Bernanke Attacks Austrian School Economics: Crazy Opinons

FT's Martin Wolf recently had lunch in Chicago with former Fed chairman Ben Bernanke, who is still on the road hustling his book, The Courage to Act: A Memoir of a Crisis and Its Aftermath.

During the lunch, Wolf asked Bernanke about critics who argue that the Fed shouldn't have intervened in the downturn, that the downturn would have been self-cleansing.The only economic school to hold this view is the Austrian School.

Wolf and Bernanke don't mention at their lunch the Austrian school by name, but that certainly is the school of thought they are discussing.

Here's the exchange:

Other critics argue, I note, that the Fed’s intervention prevented the cathartic effects of a proper depression. He teases me by responding that I have a remarkable ability to keep a straight face while recounting what he clearly considers crazy opinions.

I add that many critics still expect hyperinflation any day now. “Well, we were quite confident from the beginning there would be no inflation problem. And, of course, the greater problem has been getting inflation up to target. As for allowing the economy to go into collapse, this is the Andrew Mellon [US Treasury secretary] argument from the 1930s. And I would think that, certainly among mainstream economists, it has no credibility. A Great Depression is not going to promote innovation, growth and prosperity.”

I cannot disagree, since I also consider such arguments mad. Nevertheless, I note, we have to recognise that neither he nor the Fed expected the meltdown.

Actually, as Murray Rothbard and Robert Higgs have both pointed out, the Great Depression was not prolonged because of monetary policy but because of other government policies that did not permit the economy to self-cleanse.

Bottom line: Bernanke's distortion machine was working well in Chi-town. His "book" tour seems to be as much about dissing Austrian economics and gold, then it is about promoting his book. He fears the Austrians.

-RW

BERNANKE: Rand Paul’s ‘Audit the Fed’ Bill is ‘Very Deceptive’

Former Federal Reserve chairman  Ben Bernanke  gave a blistering rebuke to Rand Paul’s proposed bill to audit the Fed, reports NyPo.

“This is very deceptive — this bill is very deceptively titled,” Bernanke said during a discussion at Nasdaq’s Times Square headquarters to promote his new book, “The Courage to Act.”

Bernanke suggested the bill wasn’t about increasing transparency so much as giving lawmakers more control over the Fed and its monetary policies.

“You’re basically saying that Congress should run monetary policy,” he said. “I always like to say, if you love the way they’re managing fiscal policy, let them run monetary policy.”

On this specific point, I happen to agree with Bernanke.

From the start, I have not been a big fan of the Audit the Fed bill.

 In May 2009, I wrote:

I Smell A Trap

Ron Paul's House bill calling for an audit of the Fed is getting support from the strangest places.

Lew Rockwell today links to a column by Dean Baker who now supports an audit of the Fed.

The problem with Baker's column is that he doesn't quote Ron Paul. He doesn't even mention that Paul introduced the bill. He does, however, mention Elizabeth Warren, who heads a congressional oversight panel, dealing with bailout money.

I've discussed Warren before, her oversight committee went so out of bounds that two members of the five member panel dissented. She is a big time Obama operative. You don't want columnists using Warren as a signal flag to support Paul's bill.

Why?

This what Baker would like to see come from an audit:

The proposal for a GAO audit of the Fed is a first step towards reasserting democratic control over this institution...In a democracy, it is difficult to justify a situation in which the most important economic policy making body is, by design, more answerable to the banking industry than democratically elected officials.

I hope Congressman Paul knows what he is doing, to me it sounds like this may evolve into a power play over who controls Fed money printing, rather than an investigation into whether the Fed should be printing money in the first place. If Democrats start signing on to the bill in heavier numbers, it may be a sign that an audit may come, but it will end with a restructured Fed controlled by left wing radicals, who believe money is for handing out and who have no fear of inflation.

My view has always been that the focus should be on ending the Fed, or at least preventing the Fed from expanding the money supply. An audit of the Fed just leaves the door open for all sorts of power players attempting to gain control of the printing presses rather than destroying them. Do we really want Mitch McConnell or Nancy Pelosi (or for that matter Rand) having a say in the money printing?

By all means, audit the gold, audit Fort Knox, but not the Fed. End the Fed.

-RW

Financial Emergency!!!

(ht Pippa Malmgren)

Ben Bernanke on Bitcoin

While in San Francisco at  the Commonwealth Club of California earlier this week, former Federal Reserve chairman Ben Bernanke was asked about Bitcoin and he made a brief comment.

