Looks like Bernanke is now looking to slough off blame for the impending crash which he knows will eventually happen when the market starts demanding higher interest rates on government debt due to fear of not being repaid.
From the article:
Politicians generally prefer holding interest rates low, which stimulate the economy and hiring. Bernanke stated: "Such gains may be popular at first, and thus helpful in an election campaign, but they are not sustainable and soon evaporate, leaving behind inflationary pressures that worsen the economy's long-term prospects,"… "Thus political interference in monetary policy can generate undesirable boom-bust cycles that ultimately lead to both a less stable economy and higher inflation,"
OHhhhh, now I see, Bernanke. When the fed manipulates these things for its own reasons (i.e. enriching the banking elite of the country) then it is all sustainable and “something for nothing” is achievable. But when government puts pressure on the supposedly independent fed to actually perform the fed’s stated mission of doing the right thing for the rest of the country past the elite then all of the actions of the fed are really short term, unsustainable measures which actually WORSEN the economy’s long term prospects. Does this sound familiar? Where have we heard these words so many times before? How about Ron Paul, Peter Schiff, Bob Prechter and every other Austrian Economist on the planet!!
OK, did I get that right Bernanke? Well, let’s first see what the fed’s stated mission really is:
“Today, the Federal Reserve's duties fall into four general areas:
- conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
- supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
- maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
- providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system”
How’s the fed doing?
- Item 1 the fed says that it is supposed to influence credit conditions in pursuit of max employment and stable prices. Well, unemployment is at a multidecade high and home and paper asset prices are swinging wildly so I would say they failed badly at both of these.
- Item 2 say they will supervise and regulate the banks in order to ensure safety and soundness of…. Well I had to stop there due to tears of laughter blurring my vision. The fed is an abject failure at this important goal.
- Item 3 says it will contain systemic risk. Is that like saying “subprime will be contained”. It is another joke, another unkeepable Wimpy Promise made by the Ponzi operator in chief.
- As for item #4, I am certain that before this crash is over they will have failed badly at that goal as well, especially the part about operating the nation’s payment system.
The fed is failing BADLY at 75% of its mission and so now Bernanke thinks its time to blame government. Is government to blame? Of course it is for all the reasons I have written about in the past. But if it were not for fiat currency and fractional reserve banking, both which are policies controlled by the federal reserve, government spending would be held in check by natural market forces. So at the end of the day it really is the federal reserve which is the disease that infects both government and private citizen today. The fed is a disease that we need to kill off by shining the light of day onto. This can only be accomplished with a full accounting of its books and back door deals. Bernanke is an actor, a shameless con man and liar playing a role.
