Wow!

Clear as a bell. I hope that our Congress-Critters will have this at their fingertips during his confirmation hearings. I'll send it to mine.

Bernanke will be reconfirmed. In the New Normal, FAIL = just doing his job.

Knowing the way our CONgress is, he will get reconfirmed. He's the built in guy to blame when it all goes down. That's all they want, **** the country.

As my hubby was just heading out to work, I mentioned this Ticker and he simply said, as he slammed the door (Sheesh!), "What is the failure rate of a good .223 round?"

I must admit that I have no idea, even though I have shot his guns and not had any problems. Though I don't think this was the real meaning. :(

I heard this several months ago regarding Obama...but I think it's a far better fit on Bernanke:

Bernanke: Defining success so that any failure qualifies.

"It's you!!", exclaims the tailor.

Fail = Better than expected

Rally on.

Who do Treasury holders want in charge of the Fed?

Volker = a halt to the MBS junk purchases and a better return on the long bond?

I have a different view of Ben Bernanke's performance.

Ben Bernanke became chairman of the Fed on 1st Feb 2006. By then, much of the credit bubble had already blown itself up. From what I recall, the Fed rate, which is the most powerful tool at Ben Bernanke's disposal, was raised. Then the bust hit, and rates were quickly cut to their current low levels.

So BB cannot be criticised for stoking the credit boom, as he was raising rates until the boom went bust, hardly an inflationary action.

You could criticse Alan Greenspan for using exceptionally low interest rates for too long, but even that would have to be mitigated. The huge blow up in credit was caused by individual decisions to extend credit between those individuals. Cheap money from abroad, and from the Fed, helped that credit to be created, but when the world has a desire to create money, there is little anyone can do about it.

Now you can criticise Ben for printing money and buying trash, clearly against the law. But did he really do this off of his own back? Did he really create all of the credit, and flood the markets with it, without informing the President? I find this difficult to believe. Because if he had tried to do this, someone would have told the President and he would have been swiftly removed.

Doesnt the Secret Service have some sort of legal responsibility in the US against counterfeiting? Maybe it is stretching it a bit, but if the Fed had produced all of that cash from nothing, wouldnt the secret service have wanted to know more?

On this basis, I just cannot believe that the Fed's policies werent discussed and approved by Bush and Obama. How could they be? For political reasons, the Presidents may not have wished to have been seen to be making this decision, but they must have been involved. Are US Presidential executive orders all in the public domain?

So then you are left with a scenario where Ben Bernanke is carrying out Presidential policy, he becomes more difficult to criticise. You may not like the policy of monetising the debt, but it is difficult to argue with certainty that it wont work. And you may argue that Ben is breaking the law, but is he breaking the law if he is carrying out an executive order?

Of course, if I am wrong, and the President didnt know, then I will change my opinion. And it would make me worried to the extreme about the US, if its debt can be monetised with the express order of the President or Congress.

Leic, Bernanke was at The Fed during the last part of Greenspan's time.

If the President and Congress knows what the FED is doing. then why the legislation to try to find out what they're doing?

Bernanke should go. I am afraid the Senate is too weak to do the right thing. This mess will not end well.

I thought the Fed's mandate was to support the DJIA & S&P ... well, also AIG, FNM, FRE, C, GM, GMAC, Chrysler, Dubai, etc., etc., etc.

Just 2 quick questions:

Who are we going to replace Ben with?
Is that person going to be better for us?

You sure are relentless. The pitbull who doesn't let go.
If I was a dog I would watch and take lessons.

If credit was suddenly contracted back to 150% of GDP what would that look like in terms of the effect on everyday life?

Genesis,

I note that interest rates were being raised both before BB took over at the Fed, and for a while after, at least it looked that way from the chart I saw on Wikipedia.

But I would be interested to know what you think? Do you believe that the Fed have monetised all of this debt, without the knowledge and the say so of the President?

Whilst I believe, like you do, that bad banks should go bust, I can understand why some want to prop the system up in the hope something good happens. It is a big decision.

Do you print and bailout the big banks, or let the entire financial system go?

That was, and still is the choice facing the authorities. Whichever answer you believe in, you have to admit it is a tough call. Could the President have been bypassed on such a decision?

If I had to pick the best bet I could to bet the farm on it would be that Bernake will get another term.

Imaboomerdropout

"If the President and Congress knows what the FED is doing. then why the legislation to try to find out what they're doing?"

I suspect that Congress hasnt been informed. BB would probably have come to the conclusion that any approach to Congress would get bogged down in all sorts of bickering, and sometimes dithering does more damage than inaction.

And dont Presidential executive orders trump Congress?

If you are going to do something extraordinary, and you have to move fast, there is only one route to go. And if the President has been communicated to, it covers your backside.

I have posted a bunch of links on Facebook, critical of Bernanke (including Karl's posts)... it is amazing how many of my friends replay with something like, "Don't make Ben a scapegoat, yes things are tough but he has saved us from catastrophe."

Well Leic, so far it seems Obama is just a puppet in the White House. A few staff members, lobby groups, congressional and senate leaders man the strings. If Obama is calling or approving Ben's actions, that's kind of like a teacher raising her hand in front of the class and asking if she could go to the bathroom.

The only position I'd like to see Bernanke acquire is in a local prison somewhere.

Pretty much everyone I know thinks or has come to the conclusion that Bernanke and the Stimulus saved us from Depression. And why not? Their 401Ks are almost back to par of Fall 08. Buy and Hold Baby!

Quote:

Their 401Ks are almost back to par of Fall 08

All part of the government illusion and I hear the same things.

If I build a house using a metric ruler and later measure it using a standard ruler has my house grown? If I measure the height of a ship in a lock and then flood the lock has the ship grown taller? Yes, if the added liquidity is not considered.

We have a Bureau of Weights & Measures for a reason, to establish a baseline that is constant.

The point about a credit based Ponzi finance system like we have in America resulting in systematic lower interest rates is SPOT on. This however begs the question of course how the Fed will maintain this Ponzi WITHOUT printing?

I am starting to lose faith in the deflation argument...this is not 1930 anymore, at least they were tied to Gold back then..