Moroccan Pottery Classes, Shrimp On Treadmills And Obamaphones - Bernanke's Biggest Bloopers Tie It All Together

Tyler Durden's picture

Those who listened to Bernanke's three hour oratory before the House Committee today noticed something different: the Chairman's tone was far more resigned, and as noted previously, on occasion devolved into incoherent, illogical ramblings that may be satisfactory for an introductory economics class at Clown College (aka Princeton), but certainly are inappropriate for the man who runs the world's most important printer.

And while as expected the bulk of the Q&A session focused on the sequester, there were enough pearls one could shake a GDP hockeystick at. We have extracted the best of these exchanges below. However, the definitive five minutes comes from this fiery confrontation between Sean Duffy and the Chairman, in which the republican has obviously had enough with the monetary policy chief coming in Congress and telling Congress how to conduct fiscal policy, when it is Bernanke's deficit-monetizing actions that allow zero-cost borrowing and thus profligate, indiscriminate spending to result in such lunacy as total US debt just hitting a record 16,618,701,810,927.77.  

From the negative jobs impact resulting from cutting Moroccan Pottery Classes, no longer handing out Obamaphones, stopping the payment of travel expenses for the watermelon queen in Alabama, and most importantly preventing shrimp from running on a treadmill, to Bernanke explaining how a 2% cut in the budget would result in mass mayhem, in the context of a 1% interest rise resulting in $100 billion in additional interest expense, and much, much more, the Chairman ties it all together.

And much more:

On having tamed inflation:

MCHENRY: So to this point about inflation, many of us have this concern about how you're going to unwind this unprecedented portfolio that -- that you preside over or how your successor will unwind this or your successor's successor.


And the concern that we have is that you only can see inflation with hindsight. And the question I have to you is, with -- with the record of the 1970s, where in 1973, expected inflation was 3.75 percent -- that was a market expectation -- the Feds said 3.9 percent. The actual was 6.2 percent. 1974 inspected inflation was predicted at 6.7 percent. The Feds said 8 percent. Yet, the actual inflation was 11 percent. 1979, inspected was 7.3 percent. Feds said 7.5 percent -- actual was 11.3 percent. 1980, expected inflation was predicted at 11 -- 11 percent. The Feds said 7.5 percent, yet the actual was 13.5 percent.


The Fed has consistently gotten it wrong. Are your tools better now to see inflation than they were then when we had this great period of inflation?


BERNANKE: Our tools are better. But the environment is much better, because we now have 25 years of success in keeping inflation low and stable, not just in the United States but around the world. Inflation expectations are very well anchored, and wages are very -- growing very slowly.

Well, actually no:

"You Can Have It Both Ways"
GARRETT: With regard to the positive indications that you've indicated, you said the stock market and the housing market have gone up because of your monetary policy. But previously you have said that the Fed's monetary policy actions earlier this decade, 2003 to 2005, did not contribute to the housing bubble in the U.S.


So which is it? Is monetary policy by the Fed not a cause of inflationary prices of housing, as you said in the past? Or is it a cause of inflating prices of housing? Can you have it both ways?



The "Saver Has Many Hats": Apparently One Of Them Is Not To Save And To Invest In A Market That Has Doubled

CAPITO: You mentioned gas prices as a reason that's hurting our economy in general and certainly all of our constituents are feeling this very much. I think energy economy there again could answer in -- in a small way, and maybe a large way, the issue of gasoline as we move towards energy independence, so, you know, I would like to hear you talk about the energy economy more as part of our broader economy because I think it -- you said it's a bright spot, let's feature it as a way to pull ourselves out -- out of a slower recovery. So I would encourage you to do that.


My other question is on seniors. Many of us are in that sandwich generation trying to help our parents, and our parents are doing a pretty good job trying to help themselves.


But they're relying on their good planning and investments, if they've been lucky enough to invest. And the dividend and interest availabilities to them are crushing our seniors, as they see their health care costs go up. And some of the policies that -- that you've put forward I think and that -- and that the Fed has, has caused concern for those of us who are concerned about seniors who don't have the ability to get another job, can't -- you know, that's played out for them.


What -- what can I tell my seniors back home that is gonna give them some optimism that they're gonna be able to rely on that good planning that they had to carry them through to their senior years?


BERNANKE: Well, I'd say first that savers have many hats. They may own fixed income instruments, like bonds, but they also may own stocks or a house or a business. All of those other assets benefit when the economy strengthens.


