Monday, January 25, 2010

Is Bernanke Buying His Reconfirmation?

WSJ' Real Time Economics reports:
Senate Majority Leader Harry Reid’s tepid endorsement of Fed chairman Ben Bernanke on Friday left some investors queasy. Mr. Reid said his support for Mr. Bernanke was conditional. “To merit confirmation, Chairman Bernanke must redouble his efforts to ensure families can access the credit they need to buy or keep their home, send their children to college or start a small business.” He added that he expected an announcement from the Fed chairman on this issue soon
WSJ then appears to read into this that Bernanke has promised Reid that he will print more money. It could be or it might just be a Bernanke promise to issue a statement that he will print more money.

Then again, Bernanke may have just twisted Reid's head in knots. We already know that Bernanke has a good chunk of the economics profession snookered into thinking that he is pumping away already because the monetary base is up. I'm sure that with his tool box he can convince Reid that he is even printing more, so although Bernanke may have jived talked Reid into thinking that he is headed down to Ace Hardware to buy some more green ink. I wouldn't be surprised if Bernanke is using a green paint can as simply his lunch box, with a sandwich in there and nothing else.

Bottom line: Bernanke may talk smack about letting the money presses roll, but this is one slick gangsta, who is not going to let anyone really see his cards in advnace.

1 comment:

  1. slick ??? he had no clue what low rates would do, and he caused all the bubbles over the last 10 years. If he knew this would be the result, he would have tried different route.

    I think he learned his lessions in rates/credit effects over the last 10 years. I am hoping that is the reason he stopped printing more.