What "Car Salesman" Ben Bernanke Said At Dinner Last Night

Tyler Durden's picture

From Simon Black of Sovereign Man

What Ben Bernanke Said At Dinner Last Night

Last night I attended a private function put on by the National Economists Club where the guest of honor was none other than Ben Bernanke. You can read his full speech to the attendees here.

Meanwhile, I'm still trying to figure out how a guy with my views was even allowed in the room. 

But since I was already scheduled to be in the US this week to speak at a conference in Miami, I jumped at the chance to enjoy Bistro Filet and economic doublethink.

I've always wanted to find out for myself-- does this man actually believe that printing money is the path to prosperity?

As it turns out, he does believe it.

At one point during the evening, when pressed about whether his Quantitative Easing program was good for Wall Street at the expense of Main Street, he flat out denied it, saying that such a premise is "simply not true".

He defended his printing $85 billion per month, suggesting that fixing interest rates at zero is beneficial for society because, among other things, it allows people to 'buy cars'.

I saw these words coming out of his mouth and thought to myself, "Is this guy f'ing serious?" Cars. Wow. As if going into debt to purchase a rapidly depreciating consumer item is somehow a victory for the people.

Fixing interest rates at zero screws responsible people who save.

My mother, for example, is completely risk averse. She holds the entirety of her savings in a bank account, and nobody can convince her otherwise.

What she doesn't realize is that the interest rate she receives is below the rate of inflation. So year after year, the purchasing power of her savings declines.

This point seemed completely lost on the Chairman.

He also dismissed the Fed's role in the growing wealth gap here in the Land of the Free.

As we've discussed before, recently published data show that the US wealth gap is at its highest point since 1929.

For this, the chairman blames trade globalization, saying that the wealth gap is a 'complicated phenomenon'.

He also stated flat out that there's ‘not much the Federal Reserve can do about long-term trends like [the wealth gap] that don't have much to do with monetary policy.'

Right. Keeping interest rates at zero so that bankers and the ultra-wealthy can see their portfolios rise to record levels while the middle class gets hosed by rising costs of medical care, education, food, and fuel has nothing to do with monetary policy.

This may have been the most intellectually disingenuous thing I heard all night.

Mr. Bernanke also made it quite clear that they were going to keep printing no matter what.

In his own words, he told the story about how they had tried issuing forward guidance... first suggesting that Quantitative Easing would last through 2013. Then they changed it to 2014. Then 2015.

Finally they changed the target altogether, announcing that they had set a threshold for the unemployment rate of 6.5%... but that this figure was just a 'threshold', not a 'trigger'.

In other words, even if the official unemployment rate moves below 6.5%, the Fed isn't going to end QE. They will at that point START to look at other data, like the Labor Force Participation Rate (which is at its worst level since 1978).

He also hinted that their unemployment threshold was not set in stone... which I took as a sign that they would probably lower this threshold even more, paving the way for several more years of printing.

And even if they do let up on Quantitative Easing, he stated very plainly that the Fed would still likely keep its target interest rate at zero.

Bottom line, it's not going to end... at least, not voluntarily. It's going to take a full-blown currency crisis before the Fed gets a whiff of reality. 

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Sudden Debt's picture

Why is that?

BERNANKE'S MY FRIEND!!!

I WANNA BUY A SILVERCOIN WITH JUST HIS HEAD ON IT!!!

a blank...

SERIOUS!! THAT GUYS IS MY SILVER'S BEST FRIEND!!!

nope-1004's picture

This is why Bernocchio is quitting.  He can't even lie good anymore, and has no wiggle room.  The FED is stuck.  The FED is exposed.  They have ruined the economy in the name of saving their big banking buddies.

I hope he rots somewhere.

 

 

NotApplicable's picture

He never could. Honestly, it's his only true failure in the job.

Yellen though, won't have to worry about it, as she's got that evil, confused glare that sends all antagonists packing (engagement is pointless).

Skateboarder's picture

National Economists Club...

*can't stop puking*

101 years and counting's picture

I wish I was Simon Black just for last night.  I'd be in jail right now, but it'd be worth it.  At the minimum, I would have beaten the shit out of Bernanke. 

MillionDollarBonus_'s picture

Awesome advice for government retirees over at the Accredited Times:

http://accredited-times.com/2013/11/15/retirement-tips-for-government-wo...

Well worth a read if you've just retired from a government job or are a soon to be government retiree.

