Tuesday, October 4, 2011

The Shifty Bernanke

Here's a report from WSJ on Fed chairman Bernanke's testimony today before Congress’s Joint Economic Committee:

Rep. Michael Burgess (R., Texas) is getting antsy with the lack of definitive answers that support his views. Is the printing press the only tool left for you? he asks.

Bernanke isn't giving him what he wants: "The basic tool that the Federal Reserve has is operations in the open market that may or may not increase the money supply." The Fed does have tools, he says. "Obviously we want to evaluate the costs and the benefits of any decisions." Upon more printing-press comments from Burgess, Bernanke fights back: "The printing press literally is not actually involved," he says, noting that the latest bond-swap program doesn't include a significant increase in the Fed's balance sheet.
Got that? He has everyone focused on Operation Twist, which he himself wrote in 2004 doesn't work, so he can claim the printing press is not involved. But, put aside Operation Twist and Bernanke is printing like a mad man. As the Fed's own data shows, through the end of August, 13-week annulaized money growth (M2) is at 23.3%.

Bernanke is has potential has a three card monte shark, if the Fed is ended.

1 comment:

  1. You should have seen Sen. Bernie Sanders grilling Bernanke. He asked him why the Fed isn't lending low interest loans directly to small business, Bernanke of course knows how disastrous and inflationary this policy would be but it was hilarious watching him avoiding the fact that the Fed helps out the big banks only.