“We are not printing money” but one wonders where the $600 billion comes from.
Source link: http://archive.mises.org/14915/that-bernanke-interview/
That Bernanke Interview
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What a depressing interview. I admit I don’t know the intellectual history of Bernanke, but I always assumed he was a monetarist neo-classical guy. In this interview he sounds more Keynesian to me.
It was weird. He was “predicting” how unemployment is going to go for the next few years, talking about how easy it is to control inflation through interest rates, giving strange commentary on the tax code and the deficit, and on top of that is straight out lying about the increases in the money supply. All in all, he was either contradictory or just wrong.
Maybe I’m reading too much into this, but when talking about the future, he seems unconfident throughout the entire piece. Strangely, it looked to me like the interview segments were heavily edited. (To make him look better, I suppose.)
Then what they cut out must look pretty bad. He has that sleepy, drugged look I’ve commented on before. His upper lip is twitching and his voice is quavering. Yet he claims he has “100 percent confidence” in his ability to control the economy. Maybe someone from CBS will be kind enough to fire the raw footage at wikileaks?
The actual content of his statements is the kind of meaningless baloney that shallow, ambitious climbers up the corporate ladder come out with – on the order of “we have to work smarter not harder” and “solve the small problems before they become big problems”. The interview sounds more like a scripted infomercial (which of course it was – what a bunch of puzzy questions. as if they never heard of Ron Paul).
Bernanke must be aghast that instead of providing “growth”, every new dollar he prints quickly disappears into bank reserves, into welfare payments, into the pentagon, or into the trade deficit after which it gets repatriated into the Fed by foreigners who think that gold will be better in the long run.
All this nervousness and twitching in an environment with only softballs thrown at him and on a stage where his handlers (inc. CBS news) have complete control. One day, the politicians will have a field day with him, Paulson, Geithner, etc., but not yet. The economy will have to get much worse (which it must). Only when the politicians find it necessary to deflect anger in order to attempt to save their own political skin. Other than for show, it won’t matter much. But what a glorious show it will be!
Imagine his nervousness then.
Imagine his nervousness then.
I sooooooo can’t wait until January.
http://www.charlotteconservative.com/index.php/2010/11/ron-paul-to-be-appointed-committee-chair-overseeing-federal-reserve/
No, not just Ron Paul. I mean political leadership, on a witch hunt. It won’t be January, it will be when the whole thing comes off the rails.
Bernanke has been wrong thus far.
Money is dominated by government and the U.S. Constitution forbade such monopoly. The educated Americans let this happened. Too much education got us here, intelligentsia at its best.
No, no, you don’t understand. He’s simply exchanging reserves for securities. That’s all. It’s just an exchange!!!!
The worst aspect of this interview with Bernanke is his pathological lying. Void of ethics there is no heinous act that he will not commit to try to keep the house of cards from collapsing. He and those like him are like cornered beasts, dangerous and vicious.
To me the worst part was when someone with a 100% failure rate of prediction says that the long term prospects of the USA look bright, that scares the crap out of me.
By the very fact that the stock markets around the world hang on his every word did you honestly expect anything less?
Bernanke 9:25 “What we’re looking at is 10, 15, 20 years from now… where almost the entire federal budget will be spent on medicare, medicaid, social security and interest on the debt.”
I, too, was shocked at how negative he was – I was almost encouraged by his frankness.
Well, at least he left out WAR!!!
And if the money supply hasn’t grown, Ben, show us the M3 data.
The money supply has grown, even though Bernanke is paying interest of reserves (paying banks not to lend), which is preventing the monetary aggregates from exploding (due to the fact that the FED has increased the monetary base by 300%).
That rachitic 60 Minutes reporter said that Bernanke wanted to do the interview because Bernanke claims his critics do not understand how serious the situation is. Are you f#@#ing kidding me? This is one of the most hateful rhetorical tricks, seizing the high ground while simultaneously structuring the dialectical boundaries to preclude the real substance in the opposition.
Quick survey. Which persona did Bernanke exhibit more of?
A. arrogant, cold-blooded, morally vacant serial killer
B. techno-pietist
C. corrupt bureaucrat
D. This question is ancillary, one for the historians. It only matters what he does– which will serve as evidence enough for hanging.