He said it was technologically very sophisticated and that the technology will be very useful. However, he said he did not see it becoming a major means of exchange.

Then he added, "It will run into trouble because its aim is to be anonymous and it will cause a lot of government attention."

-RW

Ben Bernanke Gives Out Janet Yellen's Working Email Address

In a positively bizarre performance last night at Nourse Theatre in San Francisco, in addition to providing mountains of disinformation on gold and monetary policy, former Federal Reserve chairman gave out current Federal Reserve chair Janet Yellen's working email address.

During the Q&A last night  at a Commonwealth Club of California event with questions by Michael Moritz, Managing Partner, Sequoia Capital, Moritz asked Bernanke why, as Fed chairman, he used the pseudonym Edward Quince in his email correspondence,

Bernanke defended the use by saying that he did not want to be inundated with emails.

He said the president also used a pseudonym.

He then went on to say publicly to the crowd of 1,200, "I'm not sure she would want me to reveal this but to Janet Yellen's credit she uses the email janet.yellen@frb.gov."

(Note: It's possible Bernanke said .org instead of ,gov, He said it fast, but I believe it would be .gov)

  -RW

Ben Bernanke Visits San Francisco to Lie About Gold

By Robert Wenzel

Former Federal Reserve chairmen Ben Bernanke was in San Francisco last night.

In conjunction with the promotion of his book, The Courage to Act: A Memoir of a Crisis and Its Aftermath, he appeared at the Commonwealth Club of California in a Q&A format where he was questioned by Michael Moritz, Managing Partner, Sequoia Capital.

I was stunned by the way the Q&A began. Stunned.

If there is a clue as to what government officials are concerned about by what they go out of their way to lie about, then it is clear that they are very concerned that American citizens may not believe the US government has the gold it claims to have in its vaults. That is, gold that is listed on the financial books of the US Treasury and via Treasury certificates on the books of the Federal Reserve.

The first question Moritz asked was a total softball, "So what did you do as Fed chairman, go around to all the banks in the country and see if they had cash in their vaults?"

The crowd of approximately 1,200 at Nourse Theatre laughed. But it is noteworthy how Bernanke answered the question and where he took it.

He replied, "No, but I did visit the vaults at the New York Fed where the gold is stored." And then he looked at the crowd and said, "I checked, it's all there, so you can relax."

The problem with this answer is that US Treasury gold is not held at the New York Fed, it is supposedly held at Fort Knox, in Fort Knox, Kentucky, just south of Louisville (with smaller amounts at West Point and Denver and an even smaller amount at the NY Fed)

Moritz's follow up question provided Bernanke the opportunity to correct his statement if it was just a slip. Moritz asked, "Isn't gold for foreigners also held at the NY Fed?"

Bernanke did not at that point attempt to clarify his earlier statement, which implied that US gold was held at the New York Fed. Instead, he went on to make another misstatement.

He said that there were many scare stories that there was no gold being held at the New York Fed and that in fact Germany had decided to withdrew all its gold. "They just came and carried it back," he said.

But although, Germany has withdrawn some gold, it has far from withdrawn all its gold. Of some 300 tons of gold originally held at the New York Fed by the German central bank, approx. 200 tons has yet to be withdrawn. Indeed, they have launched a new program to audit the gold they are still holding at the New York Fed.

Bernanke then went on to mislead on the Fed money creation role. He said that it was an error to think that the Fed prints money. He said that it was the Bureau of Engraving which does the printing . While this is correct in a technical physical printing sense, it misdirects from the more important fact that it is Fed monetary policy which plays a major role in determining how much money is actually printed--and when you go beyond physical money and include money in checking accounts (and more) as do all economists, then it most certainly is well beyond what is going on at the Bureau of Engraving.

Bernanke concluded his amazing performance by absolving himself of any role in the recent financial crisis.

He said that the financial crisis was not the result of failed monetary policy but occurred because of regulatory problems.

 Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics

Former Citigroup CEO to Sell His NYC Apartment for $88 Million

This should cause everyone from plain old bankster haters to Occupy Wall Street protesters to bust a gadget.

Former Citigroup Chairman and CEO Sandy Weill just sold his NYC apartment for $88 million, a record for an NYC apartment, according to WSJ.