BERNANKE: And those values have gone up, the stock market has roughly doubled, as you know, in the past few years. So from an investment perspective, there are alternatives.

Finally, contrary to prior confusion Bernanke does NOT offer financial planning seminars to 90 year olds

GARRETT: So the other area you indicated why we should say your policies are working in a cost-benefit analysis is the stock market. I'm sure you're familiar with Milton Friedman's work that says that people only really consume off of their permanent income, which basically means that you don't increase consumption because your stocks have gone up in the marketplace.


And to that point, I know Ms. Capito asked the question as to what seniors should do in this indication, and you said, "Well, take it out of some fixed assets and put it into the stock market." Heaven forbid that my 90-year-old mother would take her money out of fixed markets and put it in the stock market. I think that's probably the worst advice that's out there.


And when you consider that a 1 percent increase in the stock market only has infinitesimal, maybe one-hundredth percent increase in the GDP, I really don't understand, A, how you can give that advice; or B, how you can suggest that the increase in the stock market is a positive indicator of your work in a cost-benefit analysis of the rest of the economy.


BERNANKE: I was not giving financial advice. I apologize if I gave that impression. I was just saying that...


GARRETT: (inaudible) asking -- asking you the question: What should -- what should we be doing in the benefit to the seniors? What shall we say to the seniors? And your advice -- your comment was...


BERNANKE: My advice -- what I was saying was that the economy will get stronger because of good policies, and that, in turn, will cause rates to rise in a sustainable way. If we were to raise rates prematurely, we would kill the recovery and rates would come down and we would have a long-term situation with very low rates.
GARRETT: But would you -- wouldn't you have, A, provided for the certainty in the marketplace so you could have more price transparency? Earlier, you said that some risk-taking in the market is appropriate. That was one of your opening comments. Sure, risk- taking is appropriate, but appropriate when there is actual price discovery. When you have a market that is distorted as it is right now by the -- by the Fed's monetary policy, you really don't have true price discovery.


And so when you do risk-taking now, it's based upon not really knowing what the appropriate value is of land prices, equity market prices are. So risk-taking now is worse than risk-taking is when the Fed's actions do not distort the marketplace.


HENSARLING: The time of the gentleman has expired.

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fonzannoon's picture


"Fallen star Heebner places astronomical bet against Treasuries"

MrX's picture

you know what I have to think about that.....this:

flacon's picture

The American way:

HENSARLING: The time of the gentleman has expired.

flacon's picture

> Clown College (aka Princeton)


The irreverence shown to these academic institutions (particularly Princeton) is simply exhilarating to say the least!

smlbizman's picture

the bernank thought it was happy days when ron paul he has to deal with mr. sean duffy.....and i better get my kiln fired up today and glaze my bowls....the rug is being pulled out from under my morracan pottery class......fucking priceless

DaveyJones's picture

"devolved into incoherent, illogical ramblings" ...much like his policies

Cdad's picture

Keep it up, Tyler.  From start to finish, this particular Humphrey Hawkins gathering is literally a bonanza of Bernanke slip ups, confessions, and flat out bullshit.  Quite frankly, I am surprised that I am not hearing more on the MSM per this subject...but I expect  more in the coming days.

Total and complete disaster, Mr. Bernanke.

Stoploss's picture

Bernanke explaining how a 2% cut in the budget would result in mass mayhem..

He did not explain how a 2% payroll tax increase brought what was left of the economy to it's knees in 48 hours...


They're kinda funny like that.


Bernanke Klingon, meet Uranus. What goes around, comes around, to fuck oneself.

Someone stuff an apple into this pig's mouth, and roast him.

All he'es good for is joining the chestnuts roasting on an open fire..

max2205's picture

Suck it and die seniors". Nice Ben

hannah's picture

WOW..our bought and paid for politician sure showed that fucking jew banker what was what....and this changed anything how....?

Mr. Hudson's picture

Shrimp on a treadmill will be declared "unclean", and will be forbidden to be eaten in any Kosher diet.

Xibalba's picture

And Moroco will gain a point in gdp due to a less 'skilled' American{t} labor force

IEVI's picture

Why can't any of these congress fuckers pull up a chart like the one above when the Bernanke starts spouting his bullshit?

tekhneek's picture

He can pull out every chart and reference available. It would literally do nothing.

"Sources for charts by Representative X questioned."

 Crazy times indeed.

DaveyJones's picture

funny they'd cut out the Moroccan since most of the economy is held up by green tea and mint 

Mr. Hudson's picture

Bernanke quote of the day: "By having low interest rates, it helps boost the economy, which helps raise interest rates".


