The Bernank Celebrates

Tyler Durden's picture

Submitted by James E. Miller of the Ludwig von Mises Institute of Canada

The Bernank Celebrates


BernankeSmilingWhen the last helicopter left the Vietnamese city of Saigon, Uncle Sam hung his head in defeat. The commies had won. The billions of dollars spent, lives lost, and damaged prestige were all lasting consequences. The war left a black mark on the U.S. government – though not one big enough to stop armchair generals from war-making in the Middle East decades later.

As one helicopter’s departure symbolized ignominy for a nation, another present-day lift off seemingly has fireworks going off in the background. Ben “helicopter” Bernanke just hosted his last meeting of the Federal Open Market Committee. He will soon bow out of his current position as Chairman of the Federal Reserve. His successor Janet Yellen is set to carry on his torch. The general consensus is she will embrace the very same policies of her predecessor.

For all his hard work, Bernanke is seeing praise from all corners of the media. In The Globe and Mail, business reporter Kevin Carmichael painted the outgoing central bank head a portrait of praise so colorful, Bernanke may as well have had a halo over his bald head. This isn’t the first time the central banker has gotten an abundance of praise. The Atlantic magazine famously declared Bernanke “The Hero” for saving the global economy. Likewise, Time gave him their Person of the Year award for 2009.

The media loves its heroes – especially when they work in the higher echelons of government. Compared to past laurels, Carmichael’s report is slightly less optimistic. Sure, he concedes, Bernanke is renowned for his relative grace under pressure. The question is: what’s the ultimate effect of his drastic actions in the wake of Wall Street’s near-meltdown? Will the economy keep rolling along as the unemployment rate drips lower? Or will the whole thing blow up in Yellen’s face?

Alan Greenspan left his spot at the Fed a veritable mensch. Just a couple years later, the housing bubble he engineered burst like water balloon. Now he spends his days irregularly commenting on the ongoing recovery, convinced that some people still care what he thinks.

Bernanke’s fate is still undecided, though some are ringing the song bell of victory. Richard Grossman, an economist at Wesleyan University, thinks that without Bernanke, “we’d be in a lot of trouble.” According to National Center of Middle Market director Anil Makhija, “[H]istory will always remember that he stood up at a very difficult time.” A majority of academic economists are in agreement: Bernanke used the printing press to keep the global economy afloat in the darkest days of 2008. When he first came to the Fed, the central bank’s balance sheet showed a total of almost $900 billion in assets – no paltry sum. When the Bernank leaves, he leaves behind a balance sheet of over $4 trillion.

For all his skepticism, Carmichael still seems to hold high views of the outgoing Fed chief. As he writes, “creation of money at that scale should have caused all kinds of problems by now: Runaway inflation, asset-price bubbles; name it. But it hasn’t.” The key here is: it hasn’t happened, yet.

The past few years haven’t just seen money creation the likes of which would make the planners in the Weimar Republic jealous. The Bernanke era also saw the mainstream economic profession chastise anyone who thought central bankers might just be clever by half. For Keynesians and statists, temperance is not allowed in the midst of a crisis. Government must act, and act it will.

Anyone who had the audacity to utter sacrilegious lines such as “maybe it isn’t a good idea to create trillions of dollars out of thin air “ was called a Cassandra or worse. Rampant hyperinflation failed to occur. The dollar did not go the way of Zimbabwe. The S&P 500 hit record highs following each bout of money injections. The amount of folks unemployed has dropped (though partially due to discouragement and a shrinking labor force).

With all this partial success and no slip ups, does Carmichael have a point in that Bernanke deserves an ample amount of praise?

Former MSNBC blowhard Keith Olbermann coined a term for this: premature jocularity. Bernanke is not breakdancing in the front lawn of the Federal Reserve building in Washington D.C., but he certainly isn’t displaying the humbleness of someone who’s unsure of their fate in the history books. New York Fed branch President Bill Dudley recently admitted his cohorts “don’t understand fully how large-scale asset purchase programs work to ease financial market conditions.” On the scale of admissions, that one is high-grade plus one. Dudley has operated the most important central bank branch in the country since 2009. The fact that they were, by all means, flying blind is not comforting.

To think that Bernanke’s extreme measures during the financial crisis will quietly slink away without consequence is an act of false comfort. The trillions added to the Fed’s balance sheet are not sitting quietly on the sideline. The dollars are working their way through the country’s largest corporations. Banks are pyramiding credit, creating money ex nihilo. The funds are likely finding their way to the stock market, often times reflective of investment in the capital goods sector. On numerous occasions, Bernanke has bragged about the robustness of Wall Street. Millions of folks might still be out of work but the banker class is living fat and happy. This is a central bank’s version of progress.

In recent months, the Fed has indicated it plans to incrementally scale back its economy-boosting efforts. This will be the final hurrah of Bernanke’s legacy – a calm unwinding of his life’s work. Even now, the delicateness of this plan is starting to show. Stocks are jittery about a Fed pullback. Traders know the free ride must come to an end sometime. The amount of money creation occurring can’t go on forever. Doing so risks a truly inflationary event, with the effervescing dollars threatening to spill over into the larger economy.

