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Bernanke Speaks In Jackson Hole Redux: "Fed Has Range Of Tools For More Stimulus"

Tyler Durden's picture




 

The embargo has been lifted and here are the headlines, which are eeriely reminiscent of the Jackson Hole speech, courtesy of Bloomberg:

  • BERNANKE: POLICY MAKERS SHOULDN'T DISREGARD ECONOMY'S FRAGILITY
  • BERNANKE SAYS FED HAS `A RANGE OF TOOLS' FOR MORE STIMULUS
  • BERNANKE SAYS SUBSTANTIAL FISCAL TIGHTENING COULD HURT RECOVERY
  • BERNANKE SAYS FED PREPARED TO USE TOOLS `AS APPROPRIATE'
  • BERNANKE SAYS INFLATION `EXPECTED TO MODERATE' IN COMING Q'S
  • BERNANKE SAYS FED SEES `GREATER DOWNSIDE RISKS' TO OUTLOOK
  • BERNANKE: POLICY MAKERS SHOULDN'T DISREGARD ECONOMY'S FRAGILITY
  • BERNANKE: U.S. FINANCES COULD `SPIRAL OUT OF CONTROL'

Full speech:

The following is a text of Federal Reserve Chairman Ben S. Bernanke’s remarks to the Economic Club of Minnesota in Minneapolis:

Good afternoon. I am delighted to be in the Twin Cities and would like to thank the Economic Club of Minnesota for inviting me to kick off its 2011-2012 speaker series. Today I will provide a brief overview of the U.S. economic outlook and conclude with a few thoughts on monetary policy and on the longer-term prospects for our economy.

The Outlook for U.S. Economic Growth
In discussing the prospects for the economy and for policy in the near term, it bears recalling briefly how we got here. The financial crisis that gripped global markets in 2008 and 2009 was more severe than any since the Great Depression. Economic policymakers around the world saw the mounting risks of a global financial meltdown in the fall of 2008 and understood the extraordinarily dire economic consequences that such an event could have. Governments and central banks consequently worked forcefully and in close coordination to avert the looming collapse. The actions to stabilize the financial system were accompanied, both in the United States and abroad, by substantial monetary and fiscal stimulus. Despite these strong and concerted efforts, severe damage to the global economy could not be avoided. The freezing of credit, the sharp drops in asset prices, dysfunction in financial markets, and the resulting blows to confidence sent global production and trade into free fall in late 2008 and early 2009.

It has been almost exactly three years since the beginning of the most intense phase of the financial crisis, in the late summer and fall of 2008, and a bit more than two years since the official beginning of the economic recovery, in June 2009, as determined by the National Bureau of Economic Research's Business Cycle Dating Committee. Where do we stand? There have been some positive developments over the past few years. In the financial sphere, our banking system and financial markets are significantly stronger and more stable. Credit availability has improved for many borrowers, though it remains tight in categories--such as small business lending--in which the balance sheets and income prospects of potential borrowers remain impaired. Importantly, given the sources of the crisis, structural reform is moving forward in the financial sector, with ambitious domestic and international efforts under way to enhance financial regulation and supervision, especially for the largest and systemically most important financial institutions.

Nevertheless, it is clear that the recovery from the crisis has been much less robust than we had hoped. From recent comprehensive revisions of government economic data, we have learned that the recession was even deeper and the recovery weaker than we had previously thought; indeed, aggregate output in the United States still has not returned to the level that it had attained before the crisis. Importantly, economic growth over the past two years has, for the most part, been at rates insufficient to achieve sustained reductions in the unemployment rate, which has recently been fluctuating a bit above 9 percent.

The pattern of sluggish economic growth was particularly evident in the first half of this year, with real gross domestic product (GDP) estimated to have increased at an annual rate of less than 1 percent, on average, in the first and second quarters. Some of this weakness can be attributed to temporary factors, including the strains put on consumer and business budgets by the run-ups earlier this year in the prices of oil and other commodities and the effects of the disaster in Japan on global supply chains and production. Accordingly, with commodity prices coming off their highs and manufacturers' problems with supply chains well along toward resolution, growth in the second half looks likely to pick up. However, the incoming data suggest that other, more persistent factors also have been holding back the recovery. Consequently, as noted in its statement following the August meeting, the Federal Open Market Committee (FOMC) now expects a somewhat slower pace of recovery over coming quarters than it did at the time of the June meeting, with greater downside risks to the economic outlook.

One striking aspect of the recovery is the unusual weakness in household spending. After contracting very sharply during the recession, consumer spending expanded moderately through 2010, only to decelerate in the first half of 2011. The temporary factors I mentioned earlier--the rise in commodity prices, which has hurt households' purchasing power, and the disruption in manufacturing following the Japanese disaster, which reduced auto availability and hence sales--are partial explanations for this deceleration. But households are struggling with other important headwinds as well, including the persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high for many, notwithstanding that households, in the aggregate, have been saving more and borrowing less. Even taking into account the many financial pressures they face, households seem exceptionally cautious. Indeed, readings on consumer confidence have fallen substantially in recent months as people have become more pessimistic about both economic conditions and their own financial prospects.

Compared with the household sector, the business sector generally presents a more upbeat picture. Manufacturing production has risen nearly 15 percent since its trough, driven importantly by growth in exports. Indeed, the U.S. trade deficit has narrowed substantially relative to where it was before the crisis, reflecting in part the improved competitiveness of U.S. goods and services. Business investment in equipment and software has also continued to expand. Corporate balance sheets are healthy, and although corporate bond markets have tightened somewhat of late, companies with access to the bond markets have generally had little difficulty obtaining credit on favorable terms. But problems are evident in the business sector as well: Business investment in nonresidential structures, such as office buildings, factories, and shopping malls, has remained at a low level, held back by elevated vacancy rates at existing properties and difficulties, in some cases, in obtaining construction loans. Also, some business surveys, including those conducted by the Federal Reserve System, point to weaker conditions recently, with businesses reporting slower growth in production, new orders, and employment.

Why has this recovery been so slow and erratic? Historically, recessions have tended to sow the seeds of their own recoveries as reduced spending on investment, housing, and consumer durables generates pent-up demand. As the business cycle bottoms out and confidence returns, this pent-up demand, often augmented by the effects of stimulative monetary and fiscal policies, is met through increased production and hiring. Increased production in turn boosts business revenues and increased hiring raises household incomes--providing further impetus to business and household spending. Improving income prospects and balance sheets also make households and businesses more creditworthy, and financial institutions become more willing to lend. Normally, these developments create a virtuous circle of rising incomes and profits, more-supportive financial and credit conditions, and lower uncertainty, allowing the process of recovery to develop momentum.

