[“We’ve been very, very clear that we will not allow inflation to rise above two percent or less.”]
YOU INFIDELS!
There are no inflation of food prices...
There are no inflation of food prices...
And all your Hum-V are STILL belonging to us!
Posted on 12/05/2010 6:50:22 PM PST by Praxeologue
Q: The major banks are racking up profits in the billions. Wall Street bonuses are climbing back up to where they were. And yet, lending to small businesses actually declined in the third quarter. Why is that?
A: A lot of small businesses are not seeking credit, because, you know, because their business is not doing well, because the economy is slow. Others are not qualifying for credit, maybe because the value of their property has gone down. But some also can’t meet the terms and conditions that banks are setting.
Q: Is this a case of banks that were eager to take risks that ruin the economy being now unwilling to take risks to support the recovery?
A: We want them to take risks, but not excessive risks. we want to go for a happy medium. And I think banks are back in the business of lending. But they have not yet come back to the level of confidence that –or overconfidence –that they had prior to the crisis. We want to have an appropriate balance.
Q: What did you see that caused you to pull the trigger on the $600 billion, at this point?
A: It has to do with two aspects. the first is unemployment The other concern I should mention is that inflation is very, very low, which you think is a good thing and normally is a good thing. But we’re getting awfully close to the range where prices would actually start falling.
Q: Falling prices lead to falling wages. It lets the steam out of the economy. And you start spiraling downward. … How great a danger is that now?
A: I would say, at this point, because the Fed is acting, I would say the risk is pretty low. But if the Fed did not act, then given how much inflation has come down since the beginning of the recession, I think it would be a more serious concern.
Q: Some people think the $600 billion is a terrible idea.
A: Well. I know some people think that but what they are doing is they’re looking at some of the risks and uncertainties with doing this policy action but what I think they’re not doing is looking at the risk of not acting.
Q: Many people believe that could be highly inflationary. That it’s a dangerous thing to try
A: Well, this fear of inflation, I think is way overstated. we’ve looked at it very, very carefully. We’ve analyzed it every which way. One myth that’s out there is that what we’re doing is printing money. We’re not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we’re doing is lowering interest rates by buying treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So, the trick is to find the appropriate moment when to begin to unwind this policy. And that’s what we’re going to do.
Q: Is keeping inflation in check less of a priority for the Federal Reserve now?
A: No, absolutely not. What we’re trying to do is achieve a balance. We’ve been very, very clear that we will not allow inflation to rise above two percent or less.
Q: Can you act quickly enough to prevent inflation from getting out of control?
A: We could raise interest rates in 15 minutes if we have to. So, there really is no problem with raising rates, tightening monetary policy, slowing the economy, reducing inflation, at the appropriate time. Now, that time is not now.
Q: You have what degree of confidence in your ability to control this?
A: One hundred percent.
Q: Do you anticipate a scenario in which you would commit to more than 600 billion?
A: Oh, it’s certainly possible. And again, it depends on the efficacy of the program. It depends, on inflation. And finally it depends on how the economy looks.
Q: How would you rate the likelihood of dipping into recession again?
A: It doesn’t seem likely that we’ll have a double dip recession. And that’s because, among other things, some of the most cyclical parts of the economy, like housing, for example, are already very weak. And they can’t get much weaker. And so another decline is relatively unlikely. Now, that being said, I think a very high unemployment rate for a protracted period of time, which makes consumers, households less confident, more worried about the future, I think that’s the primary source of risk that we might have another slowdown in the economy.
Q: You seem to be saying that the recovery that we’re experiencing now is not self-sustaining.
A: It may not be. It’s very close to the border. — it takes about two and a half percent growth just to keep unemployment stable. And that’s about what we’re getting. We’re not very far from the level where the economy is not self-sustaining.
