IMHO Ben should have stepped up to the plate and said to the world that in fact his policies have contributed to inflation. He should have confirmed, what we already know, the objective of current monetary policy is to stimulate inflation. After all, the idea that zero interest rates do not contribute to inflation is, well, a dumb idea that has no basis in fact.
While Ben was doing his best to convince the suckers that believe in his drivel the NY Fed was publishing a blog that concluded quite the opposite. (Link)
The title of this chart from the report says it all:
The report looks at what is rising in price. It equates it to what we actually consume. For example, while the fact that Tenant’s Insurance has fallen in cost is important to the CPI, it has little to do with what we actually spend money on. The conclusion from the NY Fed:
84 percent of all expenditures in the CPI basket were on items that experienced above-average increases in inflation in the last seven months.
The bottom line is that Ben can’t fool me. He can’t fool the economists at the NY Fed. He can’t fool the market. So just who is he trying to fool? I think he is trying to fool himself.
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Really excellent and informative set of posts lately, Bruce, thanks!
ReplyDeleteI also enjoyed the coverage of The Ben Bernank at Mish's blog
http://globaleconomicanalysis.blogspot.com/2011/06/bernankes-self-serving-bold-faced-lies.html
especially this bit from the comments section (edited for brevity):
"My wife was in the room exercising while I listened to Bernanke's entire speech on tv
...She wasn't really listening [but the] moment that the phrase was uttered ending with, "...at no net cost to the federal budget or to the U.S. taxpayer" which occurred at the end of many minutes of statistics she burst into laughter. "Yeah right!" she said."
Thanks again, Jim, MtnViewCA,USA
Think of how the garment industry changed all the sizes when women became obese. A size 16 became a size 12. Women became fooled, thinking: why, the new dress sizes make us skinnier. What the Fed has done is to dilute the money, and the US dollar is worth less, so foreign oil and food costs more.
ReplyDeleteToday the Chairman walks to the lectern with confidence. The press are anxious to know. More QE? Bernanke appears to be defensive about inflation. He says, we are giving money to banks to loan out to get the economy productive. Inflation is temporary. Rather we fight deflation. If it returns, then prices will come down because without jobs, people do not spend. The press write furiously on their pads: Joblessness keeps inflation down. It is our problem causing this inflation, not the Fed.
Across the room one hears: “Look at the last few productivity numbers. The Fed is ‘saving’ us.” Today we learned the dollar is no longer the same measurement. There was a sizable turnout at this dog-and-pony show.
Come on Bruce, you expected the guy to step up to the plate, and admit that his policies did no good, and in addition, caused inflation?
ReplyDeleteIt wasn't billed as a resignation speech.
I'm curious what you think happens now.
In the US, the Oligarchs seem to be seriously signaling that they are prepared for the liquidation to begin.
euro zone finance minister, Jean-Claude Juncker: "When it becomes serious, you have to lie." Big Ben is cut from the same cloth
ReplyDeleteSuggest that the "bankster" epithet be extended to "the Bernankster". These are supposed to be the smartest people in the world, and absolutely everything they have done is so far beyond Keynesian "economics" and totally contrary to Austrian School economics, that they can ONLY be doing it all on purpose. Keynes himself said that there was no surer way to destroy an economy than by debasing the currency.
ReplyDeleteTop down, bottom up, inside out. "Ordo ab chao." Thay have it all planned out. And we are letting it happen.
Bernake is right. Core inflation (or at least what standards it is measured by) is not of inflationary standards at all. Not even close. He has said repeatedly that "no extra money was put in circultation". He's right none were. Have the masses got hold of it or the banks and corporations? Have they distributed it evenly or have they hoarded it and used is as hedge tools on the open markets in commodities and stocks. The consumer hasn't seen any of this money end up in his hands. That is how true inflationary pressure happens. That is how credit truely expands. Is this happening? No, not at all so ok commodity prices have risen as a result of the USD falling but has M3 expanded. No deflation is still alive and well as there is still too much debt. Period.
ReplyDeleteAnon, Please pass the bong...your smoking the same stuff Bernanke is....
ReplyDeletethe banks are hoarding the money getting .25% on reserves courtesy of Ben...The money is circulating from one pigman to the next..The debtpushers are taking the little people out to slaughter..Your ignorance is disgusting and show what side you play from....pigman..
Repeat:
ReplyDeleteAnd the solution is:___________________???
More of the same lies from Bernanke. Remember the "soft landing" we were supposed to have during the mortgage bubble? Hahahahaha!
ReplyDeleteHave they circulated it equally or have they hoarded it and utilized is as hedge devices on the open markets in products and stocks. The buyer hasn't glimpsed any of this cash end up in his hands. That is how factual inflationary force happens.
ReplyDelete