The Zen And The Spin Of Ben Bernanke
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Last night, Fed Chairman Ben Bernanke made a rare visit to 60 Minutes so he could play his part in the hopieum-deluge strategy of the Obama administration. Sunday’s televised interview was the first by a Fed chairman in over two decades. Ben was absolutely beatific as he told America that the Great Recession should be ending in 2009! Of course, Ben defended the government actions being taken to shore up the banking system, saying that a recovery won’t happen until the financial system stabilizes.
Ben gave the audience the “everyday man” schtick about himself, recounting his experiences working on construction and waiting tables in a poncho. He spanked Wall Street, saying “the era of this high living, this is over now.” Some of the 60 Minutes piece took place in Dillon, South Carolina, where Mr. Bernanke grew up. Mr. Bernanke was there earlier this month to attend a highway interchange dedication in his honor.
“I’d just like to say to the American people…that I have every confidence that this economy will recover, and recover in a strong and sustained way. The Fed is going to do everything possible to support this recovery. However, that recovery is not going to happen until the financial markets and the banks are stabilized.”
60 Minutes correspondent Scott Pelley joked that when he first proposed doing this interview a year ago, Ben’s representative shut him down. “I wonder why are you doing this?” Pelley asked. “It’s an extraordinary time,” Bernanke explained. “This is a chance for me, I think, to talk to America directly.” Ben has been on the rubber-chicken circuit lately. In addition to quite a few appearances before Congress lately, he spoke last month to the National Press Club and last Tuesday to the Council on Foreign Relations. Both events even included question-and-answer sessions.
Bernanke admitted that the Fed is “effectively” printing money rather than using taxpayer funds for these initiatives aimed at mortgage markets, commercial paper, asset-backed securities and other segments of the credit system. This means the printing presses aren’t ACTUALLY running on overdrive, rather there are a whole lot of electronic credits being zipped out to the banks. Ben made sure to comfort Americans that we won’t be turning into Zimbabwe II.
“When the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation.”
Unfortunately, the latest evidence from Market Watch, shows that global trade flows are plunging at an alarming rate. Over the past five months since the credit crunch intensified, real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace. The pace of the decline is unprecedented in modern times, economists say. “We doubt even during the Great Depression that trade collapsed with such ferocity,” said David Greenlaw, an economist for Morgan Stanley.
The Great Recession, as the IMF calls it, has severed a crucial link in the global economy. U.S. consumer spending has been the main engine of growth for the whole world, but that spending was based largely on phantom gains in asset prices, inflated by cheap money from abroad, that has now been destroyed.
This is why the hopeium is flowing. China is extremely nervous about all of the U.S. debt it holds. Barry attempted to alleviate it’s fears, which are shared with many foreign investors, by pumping up the U.S. and sending a message to the G-20 that America is the best place to invest. It remains to see if the world buys it. China reads, and knows that the Fed IS basically printing money, which will continue to devalue the dollar.
Good luck with the cheerleading blast, Ben. I’m sure Barry is pleased you stayed “on message.”
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March 16th, 2009 at 11:58 am
While Bernanke attempts to explain the reasons for the economic meltdown, he fails to mention how much of the blame goes to the Federal Reserve and their easy money policies under Greenspan. Working productive Americans are bailing out the financial establishment that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.
Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. We believe a growing repudiate the debt movement could actually save our wealth and the markets and suggest this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.
The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts