Ben Bernanke: Blather from the Ivory Tower!

By: Guest Authors

By: Michael Haltman

Bernanke Q and A redux: Nothing but a snake oil salesman!

Back in December after a Ben Bernanke press conference like the one I am  watching now, I wrote ‘Ben  Bernanke: Snake oil salesman! (Bonus animated video: QE explained)‘. What I  wrote then seems to still be just as relevant today. The video can be watched at  the link above.

If any new writing had been required I would certainly  offer it, however, what I heard from Fed Chairman Ben Bernanke this afternoon is  simply more of the same:

Watching  Ben Bernanke answer questions am I the only one who thinks he sounds as if he is  just throwing s–t against the wall hoping that something will  stick!

(While  the lemmings (business news pundits) in his audience just seem to listen and  nod)

To  date the aforementioned s–t that I speak of is comprised by QE1, QE2, QE3,  Operation Twist and whatever name they give to his announcement  today.

And  so far, nothing has worked typified by an unemployment rate that drops only  because people have lost hope and have given up looking for  work!

In  any event, in our lives all of us have known “that” one salesman who tries every  gimmick and plays every angle in order to put as much into the pipeline as  possible hoping it will all close, when in reality very little of it ever  will.

Ben  Bernanke is that salesman who is expanding the Fed balance sheet to a point at  which it will be impossible to reverse and yet, nothing in the economy actually  seems to improve when you scratch below the surface of the  numbers.

At  the same time government borrowing spikes higher with treasury debt outstanding  now at a point where the country cannot afford to pay for that debt and needs to  borrow more money simply to service the interest due bondholders. And these  bondholders to a large extent is actually our federal government  itself!

Sufficiently  confused yet?

Now  imagine for a second the impact on federal spending were yields ever to revert  to historically “normal” rates. Therein lies the Fed Chairman’s true  quandary.

He  warns us about the dangers of Washington kicking the can down the road when it  comes to “solving” the fiscal cliff but, if any agreement is actually put  together, the people we are forced to call our leaders will do exactly that  because after all when difficult and unpopular decisions need to be made  politicians will be politicians.

Bottom  line – Ben Bernanke is an academic who will continue to try his Ivory Tower  methodologies to get us out of the mess that we are in, and we can only hope  that he is better in the future than the unmitigated failure that he has been in  the past!

No Comments

No comments yet.

RSS feed for comments on this post. TrackBack URI

Sorry, the comment form is closed at this time.