These restorative forces are at work today, and they will continue to promote recovery over time. Unfortunately, the recession, besides being extraordinarily severe as well as global in scope, was also unusual in being associated with both a very deep slump in the housing market and a historic financial crisis. These two features of the downturn, individually and in combination, have acted to slow the natural recovery process.

Notably, the housing sector has been a significant driver of recovery from most recessions in the United States since World War II, but this time--with an overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and ongoing concerns by both potential borrowers and lenders about continued house price declines--the rate of new home construction has remained at less than one-third of its pre-crisis peak. Depressed construction also has hurt providers of a wide range of goods and services related to housing and homebuilding, such as the household appliance and home furnishing industries. Moreover, even as tight credit for builders and potential homebuyers has been one of the factors restraining the housing recovery, the weak housing market has in turn adversely affected financial markets and the flow of credit. For example, the sharp declines in house prices in some areas have left many homeowners "underwater" on their mortgages, creating financial hardship for households and, through their effects on rates of mortgage delinquency and default, stress for financial institutions as well.

As I noted, the financial crisis of 2008 and 2009 played a central role in sparking the global recession. A great deal has been and continues to be done to address the causes and effects of the crisis, including extensive financial reforms. However, although banking and financial conditions in the United States have improved significantly since the depths of the crisis, financial stress continues to be a significant drag on the recovery, both here and abroad. This drag has become particularly evident in recent months, as bouts of sharp volatility and risk aversion in markets have reemerged in reaction to concerns about European sovereign debts and related strains as well as developments associated with the U.S. fiscal situation, including last month's downgrade of the U.S. long-term credit rating by one of the major ratings agencies and the recent controversy surrounding the raising of the U.S. federal debt ceiling. It is difficult to judge how much these events and the associated financial volatility have affected economic activity thus far, but there seems little doubt that they have hurt household and business confidence, and that they pose ongoing risks to growth.

While the weakness of the housing sector and continued financial volatility are two key reasons for the frustratingly slow pace of the recovery, other factors also may restrain growth in coming quarters. For example, state and local governments continue to tighten their belts by cutting spending and reducing payrolls in the face of ongoing budgetary pressures, and federal fiscal stimulus is being withdrawn. There is ample room for debate about the appropriate size and role for the government in the longer term, but--in the absence of adequate demand from the private sector--a substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring.

The prospect of an increasing fiscal drag on the economy in the face of an already sluggish recovery highlights one of the many difficult tradeoffs currently faced by fiscal policymakers. As I have emphasized on previous occasions, without significant policy changes to address the increasing fiscal burdens that will be associated with the aging of the population and the ongoing rise in health-care costs, the finances of the federal government will spiral out of control in coming decades, risking severe economic and financial damage. But, while prompt and decisive action to put the federal government's finances on a sustainable trajectory is urgently needed, fiscal policymakers should not, as a consequence, disregard the fragility of the economic recovery. Fortunately, the two goals--achieving fiscal sustainability, which is the result of responsible policies set in place for the longer term, and avoiding creation of fiscal headwinds for the recovery--are not incompatible. Acting now to put in place a credible plan for reducing future deficits over the long term, while being attentive to the implications of fiscal choices for the recovery in the near term, can help serve both objectives.

The Outlook for Inflation
Let me turn now from the outlook for growth to the outlook for inflation. Prices of many commodities, notably oil, increased sharply earlier this year. Higher gasoline and food prices translated directly into increased inflation for consumers, and in some cases producers of other goods and services were able to pass through their higher costs to their customers as well. In addition, the global supply disruptions associated with the disaster in Japan put upward pressure on motor vehicle prices. As a result of these influences, inflation picked up significantly; over the first half of this year, the price index for personal consumption expenditures rose at an annual rate of about 3-1/2 percent, compared with an average of less than 1-1/2 percent over the preceding two years.

However, inflation is expected to moderate in the coming quarters as these transitory influences wane. In particular, the prices of oil and many other commodities have either leveled off or have come down from their highs. Meanwhile, the step-up in automobile production should reduce pressure on car prices. Importantly, we see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy. Longer-term inflation expectations have remained stable according to the indicators we monitor, such as the measure of households' longer-term expectations from the Thompson Reuters/University of Michigan survey, the 10-year inflation projections of professional forecasters, and the five-year-forward measure of inflation compensation derived from yields of inflation-protected Treasury securities. In addition to the stability of longer-term inflation expectations, the substantial amount of resource slack that exists in U.S. labor and product markets should continue to have a moderating influence on inflationary pressures. Notably, because of ongoing weakness in labor demand over the course of the recovery, nominal wage increases have been roughly offset by productivity gains, leaving the level of unit labor costs close to where it had stood at the onset of the recession. Given the large share of labor costs in the production costs of most firms, subdued unit labor costs should be an important restraining influence on inflation.

Monetary Policy
Although the FOMC expects a moderate recovery to continue and indeed to strengthen over time, the Committee has responded to recent developments--as I have already noted--by marking down its outlook for economic growth over coming quarters. The Committee also continues to anticipate that inflation will moderate over time, to a rate at or below the 2 percent or a bit less that most FOMC participants consider to be consistent with the Committee's dual mandate to promote maximum employment and price stability.

Given this outlook, the Committee decided at its August meeting to provide more specific forward guidance about its expectations for the future path of the federal funds rate. In particular, the statement following the meeting indicated that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013. That is, in what the Committee judges to be the most likely scenarios for resource utilization and inflation in the medium term, the target for the federal funds rate would be held at its current low level for at least two more years.

In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. My FOMC colleagues and I will continue to consider those and other pertinent issues, including, of course, economic and financial developments, at our meeting in September and are prepared to employ these tools as appropriate to promote a stronger economic recovery in a context of price stability.

Conclusion
Let me conclude with just a few words on the longer-term prospects for our economy. As monetary and fiscal policymakers consider the appropriate policies to address the economy's current weaknesses, it is important to acknowledge its enduring strengths. Notwithstanding the trauma of the crisis and the recession, the U.S. economy remains the largest in the world, with a highly diverse mix of industries and a degree of international competitiveness that, if anything, has improved in recent years. Our economy retains its traditional advantages of a strong market orientation, a robust entrepreneurial culture, and flexible capital and labor markets. And our country remains a technological leader, with many of the world's leading research universities and the highest spending on research and development of any nation. Thus I do not expect the long-run growth potential of the U.S. economy to be materially affected by the financial crisis and the recession if--and I stress if--our country takes the necessary steps to secure that outcome. Economic policymakers face a range of difficult decisions, and every household and business must cope with the stresses and uncertainties that our current situation presents. These are not easy tasks. I have no doubt, however, that those challenges can be met, and that the fundamental strengths of our economy will ultimately reassert themselves. The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability

 

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Thu, 09/08/2011 - 13:38 | 1646845 Nothing To See Here
Nothing To See Here's picture

What? Bernanke says that the Fed is 'a bunch of tools'? Can't agree more with helicopter Ben this time!

