Wednesday, February 10, 2010
More trouble ahead...
Bernanke outlines plan for pulling in stimulus aid
Federal Reserve Chairman Ben Bernanke began Wednesday to outline the central bank's strategy for reeling in stimulus money once the U.S. economic recovery is more firmly rooted...
This is why Bernanke should not have been reappointed. His remarks are ridiculous.
Bernanke still thinks there is some direct transition mechanisim from reserves to loans? The data shows clearly that despite the Fed's unprecedented level of reserves that total loans outstanding have collapsed! (See chart.)
Reserves are up something like 15,000% in the past year and a half and loans have gone down nearly $800 billion!
He's allowed inflation hawks and deficit terrorists to convince him that we need higher rates.
The main asset of households--their homes--are falling in value and 15 million people have lost their jobs. Meanwhile, gold, stocks, commodities are falling and the dollar is going up and they're still talking about inflation.