E. All the above
F. All the above and then some
G. Torch and Pitchfork Time
And you’re angry why????
(sarcasm alert)
I am not angry!!?? Oh, wait.
“we can raise interest rates in 15 minutes if we want to”
well there you go, Ben…….
Besides the fact that he is outright lying about expanding the physical money supply, one of the marvels of modern banking is that expansion of credit can simply be done through digital accounting.
On the topic of structuring the dialectical boundaries, it seems disingenuousness to label the opponents of the Fed as targeting its “independence”. Are there really people out there calling for fed policy to be determined by political whims? as if it isn’t already… the “independence” debate is based on a baloney straw-man, because if the media focused on the real Fed opposition an even larger chunk of the population might want to End the Fed.
I’d really like to sit down with Bernanke and see what he thought about interest rates and market coordination, how can they not see that messing with them causes distortions?!?!
Can you almost predict Bernanke’s answers? On interest rates, some ‘price level aggregate stability blah blah blah’. On coordination, “It is the fed’s job to make sure that coordination is maximized through blah blah blah…” Serious, if you ever got an interview with Bernanke I would pay you to punch him in the face. Or, let’s be hopeful about the future like Bernanke and assume the interview would be conducted on death row with prisoner #…., aka Bejamin Bernanke.
Are you sure there might not be some good left in him? He’s an academic, and while I deal with professors who are impenetrable, I always figure with more time and explanation, the logic and explanatory power of austrian theory could break through. Rather than punch or execute him, why not be a little nicer, and just kidnap the guy, and give him an in depth intensive week of study at the Mises Institute? Rather than solitary, with ear bleeding house music, it could be solitary with the sonorous voice of Jeff Riggenbach! How long would it take to break him?
Okay. I can laugh and be angry at the same time! I will give you one week at Mises to re-educate Bernanke. If successful, he will get life in prison instead of execution. One week. That’s all.
(Or we execute him– a lost cause, most likely anyway- and bring up his children in the Austrian way.)
The Fed is not buying securities with reserves. They are creating new dollars to buy securities which increases the reserves of the banks. This new money flows into the economy through lending, stock purchases, commodities extc. Or they park it at the Fed and earn interest.
Ben Bernanke Versus Peter Schiff – Round One!
First listen to the fragile-minded Bernanke blabber on about how baffled he is about the economy and how he thinks more of the same is the best approach.
Then listen to Peter Schiff explain what is really going on in the market ( http://www.youtube.com/watch?v=f18JIVk8hBw&feature=player_embedded ) and how idiotic are the schemes of the the economic numbskulls like Bernanke.
And the winner is . . . Peter Schiff!!!
2 unexpected statements scared me. (I was expecting everything else.):
1. he said that our education system is the primary cause for loss of a middle class, and the huge gap between rich and poor. (in fact, it is fed policy that kills the middle class – along with tax and spend policy. our education system actually helps the middle class.)
2. he said that we could go the way of greece and ireland if we don’t plan ahead properly. hearing this coming from him was sobering, that he thinks it is quite possible. (we aren’t, can’t, and haven’t been planning ahead either.)
oh, and the part about not printing money! definitely intentionally misleading. no one is talking about increased currency in circulation, we’re talking about it in whatever form you produce it (out of nothing) usually just electronically.
this interview, like his last one, was absolutely initiated by the fed. it was obvious that he knew what the questions were going to be, and came prepared. and i’m sure the fed told them what they wouldn’t answer as well.
You’ll notice that there’s no real “debate” between Austrianism vs. Keynesianism, as such. A couple of websites that have Keynesian viewpoints have comments turned on, in which the writers’ assertions are tackled point-by-point by Austrians, but there is never any structured, coherent reply by the Keynesians in which the Austrian criticisms are addressed. The most you will ever see are Krugman’s infantile straw-man mischaracterizations of ABCT, which he won’t even call by its name, evidently for fear of calling attention to its actual writings. The comments that some people add here at mises.org contain more honest and coherent Keynesian counter-arguments to Austrian theory than I think I’ve seen anywhere else on blogs or mainstream media sites. Not that I agree with the non-Austrian viewpoint, but at least these commenters will address what Austrians have actually written (even if it was an obscure quote in Rothbard or Hayek from 40 to 60 years ago) rather than writing crassly dishonest smear jobs or pretending that the basic axioms of human behavior are invalidated by the equations they wrote for their PhD thesis.