NoDebt's picture

Yeah.  That one is a classic.  In another thread here someone remarked "I think he's starting to lose it" about that comment.  Couldn't agree more. 

tekhneek's picture

I think it may be more of "I can't believe this is lasting this long." He's just rearranging the deck chairs...

All hail consumer confidence.

Go Tribe's picture

He said that, seriously? Fuckin' madman. And obamafonesalesman pulls a ship out of the Persian Gulf. Another madman.

BorisTheBlade's picture

What he meant to say is that to raise interest rate, one has to keep them low. Mathematically speaking, only way achieve that is (wait for it): to keep them unchanged. TADA. Here, can I has a PhD?

But honestly, what people do expect to hear from him, truth? Here, that's probably how truthful testimony from BB would look like:

"Dear Senator, Dear Members of Congress, Dear Americans,

I want to start my testimony from a enough simple question: what you f~cking morons still do not understand?! Here: our monetary system is broke, our entire system in fact is broke. Anything I say or do will not change that fact. We are broke and we f~cked up. Listen, even a 5 year old could comprehend the fact if the nation consumes more than it produces for a prolonged period of time, it goes broke. It's a simple fact, isn't it? So, what else is there to understand? Listen, we did everything, we hired rocket scientist (no, really, we did) to design financial instruments that nobody except them could understand, we pretended that debt can be called asset and most importantly convinced the entire world of that and we succeeded. During that period, you could overconsume and the rest of the world could overproduce and everyone was happy. Well, sort of happy, but you can't make everyone happy, can you? Those poor bastards in the 3rd world producing stuff we throw away are probably not happy, but f~ck 'em, nobody made them do it. Well, sort of. It's all one big clusterfuck at this point, I have interest rates to play with, but guess what, it's no longer working. Why? Simple, if I raise them, our debt loaded economy will crumble. Should I keep them unchamged, it will still crumble, only later, because in the meantime economy will amass even more debt. And of course I cannot lower interest rates, because they are already ZERO and you can't make them nominal negative, can you? It's all one big pile of debt that nobody can repay. Sh~t, even our unborn children already own us shitloads of money. Those little bastards are in for a big nasty surprise, hehe, but fuck 'em, nobody makes to be borne. Well, sort of. 

And adding insult to injury, the rest of the world already knows it's over and it's only you who still listens to me expecting that I say something that will magically fix everything. Nobody will buy into the same story again and AAA paper is as good as toilet one, I can still buy it and put it on our balance sheet, but nobody else would. Pesky Russians pulled out, Chinese sort of still here, but only because it's a clustefuck of its own to explain to one billion Chinese that 2 trillion they amassed while working hard is essentially worthless. Japanese? Yes, still here, but we'll soon glow in the dark after eating their sushi and indefinitely flipping debt with them. What do you expect me to do or say? You wanted truth, here it is: for the rest of your life you will work harder than ever before, wou will pay more taxes, you will owe more and more and will probably die poor and hopefully young. Pensions? Poof, gone long time ago. 401k? Poof, gone. Game over, go home. Oh sh~, bank repossesed it, tough luck.

And you Senator, you think you are better than me? F~ck you! You being here bought and paid by the fact that the Government can borrow and spend like a drunken sailor. You can try and question me further or we can pretend that everything is still fine, that the economy will grow again, pensions are still there and we are well into the recovery. This way nobody's getting hurt. Well, sort of.

Yours, Ben".


MoneyThangs's picture

Bernanke minus well of plead the fifth on every question meanwhile im sure authorities will find Sean Duffy's body butt naked in some farm in Iowa tomorrow and blame it on a hardcore meth addiction

akak's picture


Bernanke minus well of plead the fifth



faustian bargain's picture

I think he meant to say "Midas Well".

akak's picture

Actually, for all intensive purposes, I took it for granite that he did.

buzzsaw99's picture

bernaked chats it up with the peons in congress

Z''s picture

Okay, the shrimp on treadmills piqued my interest.  I HAD to know more...

From the Washington Times:

In one instance, he said NSF employees, in their spare time, engaged in a jello-wrestling contest at the agency’s McMurdo research station in Antarctica. In another instance, the agency paid $559,681 to test sick shrimps’ metabolism, which one researcher said was “the first time that shrimp have been exercised on a treadmill.”

Mr. Coburn’s report noted that the researchers found sick shrimp “did not perform as well and did not recover as well from exercise as healthy shrimp.”

