat, steal and bomb. The worlds back hurts from the weight of these asswipes.

Oh...why can the world not see this BS and just delink themselves gradually from the US dollar is beyond me. First they should ban imports/exports to this country and trade among themselves like the recent agreements between China/Russia in their currencies. That will end the constant nuisance this country is.



Fri, 02/18/2011 - 09:50 | 973728 jobs1234
jobs1234's picture

What they need to do is revolt against our treasuries. The fact that they keep buying them amazes me.

Fri, 02/18/2011 - 11:27 | 973916 Bob
Bob's picture

If they finally go ape shit, dropping $800B worth of Treasuries will be a small price to pay.  A decent shooting war would cost alot more--and it's not as though they'll get nothing on the sales.  Sure, the EU would crash, but they could quickly step in as savior. 

The beauty of it is that the US couldn't even scream that it was an Act of War.  The Chinese only have to say that they needed the money to feed their people!  What could we say--they should let them starve?  Nobody would buy that.

We'll die on our own petard.

Fri, 02/18/2011 - 19:22 | 975975 StychoKiller
StychoKiller's picture

If there's any justice to be had in this World, then you're correct.

Fri, 02/18/2011 - 22:59 | 976544 Bob
Bob's picture

I don't know about justice, but gamesmanship seems to consistently run that way.  Picture the US bitching about the Treasury dump.  China can say "What's the problem, anyway--does the US think that its assets shouldn't be used, that they are essentially not worth the paper they're printed on?  Can we not in good conscience sell them on the free market?  If it does in some way cost the US money, is the problem then that the US doesn't feel that it should pay its bills?"

I love the MAD argument that China would never do it because it would be suicide . . . especially coming from people who believe that the global meltdown is imminent.  If this shit is going down anyway, what's the problem, if you're China, with choosing the time? 

Even if a system crash weren't otherwise inevitable, would a crash necessarily kill China?  It would certainly kill the dollar . . . but I'm sure they would be more than willing to cooperate with the rest of the world in setting up its replacement. 


Fri, 02/18/2011 - 09:55 | 973738 BKbroiler
BKbroiler's picture

someone's visa got turned down.

Fri, 02/18/2011 - 10:02 | 973761 spartan117
spartan117's picture

+1000 redarrow

A lot of people, including some on this board, are naive to this throught process.

Fri, 02/18/2011 - 09:55 | 973740 redarrow
redarrow's picture

Let the man continue, one by one the oil producing countries will face riots and the dollar will cease to be the energy exchange currency. It will end like an egg falling on the ground.

Fri, 02/18/2011 - 10:08 | 973786 TeamAmerica
TeamAmerica's picture

Nothing we appreciate more than when the enemy identifies himself.  Thanks!

We'll be in touch.

Fri, 02/18/2011 - 09:55 | 973741 tmosley
tmosley's picture

Times have changed, our economy's getting worse.

Prices won't obey the Fed, can't even afford a hearse!

Should we blame the government, or blame society?

Or should we blame the commentors on TV?


Blame China!  Blame China!

With their squinty little eyes, and their heads so full of lies.

Blame China!  Blame China!

We need to form a full assault!

It's China's fault!

Don't blame the Fed, for my lost job,

The Chinese closed my factory, so I joined an angry mob!

My mortgage was affordable once,

I had collectables on every shelf,

but now my banker has told me to fuck myself!

Well, blame China!  Blame China!

It seems like everything's gone wrong since China came along.

Blame China!  Blame China!

They don't even have a free market anyway~

My son went to to be a doctor or a lawyer its true,

But instead he's at the welfare office in the queue.

Should we blame the teachers?

Should we blame the market?

Or the college that told him he'd get hired?

Heck no!

Blame China!  Blame China!

With all thier economic growth hullabaloo, and that Communist called Hu.

Blame China! Shame on China!


the goods we must stop,

the more expensive pop,

the diversion and fun,

must all be undone,

we must blame them and cause a fuss,

before somebody thinks of blaming uuuuusssssss!!!

*Blame China, shame on Chi~ina!*

Fri, 02/18/2011 - 09:58 | 973748 razorthin
razorthin's picture

I don't blame China.  They are debtless and wise.  Both things we are not.  They are also cunning and ruthless, 2 things we pretend to be.

Fri, 02/18/2011 - 10:06 | 973771 Oh regional Indian
Oh regional Indian's picture

Awesome tmos. You wrote that?


Fri, 02/18/2011 - 10:26 | 973845 tmosley
tmosley's picture

I did, just this morning.

Based on the Song from the South Park movie "Blame Canada".

Fri, 02/18/2011 - 10:54 | 973930 Bob
Bob's picture

Nice work!

Fri, 02/18/2011 - 10:00 | 973755 Johnny Lawrence
Johnny Lawrence's picture

Zerohedge should organize a protest at one of Bernanke's speaking events.  We have to mobilize against this guy.

Fri, 02/18/2011 - 10:01 | 973760 onarga74
onarga74's picture

Inflation? Inflation? We don't have no steenkin inflation...Ben Bernanke at recent press conference


Fri, 02/18/2011 - 10:02 | 973762 papaswamp
papaswamp's picture

It's like waving at someone driving off a cliff....see ya!

Fri, 02/18/2011 - 10:03 | 973765 Sathington Willougby
Sathington Willougby's picture

Insanity prevails.

Fri, 02/18/2011 - 10:08 | 973783 Alex Lionson
Alex Lionson's picture

HIS policies??? who the f... does he think he is? Sole American Ruler? He shows that America and the World depend on HIM? Ben Napoleon, pathetic!

Fri, 02/18/2011 - 11:11 | 973990 rufusbird
rufusbird's picture

""The rest of the world has an interest in the U.S. recovery that my policies are spurring."

I thought he meant the rest of the world has an interest in getting their investment in US Treasury securities back.

The main thing that stops them from taking more agressive action.

Fri, 02/18/2011 - 13:51 | 974645 TruthInSunshine
TruthInSunshine's picture

Ben S. Bernanke is my hero, and Lord Of All Keynesianists.

He will save the world, one mouse click at a time.

Do NOT follow this link or you will be banned from the site!