As for the media that the average victim of the Greater Depression will consume, there is nothing. No debate. The Ben Bernank can be “interviewed” on one of the most-watched news shows – one that allegedly specializes in “investigative journalism” and can prattle on without ever having to acknowledge that there is any serious disagreement in the world of economics over the existence, goals and methods of the Federal Reserve. A little bit of “safe” Hayek can be introduced in the more hoity-toity and less widely read journals, probably because he allowed a wide latitude to statism in some of his writing. Even more rarely Rothbard may be mentioned, but as a kind of boogey man, an example of the kind of foaming-mad anarchist that reading Hayek will turn you into (if you don’t go blind first).
I suspect that discussions within the Roman Catholic Church leadership and between leaders and churchgoers concerning astronomy, around the time of Galileo, had a very strong resemblance to what passes for economic debate in 2010.
Scott Pelley: “Chairmen of the Federal Reserve rarely do interviews…”
Unless they are with a rather dumb talking head who has the same “Progressive” world view as Bernanke’s boss Obama, one who will allow the interview and all of the questions to be controlled and edited by the Fed’s staff, who humbly accepts being prevented from asking even one challenging question for which Bernanke hasn’t prepped even if he could think of one, and who will adopt an air of a courtier grovelling in the presence of the king.
If only the cameras could have been turned on while Scott Pelley was on his knees…
Wow!
Things really are seriously awry with that funny bewhiskered chappie. Something odd with him- can’t quite figure out what it is.
When I started out in my first job, the Chief Engineer had sayings he was prone to muttering. A favourite was, “Never trust a man with facial hair!” It was worth a laugh at the time. Not quite so funny after seeing this.
Sione
Actually, Bernanke’s claim that they’re not adding to the real money supply is spot-on.
The problem is that so many Rothbardians, unlike real Austrians, don’t understand monetary theory.
The problem the US is suffering right now (thanks, in part, to the Fed) is that we have very low money velocity. As Hayek noted, this is not only deflationary, ergo harmful, but can be a vicious circle.
REAL money supply (do a search on that phrase…”real money supply”) is Quantity time Velocity. The Fed is — temporarily — increasing the quantity of money in response to a dramatic decline in the movement of money. They are trying to make this average out to a steady money supply, but in fact they have found themselves unable to do so.
As I mentioned in passing above, the Fed is also not creating real, permanent money. They are lending money — normally overnight, but recently for up to 90 days — that later becomes due, at which point they usually destroy it (in the same sense that they “created” it).
This is even more true of the Quantitative Easing, which Bernanke (being a bureaucrat) has renamed Credit Easing, because Japanese QE has already been proven useless.
The Fed’s buying of notes and bonds is adding temporary money to the economy…but the Fed has been explicit on its plan, when the economy seems to be recovering, to then SELL those financial instruments, probably at a “profit”, destroying the money paid for them.
Now the Fed is bad. This is not a defense of that monopoly…especially not of Bernanke, who is most certainly a Keynesian:
The Fed will attempt to start destroying this extra money “within fifteen minutes” of realizing we finally are back to 2% inflation…but there is up to an 18 month lag between the Fed’s actions, and obvious effects in the economy. This means they’ll start destroying the money over a year too late, and we WILL end up with unpleasant inflation…and then, as they frantically overcorrect, 18 months later we’ll end up in a recession caused by their being TOO tight.
This is the modern business cycle, which isn’t as bad as the business cycle of 1873-1933, but is still harmful and needless.
We need a free market in money, as a replacement for the Fed.
Here’s a more detailed analysis of Bernanke’s comments, applying actual understanding of monetary theory and the facts of the Fed’s activities:
http://butnowyouknow.wordpress.com/2010/12/09/what-bernanke-means-qe2-will-not-boost-money-supply/
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