Thu, 09/08/2011 - 13:44 | 1646875 B9K9
B9K9's picture

ARTHUR:
     You fight with the strength of many men, Sir Knight.
     [pause]
     I am Arthur, King of the Britons.
     [pause]
     I seek the finest and the bravest knights in the land to join me in my court at Camelot.
     [pause]

     You have proved yourself worthy. Will you join me?
     [pause]
     You make me sad. So be it. Come, Patsy.
BLACK KNIGHT:
     None shall pass.
ARTHUR:
     What?
BLACK KNIGHT:
     None shall pass.
ARTHUR:
     I have no quarrel with you, good Sir Knight, but I must cross this bridge.
BLACK KNIGHT:
     Then you shall die.
ARTHUR:
     I command you, as King of the Britons, to stand aside!
BLACK KNIGHT:
     I move for no man.
ARTHUR:
     So be it!
ARTHUR and BLACK KNIGHT:
     Aaah!, hiyaah!, etc.
     [ARTHUR chops the BLACK KNIGHT's left arm off]

ARTHUR:
     Now stand aside, worthy adversary.
BLACK KNIGHT:
     'Tis but a scratch.
ARTHUR:
     A scratch? Your arm's off!
BLACK KNIGHT:
     No, it isn't.
ARTHUR:
     Well, what's that, then?
BLACK KNIGHT:
     I've had worse.
ARTHUR:
     You liar!
BLACK KNIGHT:
     Come on, you pansy!
     [clang]
     Huyah!
     [clang]
     Hiyaah!
     [clang]
     Aaaaaaaah!
     [ARTHUR chops the BLACK KNIGHT's right arm off]

ARTHUR:
     Victory is mine!
     [kneeling]
     We thank Thee Lord, that in Thy mer--
BLACK KNIGHT:
     Hah!
     [kick]
     Come on, then.
ARTHUR:
     What?
BLACK KNIGHT:
     Have at you!
     [kick]
ARTHUR:
     Eh. You are indeed brave, Sir Knight, but the fight is mine.
BLACK KNIGHT:
     Oh, had enough, eh?
ARTHUR:
     Look, you stupid bastard. You've got no arms left.
BLACK KNIGHT:
     Yes, I have.
ARTHUR:
     Look!
BLACK KNIGHT:
     Just a flesh wound.
     [kick]
ARTHUR:
     Look, stop that.
BLACK KNIGHT:
     Chicken!
     [kick]
     Chickennn!
ARTHUR:
     Look, I'll have your leg.
     [kick]
     Right!
     [whop]
     [ARTHUR chops the BLACK KNIGHT's right leg off]

BLACK KNIGHT:
     Right. I'll do you for that!
ARTHUR:
     You'll what?
BLACK KNIGHT:
     Come here!
ARTHUR:
     What are you going to do, bleed on me?
BLACK KNIGHT:
     I'm invincible!
ARTHUR:
     You're a looney.
BLACK KNIGHT:
     The Black Knight always triumphs! Have at you! Come on, then.
     [whop]
     [ARTHUR chops the BLACK KNIGHT's last leg off]

BLACK KNIGHT:
     Oh? All right, we'll call it a draw.
ARTHUR:
     Come, Patsy.
BLACK KNIGHT:
     Oh. Oh, I see. Running away, eh? You yellow bastards! Come back here and take what's coming to you. I'll bite your legs off!

Thu, 09/08/2011 - 13:46 | 1646889 MillionDollarBonus_
MillionDollarBonus_'s picture

Professor Bernanke is my hero! I will never forget this!

Thu, 09/08/2011 - 13:38 | 1646846 TradingJoe
TradingJoe's picture

More Carrot, No Money, was right to go all in Long Carrot Futures :)))

Thu, 09/08/2011 - 13:38 | 1646847 Racer
Racer's picture

The ChairSatan is a tool

Thu, 09/08/2011 - 14:27 | 1647085 HardwoodAg
HardwoodAg's picture

The chairsatan is a stool

Thu, 09/08/2011 - 16:06 | 1647553 Poetic injustice
Poetic injustice's picture

The chairsatan is ghoul.

Thu, 09/08/2011 - 13:39 | 1646848 zerohandle
zerohandle's picture

EURO getting beat up, how is the compression trade looking?

Thu, 09/08/2011 - 13:39 | 1646849 digitlman
digitlman's picture

Bernanle can go fuck himself.

Thu, 09/08/2011 - 14:22 | 1647055 whstlblwr
whstlblwr's picture

Can't he be stopped? Class action lawsuit. He just lying on question answer about dollar value. We need to sue fucker.

Thu, 09/08/2011 - 13:40 | 1646851 alien-IQ
alien-IQ's picture

I think Bernanke should take Simon Black's advice and seek employment in the middle east.

Thu, 09/08/2011 - 14:01 | 1646972 rosiescenario
rosiescenario's picture

.....you mean he isn't already so employed by a certain country there? I thought he was aiding and abetting the doing of "God's work"....

Thu, 09/08/2011 - 13:41 | 1646852 RobotTrader
RobotTrader's picture

 

 

 

The mighty, mighty U.S. Dollar is soaring on this news.

Wow, perhaps Bernanke needs to start printing in overdrive, that will surely send the dollar to heights now reached by the Yen.

Man, with the 10-yr. tanked to 2% and the dollar surging, the green light is now burning brighter than ever for him to outright monetize and take over the entire U.S. mortgage indusrty.

Thu, 09/08/2011 - 13:43 | 1646869 SheepDog-One
SheepDog-One's picture

What 'news making the dollar soar', you moron? You mean the Euro collapse? 

Thu, 09/08/2011 - 14:25 | 1647079 I Told YOU So
I Told YOU So's picture

keep posting robo, they just dont get your brilliance here.

Thu, 09/08/2011 - 14:46 | 1647154 ElvisDog
ElvisDog's picture

It makes sense for the dollar to soar. Duplicating his previous Jackson Hole speech means no new goodies coming from the Fed in the near-term anyway. Part of the dollar's decline was the expectation of continued and expanding Fed intervention.

Thu, 09/08/2011 - 13:41 | 1646853 Cone of Uncertainty
Cone of Uncertainty's picture

Bernanke, go eat a dick bitch.

Thu, 09/08/2011 - 13:41 | 1646855 SheepDog-One
SheepDog-One's picture

Bernanke has ONE tool box, crammed full of hammers.

There will be no further stimulus, it is polled as the most unpopular thing among the public today with 80% saying it is 'bailouts for the rich' and theyre right.