Q: [On calls to cut the deficit]
A: We need to play close attention to the fact that we are recovering now. We don’t want to take actions this year that will affect this year’s spending and this year’s taxes in a way that will hurt the recovery. That’s important. But that doesn’t stop us from thinking now about the long term structural budget deficit. We’re looking at ten, 15, 20 years from now, a situation where almost the entire federal budget will be spent on Medicare, Medicaid, Social Security, and interest on the debt. There won’t be any money left for the military or for any other services the government provides. We can only address those issues if we think about them now.
Q: How concerned are you about the calls that you’re beginning to hear on Capitol Hill that would curb the Fed’s independence?
A: Well, the Fed’s independence is critical. The central bank needs to be able to make policy without short term political concerns. In order to do what’s best for the economy. We do all of our analysis, we do all of our policy decisions based on what we think the economy needs. Not based on when the election is or what political conditions are.
Q: Is there anything that you wish you’d done differently over these last two and a half years or so?
A: Well, I wish I’d been omniscient and seen the crisis coming, the way you asked me about, I didn’t, But it was a very, very difficult situation. And– the Federal Reserve responded very aggressively, very proactively.
Q: How did the Fed miss the looming financial crisis?
A: there were large portions of the financial system that were not adequately covered by the regulatory oversight. So, for example, AIG was not overseen by the Fed. … The insurance company that required the bailout, was not overseen by the Fed. It didn’t really have any real oversight at that time. Neither did Lehman Brothers the company that failed Now, I’m not saying the Fed should not have seen some of these things. One of things that I most regret is that we weren’t strong enough in in putting in consumer protections to try to cut down on the subprime lending problem. That was an area where I think we could have done more.
Q: The gap between rich and poor in this country has never been greater. In fact, we have the biggest income disparity gap of any industrialized country in the world. And I wonder where you think that’s taking America.
A: Well, it’s a very bad development. It’s creating two societies. And it’s based very much, I think, on– on educational differences The unemployment rate we’ve been talking about. If you’re a college graduate, unemployment is five percent. If you’re a high school graduate, it’s ten percent or more. It’s a very big difference. It leads to an unequal society and a society– which doesn’t have the cohesion that– that we’d like to see.
Q: We have talked about how the next several years are going be tough years in this country. But I wonder what you think about the ten year time horizon. Fifteen years. How do things look to you long term?
A: Long term, I have a lot of confidence in the United States. We have an excellent record in terms of innovation. We have great universities that are involved in technological change and progress. We have an entrepreneurial culture, much more than almost any other country. So, I think that in the longer term the United States will retain its leading position in the world. But again, we gotta get there. And we have some very difficult challenges over the next few years.
"We're not printing money." He knows he is printing money.
Q "You have what degree of confidence in your ability to control this?" A "100%." He knows that he has lost control.
Q "Do you anticipate a scenario in which you would commit to more than $600 billion?" A "Oh, it's certainly possible." It is close to a certainty.
"There won't be any money left for the military." We get a glimpse of Bernanke's political views.
"We weren't strong enough in putting in consumer protections to try to cut down on the subprime lending problem." The problem was Democrats forcing banks to make bad loans and the CRA, not inadequate "consumer protections", a Democrat talking point. Once again, we get an insight into Bernanke's political views.
Finally, he sees unemploymenmt rooted in lack of education, another Democrat talking point. We needed more indoctrination, I guess.
A: It has to do with two aspects. the first is unemployment The other concern I should mention is that inflation is very, very low, which you think is a good thing and normally is a good thing. But we’re getting awfully close to the range where prices would actually start falling.”
Since the beginning of 2009 the CRB has risen by over 50% and yet Bernanke keeps trotting out this deflation scarecrow. If we get deflation it’ll be due to massive debt defaults which will be directly attributable to this debt and derivative monster the Fed helped create.
He has visions of grandeur:
“We’ve been very, very clear that we will not allow inflation to rise above two percent or less.”
“The other concern I should mention is that inflation is very, very low, which you think is a good thing and normally is a good thing. But we’re getting awfully close to the range where prices would actually start falling.”