In economics the chicken must always come home to roost. Man can only live beyond his means for so long. Bernanke’s reputation hinges upon the market not tanking as his successors close up the spout of gushing currency. The endpoint is coming. When it happens, the house of cards will tumble down. And with it will come the livelihoods and hopes of many. With every boom there is a bust. It’s an immutable fact of government intervention into the economy.

As Bill Bonner writes, articles full of lavishing praise for Bernanke will begin appearing in coming weeks. Writing puff pieces on state bureaucrats is often a high-paying gig. But they all reveal a particular trend: celebrating the wise achievements of someone empowered to govern society. When businessmen are praised in print, their accomplishments are chalked up as minor victories reserved for the few. When the selfless man of charity is given his due, the praise is mild. When a lord of government sees the pages of a major periodical, it’s the kind of brown-nosing that would make a teacher’s pet uncomfortable.

For now, Bernanke will bask in exaltation. But his just deserts are coming. You can bet $4 trillion on it.

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Charles Nelson Reilly's picture

Oh darn, I thought this was another post about a banker offing himself.

National Blessing's picture

Bernanke rocks.  His man-tits and bald head shall be sorely missed.  Word. 

Sterling Rod's picture

Speaking of man tits, I just don't see how Yellin will instill any confidence in the markets when it's panic/crunch time.  Can't wait to find out.  Is Monday too soon?

Indian_Goldsmith's picture

"The Coming Crash" has to be the most hoped for , anticipated, most forecasted crash of all time... lol

philipat's picture

Binyamin Shalom (BS) Bernanke. One of the chosen people who all take care of each other on Wall Street and in the "Regulators".

eclectic syncretist's picture

According to my tally he accomplished running up bubbles in not only bonds but also equities, so he leaves with both bonds and equities overbid and being unusually risky investments.  He created a housing bubble that leaves millions of Americans more impoverished and disallusioned than ever.  He not only allowed banks that went broke due to unlawful mortgage lending practices to survive when they were bankrupt, he also actively supported their continuation as zombies through a ZIRP that had previously been shown to be worthless for stimulating economic activity in Japan,  I could go on but the thought of him makes me want to take a dump so I'll cut this short.  Asta la vista baybeeee!

SoberOne's picture

It's desserts. Unless they meant an arid wasteland...

GetZeeGold's picture



Alan Greenspan owes me some money.......Ben Shalom freakin did it!

philipat's picture

Greenshpan. Another chosen one. Same issue.

GetZeeGold's picture



The destruction of America will be blamed on the first black President and the first female Fed chairman.


The white guys get away with murder........again.

Zero Debt's picture

Things get easier when you are The Chosen.

DaveyJones's picture

With every boom there is a bust


with every goon there is disgust

KickIce's picture

I think they're setting her up to be the hero with a couple of down weeks.  Come Monday she'll get on the tube and anounce QE of 100 billion and it's off again to the races.

Greenskeeper_Carl's picture

Nah, too soon. Probably have a couple meetings where they stick to 65 a month for a little while.

Simplifiedfrisbee's picture

She is not waiting for crunch time sterling. She is going to hold 8 conference meetings a year to guide the herd of panicked investors.

P.S. It has been said before here on ZH- "All the smart people have left."

Mad Mohel's picture

One for old times sake, FUCK YOU BERNANK!

mvsjcl's picture

If some other-worldly alien stumbled on to this planet and read Zerohedge upon landing, it would be convinced that this Bernanke fellow's first name was "Fuck."

tom a taxpayer's picture

Ben's weekends: 2006-2013.

Bernanke: Was that good for you?

Wall Street dominatrix: [looks away, pouts]

Bernanke: Didn't you feel my Twist, honey? Didn't I stimulate you?

Wall Street dominatrix: [puts pillow over head]

Bernanke: How can I please you if you don't tell me what I'm doing wrong? Give me a clue.

Wall Street dominatrix: [rolls off bed onto floor]

Bernanke: Was it too little, too late? Did I let you down?

Wall Street dominatrix: [lights cigarette, inhales deeply]

Bernanke: Will you share a puff with me?

Wall Street dominatrix:[stands up, leans over Ben, blows smoke in his face, then pukes on him]

Bernanke: Thank you…now you are communicating…letting your feelings out. I promise to do better next time.

Wall Street dominatrix:[reaches for whip]


Yen Cross's picture


    I got nothing

Dingleberry's picture

Greenspan got knighted.

What will Ben get?

ILLILLILLI's picture

History will probably fist him...

HardlyZero's picture

Top-flight bug-out pad.

They will probably hire him to keep him around, so when the time comes to crank up the new laviathan for the next big fiat.  He probably wrote himself into the script.

rational's picture

Zero hedge Cassandra's are always careful to not put a timeframe on their predictions

Atomizer's picture

Yeah, we predicted this ages ago.