The highest known home sale in the U.S. was earlier this year when $100 million was paid by a Russian billionaire and investor in social-media companies, Yuri Milner, for a mansion in Silicon Valley.

Weill is in contract to sell his penthouse, plus wrap-around terrace, to the 22-year-old daughter of Dmitry Rybolovlev, another Russian billionaire, for the full $88 million asking price, reports WSJ.

In 2001, Weill became a Class A Director of the Federal Reserve Bank of New York. Class A Directors are Board Members who are elected by Member Banks of the Fed to represent the interests of Member Banks.

When the recent financial crisis hit, resulting in Bear Stearns and Lehman Brothers going down, many at the time feared that the same might happen to Citigroup. However, the philosophy of Bernanke, Geithner and Paulson suddenly changed when crisis began to threaten Citi. Bernanke opened up the monetary spigots, Paulson went to Congress for money and Citi, Goldman along with others were stuffed with money.

Krugman is Setting Himself Up for the Big Fall in 2012

Paul Krugman is out with his usual nonsensical commentary, Keynes Was Right.

Most fascinating is that he unintentionally laid a huge land mine in the column. He writes that Keynesian policy is not currently being applied in the U.S. and that "...one of these years we might actually end up taking Keynes’s advice, which is every bit as valid now as it was 75 years ago."

This means that as Bernanke's money printing impacts the economy and causes a spike in the numbers that Krugman won't be able to explain the manipulated upturn in the economy in terms of the government implementing Keynesian policy recommendations.

What's he going to do? The economy will be going up and he is on record as saying Keynes wasn't in the game.

In truth, what is going on is what always goes on in these boom-bust cycles. It is only explained correctly by Austrian business cycle theory. The cycle is a complete creation of central banks. In the U.S., it's  the Federal Reserve. The Fed prints money, which gooses the capital goods sector. Eventually, fearing price inflation caused by the money printing, the Fed stops the printing, which causes the bust phase.

Recently, Bernanke has been on a new money expansionary phase, which is likely to result in manipulated gains in the type of data that Krugman watches. But only ABCT will be able to explain it. Since Keynesians like Krugman currently believe that not enough Keynesian-type fiscal policy has been implemented to turn the economy around, they will have no way to explain Bernanke's induced manipulated boom. This will mean kaboom for Krugman.

Things That Happen Every Sixty Seconds

Click on charts to enlarge.

And don't forget the biggie:

Every 60 seconds, Ben Bernanke increases the money supply by $1,660,958.91


(ChartsViaBarryRitholz)

Bernanke's Christmas Gift to Obama Has Arrived

Stocks hit a 5-month high on the last trading day before Christmas and new data on the housing market and with regard to unemployment suggest the most watched economic indicators will soon be flashing green for recovery.

This manipulated economic boom will, of course, cheer the President as it will boost his re-election bid, but, note well, most of the rest of us will all end up paying for the Bernanke inspired money goosed economy, with higher prices on everything.

Prices have been nowhere near Krugman's deflationary expectations. Over the last 12 months, the headline CPI index increased 3.4 percent. But this will look like happy days compared to what is coming. Stock players and tech and oil workers will soon start spending the money gains they are seeing. Money gains they have because they are first in line when Bernanke prints. They are going to be bidding for consumer goods against the rest of us---and they are going to have the money to do it. In other words, most of us will have to scrimp and budget carefully, as Bernanke printed money flows elsewhere.

So yeah, the macro-economic numbers will look good, but down deep we will all be paying for this central bank distorted economy.

Merry Christmas.

Bernanke Money Printing Benefits Tech Sector

I have pointed out earlier this year, one of the sectors getting its hands first on new Ben Bernanke printed money is the tech sector.

A new comment by John Shinal at Market Watch indicates this trend has continued through out the year and will likely continue into the new year:

It’s worth noting, because what Oracle is experiencing, and will continue to experience in 2012, also will impact every other U.S. tech company next year.

In short, salary costs per worker are headed higher, both for engineers and for sales staff with technical experience. Job opportunities abound for these prospects because their skills are in strong demand, as information technology becomes an ever-more important part of strategic planning for corporations.

For tech workers who are tired of their jobs, now is the best time in years to look for a new one that pays more. Fresh data and reporting provide evidence that the booming job market in technology is gathering more steam.

“Tech is one area that’s growing and thriving across the board,” said Adriana Ganos, a principal in the software-engineering practice in the Boston office of recruiting firm Winter, Wyman. “There are opportunities for everyone right now.”