FED painted into a corner here big time. There will be no QE3 trillions which accounts for the DOW 9,800-12,700 move already priced into the markets.

Firearms bullets coins and beans.

Thu, 09/08/2011 - 18:03 | 1647993 Helix6
Helix6's picture

Re: "[further stimulus]... is polled as the most unpopular thing among the public today with 80% saying it is 'bailouts for the rich'"

So?

Thu, 09/08/2011 - 13:44 | 1646858 TruthInSunshine
TruthInSunshine's picture

Ben S. Bernanke, King of the Ph.D shit theory mouthbreathers. Anyone listening to Bernanke speak should wear a full Hazmat suit, because they're nearly guaranteed to be exposed to toxic effluent, the likes of which few men in history have spewed forward from every hole, orifice and pore in their body.

You're doing a heckuva job, Bernank. Why don't you go and print some more FRNs, since Mark Faber is correct inasmuch as that's the only thing that your reptilian brain knows how to do. You managed to break all markets, you Harvard/MIT genius.

Thu, 09/08/2011 - 13:47 | 1646896 SheepDog-One
SheepDog-One's picture

He's carrot and sticking this shit with a song and dance routine Ginger and Fred couldnt top.

Thu, 09/08/2011 - 14:05 | 1646988 BurningFuld
BurningFuld's picture

Never attribute to malice what can be explained by stupidity.

Thu, 09/08/2011 - 16:08 | 1647563 Poetic injustice
Poetic injustice's picture

It's not malice or stupidity, just deliberate actions as per script.

Thu, 09/08/2011 - 13:42 | 1646860 Cdad
Cdad's picture

T plus 9 cents on the Dixie to the macro sell signal...when the studman USD breaks through the door in Lloyd Blankfein's office with his lube in hand, Bidless following with a hand held digital camera, ready to make niche adult films to be released later today on the Internet.

 

Thu, 09/08/2011 - 13:44 | 1646863 Rinpocheinp
Rinpocheinp's picture

Reads fine in translation:

Money is the IOU. Whether it is gold and silver, or bill, or electronic money, in essence, are the IOUs.

Assuming the world, only two people, the old couple and the old Chinese couple United States, began their two all of the dry, self-sufficiency. One day, Americans caught four fish, the old Chinese arrest of eight birds, birds taste Americans want to try the old Chinese seafood products like products, they exchanged the old United States with 2 fish for the old China of 4 birds. After that they often exchanged.

One day, Americans lazy, not to catch fish, at home Shuiliaoyitian. Night, the old China catch a bird home, Americans do not eat, they find the old China by birds. Americans looking for a bark, and to write on: 2 fish. To the old Chinese home, the old Chinese saying: "I exchange for you 4 birds, but today I was sick and did not go to catch fish, I give you 2 fish of IOUs." The old Chinese saying: "This to say. "accept the IOUs, the 4 birds to the Americans. Americans go back to eating flattered.

Americans have tasted the sweetness of sleep at home the next day day, night and took 2 fish of IOUs to exchange for 4 birds. Exchange is completed, the Americans were the old Chinese saying: "After the IOUs do not write on the 2 fish, and this is my IOU to fight Americans, and later wrote two dollars on it." The old Chinese readily agreed. After the IOUs to use dollars that so day after day.

Is in accordance with the principle of commodity exchange, commodity exchange is barter, goods for goods, rather than money and material exchange. Americans to spend money for the old Chinese bird, the old China to get the money, this is not the whole process of exchange of commodities, only half the process. Old China hands of Americans' money, it shows that Americans still owe the old Chinese fish. So, money is the essence of IOUs. The old Chinese Americans get money to buy the fish, the whole process of commodity exchange until the end. This process is for Americans to use the old Chinese fish, birds. If China still does not spend money older Americans enchant the bird, then Americans accounted for a great deal, and freeload old Hua. But here, Americans will try to always keep the old Chinese money to redeem him in kind.

Day long, the old China hands have accumulated a lot of money. Americans fear that the old China to exchange in kind, on the old Chinese saying: "Now we are transactions between you is a surplus, the surplus is very beneficial for you, you have to be maintained." The old China was very pleased, could not bear kind of exchange. Thought up on the old Chinese ask: "You are deficit, since the deficit negative, why do you always keep the deficit it?"

After another day, not enough Americans feel that 4 birds to eat, write three dollars, to the old Chinese family bought six birds. Americans eat the day with six birds, the old China but only 2 birds to eat, hungry hungry. But the thought of the hands of so much money to house Americans can buy many, many things, enough for their retirement, and will feel worth it.

Previously, the state of Qin to use its authority, often to countries to develop a traitor. Foreign nobility to the state of Qin to the Qin to educate them: "In the future your country as long as the Qin and fight, you will cede territory, which your country is most favorable." The nobility, after returning to their country because it is the students back from the state of Qin, learning and ability, are appointed positions. Later, Qin's soldiers as long as a pressure or a crusade against the letter arrived, these countries will immediately cede territory.

Today, the United States, this "surplus advantage" theory to be international students to the world, have become a mainstream economic theory, countries in the United States by printing money to buy things, like all countries, like guarding the dollars keep the baby, bear flowers, the United States secretly proud dead.

Then, after a long period ofTime, The old China the United States to find the old moth-eaten some of his money, and think of Americans at home these IOUs redeemed in kind. Americans said to him: "The money is wealth, how you can easily spend it? You are asking too much and you do not worry I can not afford to redeem you, I am rich, you see I eat and drink, Which will lead to better than Hello? "said as he pointed to the house of a pocket a pocket bird meat, said:" You see I have so much wealth, you worry about? I am fully able to afford to redeem you, do not you worry, I Take my personality swear, I do not breach of contract. but what do you, you are a pauper, every day, hungry to play straight Akira, I looked at all the poor. As the saying goes, the poorer the more depends, I'd worry about your reputation then. "Americans finished, I suddenly felt not good, but immediately corrected himself and said:"

Of course, you are just on the surface was poor, in fact you are very wealthy, you have so many foreign exchange reserves. You see what I have, due to a ass debt. I feel you on my backWorldThe first serious threat to the status of the rich do. "Old China was what he said, as a drink twenty-two Laobaigan, suddenly feel Yunyunhuhu of the old United States has said:" This shows you which road to take. In the future you have to continue along this road, trade between us is mutually beneficial. We want to shared prosperity. "Old China grateful, Mangxiang old U.S. position:"

Rest assured, I am a responsible person, definitely not promises! "Old China hands of the United States pointed to the old money, said:" Since the money was moth-eaten, and I will give you re-write a bond it. I suppose I borrow your debt, pay you generous interest, pay back the money after one year. "Old Chinese one, the cost-effective, the change of a bond back, and their trading and normal to continue.