The Adventures of Photoguy - Episode 19


Cabreado's picture

"articles full of lavishing praise for Bernanke will begin appearing in coming weeks."

No, I don't think so.


"For now, Bernanke will bask in exaltation."

No, I don't think so.


I think the author is a few years late on those sentiments.

The authors and punditry need to stay in touch with what's going on.

sangell's picture

Where a medical doctor to engage in unproven and untested experimental treatments based on nothing but his desire to 'do something' and a couple of years later the patient was found to be suffering from severe side effects from the 'doctor's' experiments you can bet the doctor would find his license to practice and his personal financial situation in great peril. This same legal and professional danger should apply to Central Bankers on an even greater scale. The reckless practice of economics should carry a life without parole term in a Federal Supermax if it goes wrong.

disabledvet's picture

meh. "a lot of things should have gone wrong that didn't." the biggest thing that has gone wrong is pretty much zippo for a recovery.

has the dollar collapsed?
have treasury yields soared?
has equities tanked again?
have real estate prices collapsed only to stay down?
has inflation run wild?
has a massive deflation taken hold?
do we have trillion dollar deficits for as far as the eye can see?

Should we be doing better?
Is Lehman Brothers and Repo 109's Ben Bernanke's fault?

I can think of a lot of other things worth blaming here. "There never is just one crime being committed" as they say...nor just one criminal.
I agree "unless and until we get 8 percent economic growth with 2 percent unemployment and de minimus inflation we're just not gonna be happy here."

That's not Ben Bernanke's fault either.
Has Wal Mart said "we're gonna offer a job to everyone on foodstamps"?
Will they ever?
We can hope they do.
That certainly would improve their earnings outlook.
Same goes for every other retailer out there I might add.
Ben Bernanke doesn't set the minimum wage...or demand Banks start lending into the biggest energy boom in US history.

It wasn't the Fed that failed in 2008.
It wasn't Wall Street bailing out the Government.
I'm sure the guy grading his Phd only gave him an A-.

If you have a gold standard and all the gold is in the Bank then ultimately the Banker knows where the risk lies.
What does the Government care when it can just print another trillion??
There is nothing Ben Bernanke could have done to change that reality.
He knew his job.
He executed on it.
I do think he got really, really, really, really lucky.

Frank -THE COIN -'s picture be continued .

Has not happened, is the first Eye of the Eye Wall Landing.

Lets wait for the Other Side of The Eye Wall to Land. Lets Converse then.

I liked the Information and Logic you Provided.

GetZeeGold's picture



Yet is the key word here.......not YET.


It's bubbling a little bit but it hasn't exploded......yet.

North Sea Cowboy's picture

I was under the impression that inflation calculated the old way was 10% YoY, just because they change the way they calculate the important figures (lie) doesn't make it true. The Bernank has done a good job of bleeding the middle class and fattening the already super rich. And that WAS the Fed.

new game's picture

4 trillion spread around the globe is really not a problem.  when this 4 trillion starts to move to the same destinations, as seen this week in the fx markets, then we start to see misallocations and flights of insecure money in play. if it ends up back here, at its origin, then this mistro will have orchestrated wienar two...

Yes_Questions's picture
Good bye.  thanks for the memories. you shit fuck, you. you'll be spared the lamppost, but not the view.
bigrooster's picture

One final time...FUCK you BERNANKE!

Caviar Emptor's picture

Reagan proved that deficits don't matter
Obama proved that debt doesn't either
Bernank proved that currency matters less and less and less from printing more and more and more

Critical Path's picture

Financial War Criminal... people generations from now will judge him for that, and the population as submissive and ignorant for letting it happen.

QE49er's picture

Return the favor, Ctrl-P Bernankes pic, place on bottom of Bird Cage.

Yen Cross's picture

   I'm eternally grateful for the comments on this thread. Keep being honest!

TheCosmicTaco's picture

So whose dick are the banksters gonna suck now that Yellen is holding the fort? Or are they going to have to learn some new skills?

Yen Cross's picture

 Once upon a time I watched "tide charts". so that I could pass over an certain out-crop.

     You people are whimps/  Mountain People have zero concept of coastal living. bLASpHEMY DOES EXIST<

hungrydweller's picture

Olberman is a self-indulgent asshole.

prains's picture

Ben, meet 50' ditch, pull over, get out !! NOW

q99x2's picture

Fuck Bernanke, Fuck the Fed and Fuck you too Yellen.

I blame you all for FaceBook and Internet speed 1/45th that of Singapore's.

Yen Cross's picture


valkir's picture

I will miss FYB in ZH posts.Noone here try to fuck Yellen i guess...

Postkey's picture

Bernanke helped to avoid a 'Great Depression'?


In the USA, in the 'Great Depression' aggregate demand fell and, in the 1930's, GDP declined by 28%. 
In the USA, in the 'Great Recession', aggregate demand fell by a greater amount than it had in the 'Great Depression' but GDP declined by 'only' 5%.
Without governments increasing their expenditures and 'loose' monetary policy, then GDP could have fallen by an amount greater than 28%?