For the last six years, Ganos has been helping put together software-development teams for start-ups and for “small organizations within large [tech] enterprises,” which she declined to identify.

She described the current state of her business as “very healthy … extremely healthy,” and added that West Coast companies are now coming to Boston in search of engineering talent.

What's going on here is that newly printed money tends to find its way to the capital goods sector, which includes the stock market and especially the IPO market.

The IPO market has been a huge funding source for the tech sector. In 2011, companies raised $36.3 billion from 125 IPOs. A good chunk of that ended up in tech. Groupon, LinkedIn, Jive Software, Zillow, Pandora Media and Zynga all went public this year. Zygna, alone, raised a billion dollars. That's a huge pot from which to bid for engineers.

As Bernanke money printing continues to hit the economy, the tech sector along with oil workers are likely to be major beneficiaries, ahead of the price inflationary curve.

(Thanks2JimWaddell)

Keynesian Economics vs. Austrian Economics

A great clip. Fed chairman Ben Bernanke completely missing the housing crash in front of him and Paul Krugman just before the crash admitting he was clueless.



(Thanks2anAnonymousCommenter)

Krugman Attacks Wenzel and Ron Paul

Paul Krugman links today at the New York Times to an earlier post of mine where I discussed Krugman's confusion about inflation. His reference to me is an attempt to get at Ron Paul. Krugman writes (The second link is to my post):

Now, Paul is unique among the GOP contenders, or for that matter among politicians in general, in making monetary policy his signature issue. So it’s worth noting that he is among those who have been wrong about everything in this slump.

Here’s a sample from earlier this year: Ron Paul: Gold, Commodity Prices “Big Event” Signaling Economic Collapse. Oh, and for fun: Understanding Why Ron Paul Knows More About Inflation Than Does Paul Krugman.

He then goes to post a screen capture which shows that commodity prices are down 3.63%, since May. He continues:

The second of those articles [my article-RW], by the way, predicts a surge in consumer prices in the second half of 2011. Not according to either the CPI or, for those who are convinced that the government is lying, billion price index, both of which show prices leveling off in the second half. But hey, there are still 17 days left!

Got that? He posts a commodity prices chart and then switches to a discussion of consumer prices. Here's the data for the increase, year over year, in the consumer price index for each month of this year:

2011-01-01 3.604
2011-02-01 4.708
2011-03-01 5.879
2011-04-01 6.808
2011-05-01 7.484
2011-06-01 7.439
2011-07-01 7.804
2011-08-01 8.200
2011-09-01 8.528
2011-10-01 7.793

Current CPI level 226.763

What you see is a steady increase in the CPI month after month the entire year, except for a minor slowdown in November and even smaller dip in May. As I regularly write in the EPJ Daily Alert, you never want to look at any specific data point but the trend. Which raises the question, Is Krugman making his entire anti-inflation case, at the consumer level, on the dip in one month's data point?

Or does he have a reading comprehension problem? In my post back in May, which he links to, I specifically call Krugman out on this:

The further problem with Krugman's analysis is that he mixes commodity prices with consumer prices...Headline inflation is about consumer prices not commodity prices. Because Krugman doesn't understand Austrian economics, he tends to aggregate all prices together. For him, all prices in the aggregate move together, which takes the richness out of the data. Austrians don't make this mistake. They understand that when new money enters the system, it enters the capital goods sector and the raw commodities sectors first. Only later, does it works its way to into consumer prices.

It is the inflation from earlier money printing that is now starting to hit the consumer sector, Krugman will never spot this by looking at commodity prices. Krugman has his eye on the wrong part of the ball park. He is watching the grounds crew move off the field and is not watching the stands fill up. He is declaring the game over before it even starts.

Got that? He shows a post of declining commodity prices, when I am discussing consumer prices.

But even with commodity prices, which are notoriously volatile, as the Fed prints and prints and prints more money. Prices go up and up, with minor violent pullbacks:

I don't know about Krugman, but I am grateful that price inflation has not increased at a faster pace. As the Austrian economists Ludwig von Mises and Friedrich Hayek taught the world is a very complex place, that's why we can never know for sure exactly when or how the massive destructive force of huge money printing will hit the price level in dramatic fashion. When a doctor gives a man dying of cancer 6 months to live, the man should not celebrate he has lived six months and a week. It does not mean he has been cured. It isn't that the Grim Reaper has forgotten about the man. It may take 7 months, 9 months or 11 months, but if the cancer continues to progress, the Grim Reaper will eventually knock all to soon at the door.