Finally one day, a little wake up the old China. He thought: "What Americans live every day, this guy not do, eat and drink, all me, still moist than I can live, I get nothing more than bark, while he was always by all means to compile the various theories will not let me redeem in kind, if not converted, it can only fire when the wood. Well, not later, and he traded. "

Night, the Americans and took three dollars to buy a bird. Old China not to him. Americans say: "If you do not sell to me, I would have starved to death, then your hand dollars and bonds on all scrap it. You know, save me now is to save yourself." Listening to the old China, last resort, and he had to deal.

What Americans have to continue trading and not trading? China Chousi old, but had to pretend in front of his wife, a very wise way.

Blink of an eye a year later, the wife pulls out the old Chinese Americans goes bonds, urging China to the old debts. China is also a great hold upon their old dollars, so the way to his home Americans buy more stuff. Reduce the fear of old China's foreign exchange reserves, do not want to buy something, the couple began to argue for that matter. Old Chinese wife shouted: "do not buy things, leaving what Piyong these dollars? The future you are not allowed then to his dollars, but also allowed you to be his bond again!"

Sound spread next door, Americans scared to death. His wife said: "I would not afraid of them to collect debts, paying the money he wants to make me, how many how many. To be honest, I do not need to borrow them, no matter what to buy, I pay for directly making money on the line. In fact, whether I go to the bond issue, or dollars, in essence, are the bonds, are the kind that I owe people, while the reason I want them to borrow more money, is acting, let them know that I am very careful of making money, not easily making money, I do not buy things made in order to maintain the trust of their dollars, I suspect that I fear most is that they create chaos money, make money to buy something, do not trust dollars, do not accept dollars. the next thing I fear is that they take dollars in exchange for real so we should not hollowed out, we can not account for their cheap white and we have to find a way so that they continue to believe and accept dollars, does not compel them to redeem in kind. "

So the couple whispered for a while, and then loud noise from the frame to. Americans wife loudly scolded the Americans: "You do-nothing, you know eat and drink, I will let you save money you do not save, all debts owed, which is also what means, my good God, this day I have, however, and I was hanging to go! "Americans are loudly scolded his wife:" You Saozhou Xing, blame me know, you whitewash every day, wearing a red green, I will let you save money you listened to? Do you know me every day to borrow, on which I borrow? Man you old Chinese family, it will be called housekeeper, people and more affluent, more money was moldy. stalls you this woman, I count down the mold of eight life and I not live, I have to go hang! "

Old Chinese couple next door could hear clearly, wants to: "You must not die, you die, we ask who to go to debt! If you had money to spend on the hurry to take it, by how much there is absolutely no restrictions, to save you is to save ourselves. "finish like the old China, it said to his wife:" They are too poor, can not let them down so they embarrassed to borrow, we take the initiative to send go. there is a home birds, but also give them it. "nodded the old Chinese wife.
So the couple picked up a big hold dollars and a bird remaining at home, go home to Americans, said to them: "You should give it emergency." Then the couple turned away.

The old couple behind the United States, looking at their backs, turned the music days. Americans, said: "This life and death of the poor fool!

http://www.szhgh.com/?action-viewnews-itemid-5074

Thu, 09/08/2011 - 13:46 | 1646883 caerus
caerus's picture

you type fast

Thu, 09/08/2011 - 13:43 | 1646864 docj
docj's picture

All I can see is "blah blah blah"

Thu, 09/08/2011 - 13:43 | 1646866 RobotTrader
RobotTrader's picture

 

 

Bernanke says there is no inflation worries.

I agree.

Thu, 09/08/2011 - 13:44 | 1646876 SheepDog-One
SheepDog-One's picture

Thats because youre a moron.

Thu, 09/08/2011 - 16:48 | 1647728 James
James's picture

RoboTrader says -

Bernanke says there is no inflation worries.

I agree.

SheepDog-One says -

Thats because youre a moron.

I agree

Thu, 09/08/2011 - 13:54 | 1646912 tickhound
tickhound's picture

 

 

ie: "These are not the droids you're looking for..."

"These are not the droids we're looking for..."

"Move along"

"Ok, move along"

FEDi mind tricks don't work on me

Thu, 09/08/2011 - 14:04 | 1646981 alien-IQ
alien-IQ's picture

of course you agree...you're a clueless dickhead.

Thu, 09/08/2011 - 14:28 | 1647088 english serf
english serf's picture

its coming. Here inthe uk they claim its 4.5%, when its really 6-10%

Thu, 09/08/2011 - 14:49 | 1647164 YesWeKahn
YesWeKahn's picture

you can suck his brown ass, i agree.

Thu, 09/08/2011 - 13:43 | 1646870 warchopper
warchopper's picture

Bravo! His policies have been working sooooo well. Let's continue them!

Thu, 09/08/2011 - 13:44 | 1646871 Dick Darlington
Dick Darlington's picture

BERNANKE: U.S. FINANCES COULD `SPIRAL OUT OF CONTROL'

 

Ahahahaa, oh boy, the man with the beard is too funny.

 

Thu, 09/08/2011 - 13:44 | 1646877 caerus
caerus's picture

stocks just got the "bernank spank"

Thu, 09/08/2011 - 13:45 | 1646879 Comay Mierda
Comay Mierda's picture

there wont be (B) more easing until (A) another major american bank (C) fails...

Thu, 09/08/2011 - 14:04 | 1646986 jdelano
jdelano's picture

EUR almOst on Point thEre

Thu, 09/08/2011 - 13:45 | 1646880 baby_BLYTHE
baby_BLYTHE's picture

No mention of the "tail risk" gold is clearly signaling. Perhaps the Chaircreature has a bit more to be worried about than his "transitory" inflation.

Thu, 09/08/2011 - 13:47 | 1646891 Dick Darlington
Dick Darlington's picture

The man with the beard doesn't understand gold. Tradition, remember? ;-)

Thu, 09/08/2011 - 14:38 | 1647121 IAmNotMark
IAmNotMark's picture

Dr. Paul :  "Is gold money?"

Dr. Ben : "No.  Gold is not money."

Either he's lying through his teeth or he really does have no clue.

Thu, 09/08/2011 - 13:46 | 1646881 raki_d
raki_d's picture

TD... THIS IS IMPORTANT !!
ZH has to correct this post:
http://www.zerohedge.com/news/rick-santelli-tells-arch-globalization-advocate-friedman-he-idiot

To inaccurately say Rick said Friedman was idiotic, instead of what he really said ('your answer is idiotic', in response to Friedman's "Your question is idiotic"), makes Rick look like a rude guy (which he isn't).
So there is a difference, it's more than semantics.  
And when you put up a transcript, it should be accurate(it was in every other instance), so I doubt this is a case of sloppy editing).
It's misquoted in both the title of this post and the transcript, it clearly was intentional (probably to be more provocative).  
For a blog that prides itself on truth telling, that's a double standard, and unsettling.