Gold and silver prices are at all time highs because investors are concerned about inflation. China has recently experienced high inflation on food. Increaes in food and otehr products have been announced here for months. Many commodiity prices are soaring also.
What special power does Bernanke possess? It is scary to think that he believes he has the power to stop economic forces. To the contrary, his policies are creating asset bubbles especially in long term bonds.
Instead of reducing excessive government activity in the economy, the fed’s actions are covering for the negative impacts of excessive regulations and government control. When the asset bubbles burst, there will be no options for interest rates and money supply manipulation.
"We didn't change the mortgage industry. We revolutionized it"
--Argent Mortgage
"What it basically means is: to change the perception of reality of every American that despite of the abundance of information no one is able to come to sensible conclusions in the interest of defending themselves, their families, their community, and their country.It's a great brainwashing process which goes very slow and is divided into four basic stages.The first stage being "demoralization"... "[snip]2. The next stage is destabilization....[snip]3. The next stage of course is crisis,[snip]---KGB Defector Yuri BezmenovSoviet Subversion of the Free Press (Ideological subversion, Destabilization, CRISIS - and the KGB)
Definitely Bush’s worst appointment. His willingness to shill for Obama was disgusting. But no match for his utter cluelessness, which was just plain frightening.
It remains like a living nightmare that such deluded idiots are running our country.
The banks have discovered that they don’t even have to try making money by lending anymore.
That was the old model. They would lend money to responsible businesses to help them grow, and make profits for the bank by charging interest.
As I said, that’s the old model.
The new model goes like this: No more lending. Do whatever you want with your depositors funds.
If you lose a ton of cash, then just whine to the government.
Don’t worry. The government will come up with some kind of bailout. Or they might call it “quantitative easing”.
Or they might call it something else.
But don’t worry.
He knows that he does not have a clue as to what is going. He is a fool who is way over his head. His upper lip quivered through the entire interview.
You are Right!...unemployment!...
I'm assuming you're working now.....What do you do, and generally how much do u make?
I don't ask to know those numbers..Just to know where you're coming from.....
I have some question...
If I had to say what was wrong with him, I'd say "sheltered." He's an academic at heart; like most people, he relates what he sees to what's familiar to him. In his case, that would be models, papers and seminars.
I'd say he's at his best when he's dealing with the nuts-and-bolts stuff. That's his strength. But when it comes to out-of-the-box thinking, he's not so strong. Granted that his research has been lauded as pathbreaking, but it was in the trail of Milton Friedman - and squarely based in his strength, namely the nuts-and-bolts operation of a central bank.
The fact that he and his crowd didn't see the storm coming says that he's more comfortable in the box than out of it. At heart, he's a technician.
If, as you say, he doesn't make a good liar, then he is revealing that he does not believe what he is being obliged to say. Can you imagine what his face would telegraph if he were clean-shaven?
Love how he pointed out the disparity in income as related to education...just who has had control and is in the pockets of the teachers unions for the last forty years???? The Democrats own this two society garbage. They even shot down the charter school in DC (no thanks to Barack Obama who sends his kids to Sidwell Friends, the most expensive private school in DC). The school worked and parents fought tooth and toenail to get their kids in that school. Baracks action on day one: defund that school. They OWN this mess, every last bit of the economic and tragic educational system.
He said something similiar about the housing market back in 2005. Housing is his achilles heel..
Either that or he's not sure of himself. I suspect the latter because he really was blindsided by the '08 crisis. 'Taint very good for someone who likes to be on top of his job.
Yet he is "100%" certain of his ability to prevent inflation. In that context, I wish he were more unsure of himself.
I can't argue with that (except out of venality.)
His "tools" tell him that America is like Japan in the '90s, in large part because the excess reserves created are not spilling over into the economy (as of yet), and he thinks he can squash any inflation that becomes serious simply by jacking up interest rates. He may wind up with the monicker "Tool Time Ben" if things don't work out that neatly.
If inflation does come roaring back, he won't foresee it.
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