An NSF spokeswoman said they have a “gold-standard approach to peer review” for the projects they spend money on.

Read more:
Follow us: @washtimes on Twitter

There you have it... the profound discovery!  BTW, I don't actually have much of a problem with the Jello wrestling on their own time, what else is there to do in Antarctica?  I'm just wondering when the Jello Wrestling Shrimp study will commence.

directive10-289's picture

Sick Shrimp? The treadmilling shrimp in the video below looks pretty healthy to me. I can see why a comittee of governement funded researchers had to study this pressing question.



Z''s picture

Great video!  Really brings home the point.


Okay, I guess I'm getting a little punchy here, waiting to start plans for the evening...

The Axe's picture

Scott Garrett for President!!!!!

tekhneek's picture

He better own the lions share of Diebold.

jtz5's picture

What does it say about our country that the best politician we have got his start on MTV Real World: Boston. I think Sean did a great job, maybe that's the key...we have to elect everyday Americans and not privileged Ph.D a-holes.

NoDebt's picture

Havng a member of Congress whipping on the Chairman of the Federal Reserve is like having your left arm beat up your right arm.

ebworthen's picture

Bernanke's mind must be like one of those M.C.Escher prints where the stairs go up and down at the same time - and an arch is a pillar and a pillar an arch.

Pareto's picture

That!  is fucking funny!  +100

jimijon's picture

And therin lies his genius. I am sure Dr. K would agree.

Implicit simplicit's picture

The weight of all the bags of money printed are weighing on his eyes. Notice the dark bags under the eyes. he will be happy to exit before tthe shit hits the windmill. His third eye knows the truth.

nightshiftsucks's picture

Bernanke got verbally bitch slapped

booboo's picture

They better be careful, this grilling of Bernanke will get them on the Anti Defamation League's shit list and hell hath no fury like a Jew Banker scorned. No Matzo Ball soup for you bitches.

edb5s's picture

LOL. At least wages are growing "very slowly." Thanks for the reminder, Bernank. I'm glad to see you've conflated the (mis)fortunes of an entire nation with your personal "my inflation is smaller than yours" pissing contest. All one can do is laugh (and stack/boat) at this point.

JLee2027's picture

I liked Duffy right there. He's got some liberatarian qualities.

adr's picture

You know, there are a lot of shrimp. If you make a lot of little treadmills and chain them all together,you might solve our energy problem. Think about how happy Forest Gump would be. 

Time and money well spent.

Although I do think the $20 million for studying the flow rate of ketchup was better. I mean when that fucking bottle let's out too much and it gets all over the fries, man I want to go postal. Also all that sodium just isn't healthy either.

Priorities, the watermellon queen has got to go show Michelle how to scarf down half a mellon in 15 seconds with class. It can't come across as racist when that image hits the net.

We haven't had inflation for 25 years. If you live in Detroit, $150k home in 1988 is what, $5k right now. Damn, Ben did good. Sure gasoline costs $4 a gallon but a decent cell phone is $80. They were a couple grand in the 80s.

Old people don't need money either. What do they need to buy? They are supposed to already have everything they need. What were they doing for 60 or so years?


Room 101's picture

So sorry. I missed your "fuck you bernanke" up thread.  Thanks for contributing that. 

Cabreado's picture

Bernanke is a jester, and the joke lies elsewhere.

Don't be distracted by little men, when the big show is a Defunct Congress.



csmith's picture

Just ONCE I wanted to hear it from the Bernank. But, alas, not to be:

"That's a clown question, bro."


"Resigned" is exactly the right word. Every time he talked, you could tell his inner child was screaming:


Bansters-in-my- feces's picture

All I can say is that fucktard is delusional.
Seriously....very very seriously.

Room 101's picture

What is with this thread?  There must be about 50 posts and not one poster has said "fuck you, bernanke."

Are ZHers going soft?  Please let me help. Repeat after me: 


See how it rolls off the lips?  A certain poetry to it, no?

Let's try it again:


It never gets old. 



jimmyjames's picture

If we were to raise rates prematurely, we would kill the recovery and rates would come down and we would have a long-term situation with very low rates

**************** happened to Greenspan when he thought he had the power to cool the markets and raised fed fund rates 17 times and the long end inverted to the point the FFR was above the 30 yr-

I think that gave the central planners a HF moment and i don't think bernanke wants to go there-

monopoly's picture

This is all starting to get scary. Anyone else feel like we are close to the end of our rope before the plunge? I know, I know, 4 years and waiting.....But, this feels.....different.