Thu, 09/08/2011 - 13:53 | 1646937 Robslob
Robslob's picture

Raki_d you will make a fine politician...?

There are more spelling errors on ZH posts than gold ounces in the West Point vault....wait, maybe that isn't a good comparison...

Thu, 09/08/2011 - 13:59 | 1646961 raki_d
raki_d's picture

It may not be gold if its not a spelling error... How about this comparison ?

Thu, 09/08/2011 - 13:54 | 1646938 WSP
WSP's picture

Civility is overrated and that is our problem---being nice to these criminals.  I think saying the guy was an "idiot" (even if he did not say that) is playing it quite conservative.  Friedman is a treasonous, lying, criminal kleptocrat.  How about that?

Thu, 09/08/2011 - 13:45 | 1646882 Belarus
Belarus's picture

"Range of tools," you mean like the "other" column on the Fed's balance sheet where no good American can know the details of? Or plain vanilla duraation extension? Or sending overnight funding down to .oo? Or waving an empty gun? 

You decide.

Thu, 09/08/2011 - 13:48 | 1646895 TruthInSunshine
TruthInSunshine's picture

Belarus

"Range of tools,"...

 

It should be Reign of Tools, with The Bernank as Chief Tool.

Thu, 09/08/2011 - 13:49 | 1646906 Belarus
Belarus's picture

+1

Thu, 09/08/2011 - 13:46 | 1646885 King_of_simpletons
King_of_simpletons's picture

Ah good to know that things are bad and that the tools (the fed) has tools.

Thu, 09/08/2011 - 13:46 | 1646886 urbanelf
urbanelf's picture

Less robust, bitchez!

Thu, 09/08/2011 - 13:46 | 1646887 SheepDog-One
SheepDog-One's picture

Carrot and stick desperation at this point for the Bernank and Obama and everyone else who knows further monetization is suicide both for their phony jobs and for the death spiral it would induce over the next 12 months till election time.

QE3 is not going to happen, just more jawboning till the chickens come home to roost, very soon.

Thu, 09/08/2011 - 13:56 | 1646951 Belarus
Belarus's picture

@SheepDog,

 

I agree QE3 would be suicide. On the other hand, where will the money come from to the fund the deficits? A stock market crash? Europe? Japan? Russia (lol)? Without most Eurpeans going into the USD (they won't--they'll choose gold), with Japan broke, with other countries getting away from USD's, it really only leaves one option:

The stock market needs to crash to fund our deficts sands QE3. Puts Bernake is a pickly little pearch don't it?

Thu, 09/08/2011 - 14:04 | 1646984 SheepDog-One
SheepDog-One's picture

Yep sure does!

Thu, 09/08/2011 - 14:55 | 1647202 ElvisDog
ElvisDog's picture

Well, the collapse of the Euro, which is seemingly ahead of the collapse of the U.S. schedule, would scare more than ample money into U.S. treasuries.

Thu, 09/08/2011 - 13:46 | 1646888 Money_for_Nothing
Money_for_Nothing's picture

Inflation is no problem when the only buying is paper assets. If Walmart goes bankrupt he may embarrass himself by telling people to eat their portfolio.

Thu, 09/08/2011 - 13:47 | 1646890 Kurpak
Kurpak's picture

BERNANKE SAYS INFLATION `EXPECTED TO MODERATE' IN COMING Q'S

of course excluding luxury discretionary items like food, gas, water, phone, electricity, cable internet, taxes, vehicle tabs, insurance, medical bills, and air.

ASSHAT


Thu, 09/08/2011 - 13:49 | 1646903 Racer
Racer's picture

Exactly... my insurance bill has gone up 30% in one year and I was lucky... other people's went up 50%

and cheese has gone up 25% in the last few weeks ...and any other food you care to look at has soared too

Thu, 09/08/2011 - 14:56 | 1647214 ElvisDog
ElvisDog's picture

Tri-tip steaks - was $8.99/lb now $11.99/lb

Thu, 09/08/2011 - 14:51 | 1647182 YesWeKahn
YesWeKahn's picture

The magician is predicating the future.

 

He saw no housing bubble,

He saw no recession.

Now, he see no inflation.

 

To the Bernankee_turd, we trust.

Thu, 09/08/2011 - 13:47 | 1646892 Racer
Racer's picture

The economy is fragile because of your stupid meddling you fool

Thu, 09/08/2011 - 13:49 | 1646905 WSP
WSP's picture

Hmmmm, I wouldn't use the word "meddling"----too weak.  How about "control".   The economy and markets are doing exactly what they want them to, you can be sure of that!

Thu, 09/08/2011 - 13:48 | 1646893 DefiantSurf
DefiantSurf's picture

I'm going to spend the rest of the afternoon fondling my gold whilst I surf for midget porn as both will be more enlightening

Thu, 09/08/2011 - 13:48 | 1646898 WSP
WSP's picture

Of course they have more tools---THIS IS NEWS?  They can print, they run prices up, they can run prices down!  Who doesn't know that?   Frankly, the ONLY REASON we have "markets" is it makes it easier for them to loot from the sheeple in the cover of darkness.   Anybody that hasn't figured out that the Fed can do whatever it wants is hopeless (a.k.a. 99% of the population of the USSA)!

Thu, 09/08/2011 - 13:48 | 1646900 St. Deluise
St. Deluise's picture

more carrot & stick

why print when he can just keep threatening to?

Thu, 09/08/2011 - 13:51 | 1646922 WSP
WSP's picture

I can think of many reasons, one of which is "bonuses" for the kleptocrats.  Come on, even with the downturn in housing prices big spreads in Florida, the Hamptons, and the Caymens can still run upwards of $25 mil.  Then you have the housekeepers, the drivers, the chefs, and god knows little junior needs a porche---THIS STUFF TAKES DOLLARS, so they print!

Thu, 09/08/2011 - 13:54 | 1646939 SheepDog-One
SheepDog-One's picture

Exactly right, carrot and stick makes markets go up just the same. There will be no more QE, just talk of it in order to keep 401K pension bathrobe brigades from selling.

