Posted on 02/25/2009 12:03:09 PM PST by zek157
Ben Bernanke said on Wednesday that he had an exit strategy from the U.S. central bank's recent massive monetary expansion that will keep inflation under control as the economy recovers.
As he had on Tuesday, Bernanke also told lawmakers he saw no need for the United States to nationalize banks, and he lifted Wall Street shares after he assured there was no plan for the government take over Citigroup.
A severe U.S. recession has brought price pressures sharply to heel and the Fed chief said that inflation would not be a problem for the next couple of years, but would be confronted when the time came and economic growth picked back up.
"We are quite confident that we can raise interest rates, reduce the money supply and do that all in a timely way to avoid any inflationary consequences," Bernanke told the House of Representatives Financial Services Committee in a second day of testimony on the Fed's monetary policy report.
The Fed has cut benchmark overnight interest rates almost to zero and has pumped over $1 trillion into credit markets to keep them functioning after the collapse of the U.S. housing market sparked a global credit crisis last year.
Bernanke defended the Fed's aggressive actions, and said steps taken by the U.S. central bank and others last fall averted what could have been a "global financial meltdown."
"I do quite seriously believe we avoided in mid-October ... a collapse of the global financial system which would have led us into a truly deep and very protracted economic crisis," he said.
The Fed chairman acknowledged that at some point economic growth would begin to take up the economy's slack, and said that would mean reversing policy to prevent the enormous increase in the U.S. money supply from creating inflation.
(Excerpt) Read more at finance.yahoo.com ...
Hey where was he in Oct. when we needed him, Oh that’s right, helping the democrats win!
More utter nonsense from Helicopter Ben in a desperate plea to stop the market from tanking. What’s he gonna do? Come out every day with some pie-in-the-sky prediction?
Yeah, sure, Ben. Inflation won’t be a problem no matter how much money we print. Yeah, sure, you’ll be able to raise interest rates, because economic growth won’t be in the crapper after cap-and-trade and card check and national health care and the Bush tax cuts expire...suuuuure.
I mean, with a rosy outlook like that, it’s silly that we’re even having this crazy recession now and we’ll definitely be out of it for sure by the end of the year and at that point, we’ll just raise interest rates to keep inflation from becoming a problem.
Seems like Obama’s ‘stimulus’ plan isn’t the only thing that’s shovel ready...
Stephenopolous was quoted yesterday as saying 'the success or failure of Obama's plan will be determined this time next year if signs of recovery are present'. The media has ONE YEAR to convince a majority that things are even slightly better this time next year.
I've heard of setting the bar low, but thats ridiculous. I'm afraid we are going to be had by the democrat/media complex.
Ben, you're going to exhume the body of Ronald Reagan and have the capability to clone him before the end of March and replace the "Messiah" with a Reagan?
Or are you just a fast talkin' two faced worthless liberal POS with a podium?
History will come to call the coming inflationary level as “Obama Level” hyperinflation.
This from the elite intellectual who didn’t know what a 1099 was.
It's called massive taxation.
A fascist state like Obama's does not need to nationalize the banks to socialize them. The banks will simply do whatever the Obama-fuhrer tells them to do, with the backing of the socialist-Dem congress.
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