Helicopter Ben continues to spread new money as though the banksters need to use it for toilet paper. The price inflationary consequences of this will eventually be severe and make a fool out of Krugman's comment much  better than I can in this post.

UPDATE: Relative to the comments  a few of view have pointed out that Krugman's reference is only to today's plunge in commodities, which was 3.63%, and not the entire period of his chart which goes back to May. I apparently was giving him more credit than I should have, according to you guys. In error, I simply took the reference off the chart as being for May, which I shouldn't have, but if you think a one day drop in commodities proves anything, them I'll be sure to blast a chart the next time commodities climb in one day by MORE THAN 3.63%, for your amusement and pleasure.

As for my "lying" about the increase in the CPI, I link to the data, and call it data, not the percentage change, since I was focusing on absolute increase and not the percentage change. My point was that the absolute price level was increasing regularly. But, hey, if you guys are Krugman followers, I understand how you would only look at the surface of an argument rather than dig into the references that point out what data I was referring to.

Bernanke Announced He Was Going to Push Down Long-Term Interest Rates, Then Refinanced His Own Mortgage

Federal Reserve Chairman Ben Bernanke lives in a three-bedroom, 2,100-square-foot, attached town house near the Capitol. It has an appraised value of roughly $850,000, not far from the $839,000 he paid for it in 2004. A public record search shows he owes $672,000 on the home, after refinancing his mortgage twice, reports WSJ.

One refinancing of his 30-year mortgage was in late 2009. The other was just this September, shortly after the Fed announced a new program, known as "Operation Twist," which aimed to drive down long-term interest rates.

Do you think Bennie might think this is the bottom in rates? If he is refinancing shouldn't you be?

WSJ goes in to tell us that most nights Bernanke spends at home with his wife, Anna, reading on his Kindle after dinner. In the past 18 months, he has told others, he has read 200 books on the Kindle.

Lately he's read about pre-World War II Germany, "In the Garden of the Beast," and a room-by-room guide to a 19th-century British home, Bill Bryson's "At Home."

Is M.I.T. Secretly Running the Fed?

EPJ's Bob English writes:

It's official: Fed led by quartet of MIT grads.

File under curious. I wonder if they all had a similar mentor whose legacy is now driving the Fed.

The Federal Reserve has just announced that Steven B. Kamin will officially become the director of Fed’s chief international economic advisory division.

Kamin became acting director in August following the departure of Nathan Sheets, who led the office after almost four years and became the global head of international economics at Citigroup Inc. Kamin’s appointment is effective Dec. 11, the Fed said in a statement today.

As director of the Division of International Finance, Kamin briefs Fed Chairman Ben S. Bernanke and other officials on economic developments outside the U.S. and represents the Fed at international meetings.

Kamin holds a bachelor's degree from the University of California at Berkeley and received a Ph.D. in economics from the Massachusetts Institute of Technology.

With this appointment, all three of Bernanke’s top staff advisers are M.I.T grads.

William English (no relation to Bob)is the director of the Division of Monetary Affairs, He also received his PhD from MIT,as did David Wilcox director of the Division of Research and Statistics.

Bernanke also received his PhD from M.I.T..

Dear Congress: Bernanke Just Lied to You

On December 6, 2011, Ben Bernanke, Chairman of the Federal Reserve, responded to recent media accusations regarding the Fed's emergency lending during the financial crisis. In attempting to correct "numerous errors and misrepresentations" by the media, Bernanke himself relied on a variety of misleading, if not outright deceptive, tactics and fact-twisting.

EPJ's Bob English has written a devastating open letter expose to Congress detailing the many ways that Bernanke attempted to mislead and deceive them. Don't miss this important expose, here.

Why the Fed Swaps, Announced Today, Will Expand the Monetary Base

Tony Crescenzi,Senior VP,Strategist and Portfolio Manager at Pimco explains how the swaps announced by the Fed will expand the Fed's monetary base:

[A]ny use of the Fed’s swap facility expands the Fed’s monetary base: all dollars, no matter where they are deposited, whether it be Kazakhstan, Japan, or Mexico, wind up back in an American bank. This means that any time a foreign central bank engages in a swap with the Federal Reserve, the Fed will create new money in order to make the swap. Use of the Fed’s liquidity swap line in late 2008 was the main cause of a surge in the Fed’s monetary base at that time. The peak for the swap line was about $600 billion in December 2008. Some observers will therefore say that the swap line is a backdoor way to engage in more quantitative easing.