Thu, 09/08/2011 - 13:49 | 1646904 Shameful
Shameful's picture
  • BERNANKE: SAVERS TO BE PILLAGED
  • BERNANKE SAYS FED HAS `A RANGE OF TOOLS' FOR MORE DESTRUCTION
  • BERNANKE SAYS SUBSTANTIAL FISCAL TIGHTENING COULD HURT BANK BONUSES
  • BERNANKE SAYS FED PREPARED TO USE TOOLS `AS APPROPRIATE' TO BAIL OUT TBTF
  • BERNANKE SAYS INFLATION `EXPECTED TO MODERATE' IN COMING Q'S DUE TO ACCOUNTING GAMES
  • BERNANKE SAYS FED SEES `GREATER DOWNSIDE RISKS' TO OUTLOOK IF FED DOESN"T JUMP TO HYPERINFLATION
  • BERNANKE: POLICY MAKERS SHOULDN'T DISREGARD ECONOMY'S FRAGILITY AND THE DAMAGE DONE BY FED
  • BERNANKE: U.S. FINANCES COULD `SPIRAL OUT OF CONTROL' AND FED IS DOING WHAT THEY CAN DO TO AID SPIRAL

Ok think I fixed those.

Thu, 09/08/2011 - 13:55 | 1646947 WSP
WSP's picture

Post of the day----finally, the truth!

Thu, 09/08/2011 - 14:17 | 1647040 YesWeKahn
YesWeKahn's picture

Fix his mind too, otherwise his stupidity will keep coming out.

Thu, 09/08/2011 - 13:52 | 1646928 SheepDog-One
SheepDog-One's picture

Bernank was direct to go tap dance the shit out of this carrot and stick routine...everyone knows further monetization will NOT happen, as it polls horribly among everyone. Do not be surprised if a JFK II happens, its just what the central bankster FED needs....again.

Thu, 09/08/2011 - 13:54 | 1646941 caerus
caerus's picture

i like how he describes "historical" business cycles without mentioning the fact that the fed is completely distorting business cycles

Thu, 09/08/2011 - 14:01 | 1646962 SheepDog-One
SheepDog-One's picture

'Business cycles' pfffffttt the ONLY thing driving the economy at all over the last few years is MASSIVE money printing and direct debt monetization used to lever up worthless equities and bonds, the FED itself the #1 holder!

Go ahead Bernank lets see you remove ZIRP and peg the borrowing rate at ust 2% from the present zero...and lets see how the 'business cycle' does then! Dare ya!

Thu, 09/08/2011 - 13:54 | 1646942 DefiantSurf
DefiantSurf's picture

Dang......apparently when he is busy talking the PPT stops working to watch....DOW is plunging as he speaks...

Thu, 09/08/2011 - 13:57 | 1646953 SheepDog-One
SheepDog-One's picture

The jawboning carrot on a stick routine is now old, people sense no QE is coming.

Thu, 09/08/2011 - 13:55 | 1646944 GolfHatesMe
GolfHatesMe's picture

Range of tools now includes Solyndra's solar equipment.  Very bullish.

Thu, 09/08/2011 - 13:57 | 1646954 Stax Edwards
Stax Edwards's picture

Solar powered printing presses, lulz

Thu, 09/08/2011 - 13:58 | 1646956 sbenard
sbenard's picture

Bubbles Bernanke will go down in history as the worst and most foolish Fed Chairman in history.

Thu, 09/08/2011 - 14:03 | 1646980 NotApplicable
NotApplicable's picture

Only if he's the last.

Thu, 09/08/2011 - 14:00 | 1646967 sbenard
sbenard's picture

Fed QE is welfare for Wall St!

Thu, 09/08/2011 - 14:03 | 1646978 SheepDog-One
SheepDog-One's picture

And everyone sees it as such, only months away from election time. 

Bernank has now said 'Ive got a kickass set of TV repair tools....I can FIX it' about 1,000 times now, and the wheels are still off. People are now realizing its just all talk and will not be delivered.

Thu, 09/08/2011 - 14:07 | 1646997 NotApplicable
NotApplicable's picture

Followed up with, "That was my skull! I'm so wasted!"

Thu, 09/08/2011 - 14:13 | 1647009 SheepDog-One
SheepDog-One's picture

Exactly...and whats Bernank going to end up doing? Same as Spicolli did when he realized his dads 'Kickass set of tools' couldnt fix anything....blame it on someone else.

He's Gonna Kill Us! Scene - Fast Times at Ridgemont High Movie (1982) - HD - YouTube

Thu, 09/08/2011 - 14:01 | 1646974 MarkTwainsMustache
MarkTwainsMustache's picture

Bernanke is the new Hoover...the president, not the vacuum

Thu, 09/08/2011 - 14:04 | 1646985 lieutenantjohnchard
lieutenantjohnchard's picture

gold or bernanke? gold or bernanke? gold or bernanke? think i'll go with gold.

Thu, 09/08/2011 - 14:06 | 1646993 caerus
caerus's picture

oh goodie...questions

Thu, 09/08/2011 - 14:07 | 1646996 monopoly
monopoly's picture

Just nothing more to say. We are being led around by mad men.

Thu, 09/08/2011 - 14:10 | 1647011 Eric Cartman
Eric Cartman's picture

Softball questions... what a killjoy! 

Thu, 09/08/2011 - 14:10 | 1647012 digalert
digalert's picture

Everyone of you fucking corrupt CONgress excuses, splain me this; How can you sit there while the Bernank spews his "mandate" ideal 2% inflation? WTF? How about a stable dollar? ZERO inflation?

The FED is a criminal bankster institution that should be abolished! Get a fucking adult in treasury! Stop the bailouts, start the prosecutions.

Thu, 09/08/2011 - 14:11 | 1647014 caerus
caerus's picture

bernank just suggested we "all get together" how sweet

Thu, 09/08/2011 - 14:13 | 1647021 SheepDog-One
SheepDog-One's picture

He can get together lots with Bubba his new cell mate.

Thu, 09/08/2011 - 14:16 | 1647035 caerus
caerus's picture

oh shit he just said there is no official reserve currency...its a matter of choice! gold bitchez!

Thu, 09/08/2011 - 14:13 | 1647024 lieutenantjohnchard
lieutenantjohnchard's picture

ever wonder if bernanke wears a gold watch?

Thu, 09/08/2011 - 14:15 | 1647030 YesWeKahn
YesWeKahn's picture

Hi Bernanturd,

 

Can I buy your tools? I need those tools to make my buddies rich.

Thu, 09/08/2011 - 14:19 | 1647046 lieutenantjohnchard
lieutenantjohnchard's picture

if bernanke retires does he get a golden parachute deal? or a paper parachute deal? maybe they pay him in 'tools." lord knows he shows up at every speech with another one.

Thu, 09/08/2011 - 14:19 | 1647048 Hustler Elite
Hustler Elite's picture

"Importantly, we see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy. Longer-term inflation expectations have remained stable according to the indicators we monitor, such as the measure of households' longer-term expectations from the Thompson Reuters/University of Michigan survey, the 10-year inflation projections of professional forecasters, and the five-year-forward measure of inflation compensation derived from yields of inflation-protected Treasury securities."

