"How can you trust a man who wears both a belt and suspenders? The man can’t even trust his own pants!"
Posted on 02/26/2013 6:55:17 PM PST by whitedog57
Federal Reserve Chairman Ben Bernanke testified in the US Senate today and here is an excerpt of his testimony and Q&A.
SHELBY: Mr. Chairman… The portfolio or the balance sheet of the Fed, you said it’s $3 trillion, more or less…
BERNANKE: I didn’t say, but yes, that’s about right?
SHELBY: Is that about right?
BERNANKE: Yes, sir.
SHELBY: But you said it then, didn’t you? It’s about $3 trillion.
BERNANKE: Yes, sir.
SHELBY: Is — you studied the Fed a long time before you ever came to the Fed. Has there ever been that type of balance sheet close to that?
BERNANKE: I don’t think so.
SHELBY: Does it concern you not how you put on — add to the balance sheet, but how you might have to deleverage the balance sheet? And will that be a challenge to the Fed or could it be?
BERNANKE: Well, Senator, I should comment that although the Fed hasn’t had a balance sheet this size, other central banks, like the Japanese, for example, have.
SHELBY: And they paid for it, too, hadn’t they?
BERNANKE: Well, depends on your point of view. The current prime minister thinks they haven’t done enough.
SHELBY: What do you think?
BERNANKE: I think that they should try to get rid of deflation. I support their attempts to get rid of deflation. In terms of exiting from our balance sheet, we have put out — a couple of years ago we put out a plan; we have a set of tools. I think we have belts, suspenders — two pairs of suspenders. We have different ways that we can do it.
The Fed’s balance sheet is currently bloated and getting porkier with each month.
But at least the 10 year Treasury rate has fallen pretty consistently since September 1981.
And the 30 year fixed mortgage rate has fallen as well.
I realize that Bernanke felt that he was trying to explain the Fed Balance Sheet in simple terms, but the suspenders analogy was … a little below the belt. Or suspenders.
Rare photo of The Fed … with suspenders.
Suspenders don’t really hold up your pants anymore. They’re just decoration.
Q: Is it true that the deflation is largely caused by debt that cannot be paid, and by assets that are no longer worth their book value?
Q: Should it be the responsibility of taxpayers to bail out the banks (and their stockholders) for bad debt and bad assets on the books of the banks?
Q: To what extent did the Federal Reserve contribute to the dot-com bubble in the 1990's and the real estate mortgage and derivatives bubble of the 2000's through creating centrally-caused, excessively low money costs?
Q: Why should retirees and pensioners have to bear the costs of financial repression induced by Federal Reserve policy to suppress what responsible savers in years past can earn on their savings and investments today?
Q: Why should the "real" economy be forced by central bankers and central planners to bear the burdens of a massively oversized, parasitic financial sector that feeds off of the producers and workers of the United States?
Oi vey ....
Yea but ben, your rear end is still hanging out.
"How can you trust a man who wears both a belt and suspenders? The man can’t even trust his own pants!"
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