Ben Bernanke

Ben Bernanke
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Bubble Machine Timeline: Visual Evidence Of The Fed's "Third Mandate"





The problem with rushing to combat any sign of economic or financial market turmoil by resorting immediately to counter-cyclical policies is that the creative destruction that would normally serve to purge speculative excess isn’t allowed to operate and so, misallocated capital is allowed to linger from crisis to crisis, making the next boom and subsequent bust even larger than the last.

 
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The Fed's Alice In Wonderland Economy - What Happens Next?





As powerful as the Fed is, it isn’t stronger than the markets. And the longer the Fed tries to sustain abnormalities like QE and 0% interest rates, the more likely it is that the whole business will end with the markets crushing the Fed. At the next sign of a market swoon or of a weakening economy, or with the next episode of deflationary jitters, the Fed will do whatever it takes, no matter what the eventual damage to the dollar’s value. Whatever the details, one thing should be clear. This politburo of unaccountable central planners is the greatest risk to your financial wellbeing today.

 
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Low Interest Rates Cannot Save A House Of Cards





While the Federal Reserve has chosen to keep the Federal Funds rate near zero, it is merely delaying the inescapable and inevitable result of its own monetary policy – another needed economic correction that its actions will have generated but which it will, no doubt, blame on the supposed “failures” of the market economy.

 
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PIMCO's Balls On The Fed: There Will Be No Escape From ZIRP





"There is a chance that the Fed, like a number of central banks in recent years, may find it impossible to escape the effective lower bound to which policy rates were cut during the dark days of the crisis some seven years ago."

 
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Fed Cred Dead!





Last week was the watershed for central banking and for the illusion that the current disposition of things has a future

 
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Game Over





The game is over. The trend has changed. And the Fed knows it. The question is: What will it do about it? Roll-over or fight? But will it matter much if it fights? Janet Yellen clearly lost the crowd this week as “accommodative” was met with a resounding SELL as confidence has been shaken. Her job is now to win back confidence. Whether she can or not is now largely determined how the binary set-up we face here plays out. Bottom line: Bulls need a 1998 like repeat to save this year. How did the Fed manage the big correction in the Fall of 1998: It cut rates of course...Well, good luck with that this year.

 
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It Begins: Australia's Largest Investment Bank Just Said "Helicopter Money" Is 12-18 Months Away





"Instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’?... CBs directly monetizing Government spending and funding projects would do the same. Whilst ultimately it would lead to stagflation (UK, 70s) or deflation (China, today), it could provide strong initial boost to generate impression of recovery and sustainable business cycle... What is probability of the above policy shift? Low over next six months; very high over the longer term."

 
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Austrian Economics, Monetary Freedom, & America's Economic Roller-Coaster





It is time for a radical denationalization of money, a privatization of the monetary and banking system through a separation of government from money and all forms of financial intermediation. That is the pathway to ending the cycles of booms and busts, and creating the market-based institutional framework for sustainable economic growth and betterment. It is time for monetary freedom to replace the out-of-date belief in government monetary central planning.

 
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Hawks, Doves & Chickens





The Fed remains in a box of its own making. We are beginning to doubt whether central bank will ever be hike rates again voluntarily. What is however eventually highly likely to happen is that the markets will force the Fed to act – or as Bill Fleckenstein puts it, “the bond market may take the printing press away from them”.

 
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This Is What Yellen Said About Negative Rates Coming To The US





"I don’t expect that we’re going to be in a path of providing additional accommodation. But if the outlook were to change in a way that most of my colleagues and I do not expect, and we found ourselves with a weak economy that needed additional stimulus, we would look at all of our available tools. And that would be something that we would evaluate in that kind of context."

- Janet Yellen.

 
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What Happened When Japan Hiked By 25 bps In 2000





Historical comparisons, suggest to the FOMC to be extra careful, and don’t underestimate the trust the markets have for the FOMC to act rationally. We all expect the FOMC to act counter-cyclically; a rate rise now would be pro-cyclical, or making the problem worse. Anything FOMC members say after a ‘philosophical’ rate rise would greatly diminish its value. This comparison with Japan suggests that raising rates prematurely is detrimental and avoidable.

 
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The Fed's Pain-Relieving Policies "Have Made The System More Vulnerable To A Crash"





"If only The Fed would get out of the way... Monetary policy designed to spare us from pain has instead made the system more vulnerable to a crash."

 
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Fourth Turning: Crisis Of Trust, Part 2





The world is becoming increasingly chaotic and the American people are seeking a leader who can bring order, make tough decisions, and capture the zeitgeist of this moment in history. They are in search of a prophet generation (Boomer) Grey Champion, whose arrival marks the moment of darkness, adversity and peril as the Fourth Turning careens towards its climax. The Grey Champion doesn’t necessarily have to be a good person, but they must lead and display tremendous confidence in their cause and path. Franklin, Lincoln, and FDR have many detractors, but during their Fourth Turnings, they most certainly led, casting aside obstacles (sometimes illegally) and enduring dark days and bleak prospects for success. Is there someone of that stature ready to lead the American people now?

 
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The 20-Year Stock Bubble - Its Origin In Wholesale Money





Faith in the QE world is waning everywhere and with very good reason. If the "wholesale money" eurodollar takeover was instead responsible for the serial asset bubbles of the past two decades, then it would make far more sense to extrapolate stock trends from that starting point rather than the irrelevant and overstated federal funds monkeying. In this context, the panic in 2008 makes perfect sense as it was a total failure of the eurodollar/wholesale system which not only reversed in total the prior bubble levels it crushed the global economy with it.

 
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