Keyser's picture

This is what happens when you live in an ivory tower, you lose touch with reality. The air must be rarified in the Fed's conference rooms. Either that or they're pumping nitrous in through the aircon vents because this is some silly shit. 

 

fonzannoon's picture

I forgot who said it yesterday, Seek maybe....but these guys are just a bunch of fuckin aliens. Bernanke even looks like one. I always found this to be strikingly similar to what I see going on today when I see Bernak testify to Congress.

http://www.youtube.com/watch?v=LMZJ-mM2n9A

 

 

eatthebanksters's picture

They will keep printing as long as the government keeps spending like a drunken sailor.  The route of transmission for the capital will change from enabling small business people to thrive to supporting big business and then taxing them and paying for huge entitlement programs that don't work.

This country will decay slowly unless there is a black swan event that sets the reset switch.  When that happens politicians and bureaucrats like th Bernanke will face the music for lying to the masses.  I almost can't wait for that day although it scares the shit out of me to think we will be living like the Road Warrior for a while.

RSloane's picture

So that's where Monendas went to. Read comments section of Accredited Times. LOL!

donsluck's picture

I think Whalen is right, as well as Krugmans' long depression piece in the newspaper today. I think they are both missing the point, however. We are in a transition from a credit based economy BACK to a capital based economy. Very painful yet unstoppable, and the CBs attempts at stopping it is killing all economies.

MachoMan's picture

We are in a transition from a credit based economy BACK to a capital based economy. Very painful yet unstoppable, and the CBs attempts at stopping it is killing all economies.

Touchdown.  What, like we're supposed to go from an overclown credit economy to an infinite credit economy?  Ok...  There will be plenty of central banks go bust trying, but....

Kirk2NCC1701's picture

Folks, MDB is merely trolling on the ZH site to drum up business on his own site.

Respond to MDB only if you truly want to support him, and NOT because you think that your indignation/venting or your wit will make any difference to MDB.  Cause it won't.  Just (fucking) ignore him.

TheFourthStooge-ing's picture

MDB said:

Awesome advice for government retirees over at the Accredited Times

Oh, that one's a dandy article. It comes on strong from the very first sentence:

"One of the major difficulties of having a government pension is the sheer quantity of money that has to be managed."

Amazing. That has ZH guest post written all over it..

max2205's picture

Let them buy cars...he just really meant it helps his gdp numbers and GM

 

he is a criminal. .stupid...or retarded. ..or all three

TheReplacement's picture

He's making himself and all his pagan breathren rich.  He's doing it with ill gotten goods.  He's doing it blatantly.  He is retiring and going to get away with it.  Stupid and retarded don't apply.

MachoMan's picture

Whether or not he gets away with it will largely depend on how long the economy lasts post tenure.  I think there's a better chance than not that everyone soon realizes the wheels fell off a long time ago.  At the very least, his legacy will be severely tarnished...  Greenspan had the sense to pass the torch before everything imploded proper and his legacy has still been shit on pretty hard...  In short, the court of public opinion has already convicted him and whether or not this translates into any formal punishment is up for debate.

Kirk2NCC1701's picture

Just another HEAD FAKE.  And an "OJ Simpson-class" head fake at that.

VD's picture

YOU ARE LISTENING TO PHD THAT HAS NEVER EVER WORKED A REAL SINGLE DAY IN THE PRIVATE SECTOR IN HIS ENTIRE LIFE . WTF DO YOU EXPECT TO HEAR¿¿¿

VD's picture

and could you imagine Bernanke negotiating for a used car? now that would be priceless! or selling one? fucking scary prospect...

Skateboarder's picture

He would sell you a used Ford Focus with a 100k miles on it for 85B, and you would walk away with a smile on your face cuz you just got such a good deal on your -1% ARP.

VD's picture

he wouldn't sell me shit and he never has, despite tidy front-running profits thx to him. put another way, he's paid me to date to walk away from his jalopies.

Sudden Debt's picture

well... in a way...

I never worked for the FED in my life...

so who's to blame?

VD's picture

in your case you can thank yourself for that. the problem is we look at the unsustainable rigged bullshit ponzi and rationally know it is only supported by sociopathic QE policies and yet we still aren't baffled by the double-speak.

Gringo Viejo's picture

Less the PHD and you're talking about the POTUS.