Keep in mind that the monetary base is important, however, money in the base does not mean it is necessarily money in the economy. For example, most of the money created by the Fed in 2008,and up until recently, went into excess reserves and thus did not impact the economy. Bernanke may not be so lucky this time. If the money stays in the system and doesn't end up in excess reserves, the price inflationary consequences will be huge.. The money created by the swaps is being used to bailout Greek, Spain etc debt. That money is likely to end up being used to buy even more PIIGS debt, which means it will end up in the hands of the Greeks, Spaniards, etc. and not as excess reserves. German Chancellor Angela Merkel fought tooth and nail to prevent the ECB from .monetizing the PIIGS debt, so instead, Bernanke has stepped in to inflate.  Bernanke is playing with fire here and Americans are all likely to get burned with soaring prices.

Is Bernanke Leaking Inside Information to Goldman Sachs?

Bloomberg reports:

The biggest bond dealers in the U.S. say the Federal Reserve is poised to start a new round of stimulus, injecting more money into the economy by purchasing mortgage securities instead of Treasuries.

Fed Chairman Ben S. Bernanke and his fellow policy makers, who bought $2.3 trillion of Treasury and mortgage-related bonds between 2008 and June, will start another program next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week. The Fed may buy about $545 billion in home-loan debt, based on the median of the 10 firms that provided estimates.

Now how the hell could primary dealers, who include Goldman Sachs and other banksters, know this, unless Fed chairman Bernanke and other Fed officials are leaking this information to the favored elite?

I mean, as a Primary Dealer, do you just one day wake up and say to yourself, "Aha, the Fed is going to buy about $545 billion in home-loan debt, next quarter." And 16 primary dealers all had this same vision?

WSJ has reported that Fed officials have leaked market sensitive information before. This is a damn outrage.  Bernanke justifies all this by holding the position that he doesn't announce the exact amount of buying. It could actually be $550 billion or maybe $551 billion. Puhleeze. They are sending the non-inner circle, an ethnic Sri Lankan Tamil, for example, Raj Rajaratnam to prison for eleven years for insider-trading that most assuredly is less valuable information than what the Fed is leaking to the elites.

Glenn Greenwald is correct, the country is fast becoming a country where there are two segments of society, an elitist group who can get away with anything and the rest of us who are burdened by more laws and regulations everyday.

Greenwald states:

[L]aw is no longer what it was intended to be - a set of rules equally binding everyone to ensure that outcome inequalities are at least legitimate - and instead has become the opposite: a tool used by the politically and financially powerful to entrench their own power and control the society...elites are immunized for egregious crimes while ordinary Americans are subjected to merciless punishment for trivial transgressions.

This is the only way to understand how Bernanke can get away with leaking his next moves to the elites, while Rajaratnam gets thrown in prison for what shouldn't even be considered a crime.

When power centers are created, and the Federal Reserve is a huge power center, the elite figure out how to use such a power center for their own benefit. It is really time to end these power centers, the world will get along much better without them.

Florida Students on to Bernanke's Happy Talk

Fed chairman Ben Bernanke spoke to business and economics students from throughout Northeast Florida at Jacksonville University’s Davis College of Business.

After his prepared remarks he took questions.

One student, according to Bloomberg,  asked if “skyrocketing” commodities prices may threaten his inflation outlook.  Bernanke kept his blinders on and said rising commodities prices are “the one exception” to a broad reduction in inflationary pressures.

Asked by another student about rising gold prices and concerns over inflation, Bernanke simply responded with Alice in Wonderland happy talk:

Let me be very clear: We are absolutely committed to keeping inflation low and stable.We have the tools to unwind and tighten policy at the appropriate time. We will honor both sides of our dual mandate.

In truth, the minute Bernanke stops printing, he is going to crash his propped up manipulated recovery. If he continues printing, it will bring on the mother of all inflations. It sounds like these students were on to Bernanke.

Sparks Meets w/ Greenspan and Bernanke

Well done, by someone who clearly understands Austrian economics and the fraud the Federal Reserve is.



(Thanks to F.M.)