 

Lol! Someone should tell him that these aren't indicators at all, just mis-educated opinions.

 

"Notably, because of ongoing weakness in labor demand over the course of the recovery, nominal wage increases have been roughly offset by productivity gains, leaving the level of unit labor costs close to where it had stood at the onset of the recession. Given the large share of labor costs in the production costs of most firms, subdued unit labor costs should be an important restraining influence on inflation."

 

He is right about this subdueing inflation at the moment, but it is more than offset by the quanitative easing which has materially weakened the dollar and accelerated its depreciation against others commodities. 

 


Thu, 09/08/2011 - 14:22 | 1647057 tocointhephrase
tocointhephrase's picture

Mr Ben Bernanke...Sir...this is TCTP in London, U.K. Mr Ben sir, may I repeat a question posed to you sir? Is Gold money and may I ask now that it is at $1854.1/£1160+ 4-6%(currently), And may I ask IS SILVER MONEY? Is it? Because in the history of my people it has been And may I ask, Are you are you the fungus underneith Satans toenail.... squib? Are you all going to bite your own tails VERY HARD Mr Bernanke? In God We Trust, everyone else PAYS!    

Thu, 09/08/2011 - 14:22 | 1647059 YesWeKahn
YesWeKahn's picture

Hi Bernankee,

I need to borrow your hammer and use it to hit your head. You need to be fixed.

Thu, 09/08/2011 - 14:22 | 1647063 caerus
caerus's picture

"i didn't see the movie, i saw the original" ok that was funny...ps fuck bernanke

Thu, 09/08/2011 - 14:24 | 1647069 YesWeKahn
YesWeKahn's picture

Bernankee, if the inflation is transitory, why the current downturn isn't. If transitory inflation doesn't need any worry, why does the current recession needs any? I thought you were good in logics, your real IQ astonishes me.

Thu, 09/08/2011 - 14:37 | 1647116 Maybe-Not
Maybe-Not's picture

From the Bernank conclusion..."Thus I do not expect the long-run growth potential of the U.S. economy to be materially affected by the financial crisis and the recession if--and I stress if--our country takes the necessary steps to secure that outcome. Economic policymakers face a range of difficult decisions, and every household and business must cope with the stresses and uncertainties that our current situation presents. These are not easy tasks. I have no doubt, however, that those challenges can be met, and that the fundamental strengths of our economy will ultimately reassert themselves. The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability"

I read this to say...The country will not likely take the necessary steps, Economic policy makers don't know what decisions to make, people and business better get ready for shit to get ugly, things will get better someday, The Fed will do all it can to help, but if it can't, they really don't care.

Thu, 09/08/2011 - 14:40 | 1647125 eddiebe
eddiebe's picture

why don't we just ignore what he says, because at minimum he is mostly wrong in his assessments and his predictions anyway. Maybe that way he'll just shut the fuck up and go into hiding.

Thu, 09/08/2011 - 14:51 | 1647180 TruthInSunshine
TruthInSunshine's picture

Until someone/something comes out and credibly shows how jobs will be created (rather than continuing to be lost) and wages will stabilize or rise (rather than continuing to fall), you can safely place your bets that the economy will continue to worsen.

The middle class IS the economy. They spend money on "stuff" when they have money to spend. I'd venture to speculate that the middle class is responsible for 80% of the two thirds of the economy that is driven by private spending.

It's not rocket science as to why every single assumption built into The Bernank's Virtuous Circle Econometric Theory is fatally flawed, nor why The Bernank is an epic failure of an economist, prognosticator and human being.

Thu, 09/08/2011 - 14:55 | 1647205 SaveTheGreenback
SaveTheGreenback's picture

"...the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus."

LOL!  Let me tranlate that:

"I will print money until my helicopter runs out of gas.  I am the almighty Bernank. Gold doesn't matter at all. I can fix everything.  I am the Fed."


 

Thu, 09/08/2011 - 15:12 | 1647289 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

We have a shed of tools=we have a Fed of fools

Thu, 09/08/2011 - 15:20 | 1647343 DosZap
DosZap's picture

NEWSFLASH,

Bernake and the FED are the TOOLS.

Thu, 09/08/2011 - 15:30 | 1647385 tocointhephrase
tocointhephrase's picture

And those tools are the wrong tools!

Thu, 09/08/2011 - 16:30 | 1647631 Justaman
Justaman's picture

Ben, please put your tool away. 

Thu, 09/08/2011 - 16:26 | 1647645 cocoablini
cocoablini's picture

I think Ben shops at goodvibrations.com for his stimulus tools

Thu, 09/08/2011 - 16:36 | 1647667 bid the soldier...
bid the soldiers shoot's picture

You all know what you have to do.

1:3 But Jonah rose up to flee unto Tarshish from the presence of the LORD, and went down to Joppa; and he found a ship going to Tarshish: so he paid the fare thereof, and went down into it, to go with them unto Tarshish from the presence of the LORD.

1:4 But the LORD sent out a great wind into the sea, and there was a mighty tempest in the sea, so that the ship was like to be broken.

1:5 Then the mariners were afraid, and cried every man unto his god, and cast forth the wares that were in the ship into the sea, to lighten it of them. But Jonah was gone down into the sides of the ship; and he lay, and was fast asleep.

1:6 So the shipmaster came to him, and said unto him, What meanest thou, O sleeper? arise, call upon thy God, if so be that God will think upon us, that we perish not.

1:7 And they said every one to his fellow, Come, and let us cast lots, that we may know for whose cause this evil is upon us. So they cast lots, and the lot fell upon Jonah.

1:8 Then said they unto him, Tell us, we pray thee, for whose cause this evil is upon us; What is thine occupation? and whence comest thou? what is thy country? and of what people art thou?

1:9 And he said unto them, I am an Hebrew; and I fear the LORD, the God of heaven, which hath made the sea and the dry land.

1:10 Then were the men exceedingly afraid, and said unto him. Why hast thou done this? For the men knew that he fled from the presence of the LORD, because he had told them.

1:11 Then said they unto him, What shall we do unto thee, that the sea may be calm unto us? for the sea wrought, and was tempestuous.

1:12 And he said unto them, Take me up, and cast me forth into the sea; so shall the sea be calm unto you: for I know that for my sake this great tempest is upon you.

1:13 Nevertheless the men rowed hard to bring it to the land; but they could not: for the sea wrought, and was tempestuous against them.

1:14 Wherefore they cried unto the LORD, and said, We beseech thee, O LORD, we beseech thee, let us not perish for this man's life, and lay not upon us innocent blood: for thou, O LORD, hast done as it pleased thee.

1:15 So they look up Jonah, and cast him forth into the sea: and the sea ceased from her raging.

A WORD TO THE WISE.....

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