VD's picture

the unqualified generally hire each other, hence Mr. QEeen4EVA Yellen: another one that has never worked day in her life in private sector. it's the club of ineptitude academia.

pods's picture

Oh, so they are INEPT?  That is the excuse?

They know EXACTLY what they are doing. Always have.  Their only problem is keeping the game going while keeping us from realizing their game.

Make no mistakes, these people are not dumb, not inept. They are fractional reserve bankers, just doing what they do best.

pods

RSloane's picture

As long as he said "its simply not true" it must not be and I feel so much better.

fonzannoon's picture

Alright I can't help it. Simon is kind of growing on me a bit but I can't help myself here. Am I to believe that the man who drinks absynthe on a chilean mountain top while playing poker with a snow leapord can't convince his own mother not to keep her money in the bank? I thought Simon could talk the balls off a Rhinoceros. His own mother does not trust his advice? 

When I used to picture Simon all I could see was this guy

http://www.youtube.com/watch?v=9WRf6Q1o7PE

but now all I see is this

http://www.youtube.com/watch?v=CqwAXk8c2Ew

RSloane's picture

LMAO!! Is that evolution or devolution?

fonzannoon's picture

lol you always ask the hard questions.

DanDaley's picture

Haha, I was thinking the same thing...mom won't even listen to the international man of mystery...I guess he will always be just her dufus little kid in her eyes.

Sudden Debt's picture

like new...

that's like dating a +30 year old woman...

like new... with miles on it...

Headbanger's picture

+30 would be new enough for me cause they sure don't have the miles on em like the +50 set does.

Sudden Debt's picture

The 50+ set doesn't have a boardcomputer... and they don't need that expensive fuel to drive. 87 will do just fine...

that 30+ set does... every bump in the road... every winter and summer... all recorded... and there's always some nasty shit under the hood...

 

But whatever...

AFTER YOU'RE PAST 18 YEARS OLD, YOU'RE LIVING IN A SECOND HAND MARKET!

Headbanger's picture

Yeah,  the maintenance can be very expensive on those +30 types. 

Plus they don't even cook!    Not good.

Janice's picture

The +30 and dating are the ones that 1) didn't know a good thing when they saw it and/or 2) jumped ship before things really got good. Not smart.

Life begins when the kids leave home and you're at the peak of your earning potential. SWEET!

J Pancreas's picture

SD, I had to login to green this comment. Hysterical and true at the same time!!!

Blano's picture

Our Belgian friend shoots, and SCORES!!! 

Incubus's picture

I prefer the +30 women.  Younger than 40s though.

their expectations are more realistic and they aren't as painful to have discussions with.

 

Stuck on Zero's picture

My favorite part about getting 1.1% interest on savings is the tax that I have to pay on those earnings!

 

Deo vindice's picture

Doesn't that just give you a warm, fuzzy feeling all over?

Just knowing that the taxes I pay on the after-tax money I save can help both the artsy crowd get a new Performing Arts Center or the shiftless 3rd-generation work-allergic family get their monthly social assistance cheque makes me feel like such a hero.

In fact, I think I'm going to go celebrate my feel-good-nicity and splurge for a small coffee and help the local economy. (I'd buy a medium-sized, but don't want to appear selfish to my fellow citizens I might meet there that may still be able to afford one as well)

Deo vindice's picture

To my downvoter - both examples I gave are real life ones where I live. (But then maybe you are in one or the other category, in which case I can understand you don't like my comment - because it is against the gravy-train you have gotten accustomed to riding)

Sudden Debt's picture

and than you have to calculate those earning on you taxform...

the work isn't justified :)

Thank god my money is gone for already a few years now.

*E*R*A*S*E*D*

Those who try to do that shit now will leave a bigger papertrail than me, that's for sure. 

Cursive's picture

I try to keep hyperbole and emotions out of my comments, but this evil BernanQE motherfucker and everyone like him needs to be stopped. ASAP.

Headbanger's picture

Oh, please.. Don't hold back now that you've made such a good start!

Deo vindice's picture

You know, there are perverts who think such mother-son relationships are not only normal, but to be applauded.

I much prefer to simply name people for what they are, rather than apply terms that are in all likelihood not true.

In Bernanke's case, he has sacrificed his soul on the altar of present gratification. Sadly, it is not something unique to him.

It is not money that is the root of all evil, but, to correctly quote the phrase, it is the LOVE of money that is at the root of all (kinds of) evil.