On Gilliben's Island, of course.
Where their hero is redistributing the globalist Coco-Nut cream pie one slice at a time...
Posted on 08/26/2009 10:16:53 AM PDT by TigerLikesRooster
The troubling side of Ben Bernanke
He has saved the world but he helped cause the crisis in the first place, writes Ambrose Evans-Pritchard.
By Ambrose Evans-Pritchard
Published: 8:29PM BST 25 Aug 2009
Comments 35 | Comment on this article
Ben Bernanke has proved himself a heroic fire-fighter, saving world from a calamitous spiral into debt deflation by showering markets with liquidity.
A good thing too. He helped cause the raging fire of 2007-2009 in the first place. As a Princeton professor and then a junior Federal Reserve governor, Mr Bernanke was the intellectual architect of his predecessor Alan Greenspan's policies that so distorted global finance and pushed debt to historic extremes.
Indeed, he was picked to join the Fed because he provided academic cover for Greenspan's view that asset bubbles do not matter. He blamed credit excesses on Asia's "saving glut", arguing that reserve accumulation by export nations suppressed global bond yields. That let the Fed off the hook for its own role in driving the US savings rate to zero – and consumption through the roof – by holding interest rates below "Wicksell's Natural Rate".
(Excerpt) Read more at telegraph.co.uk ...
Ping!
He helped save the world?
In what universe do these writers live?
Helicopter Ben and Turbo Tax Timmy will be two agents of downfall in this country and the world (economically speaking).
Yup, just love their methodology. In debt? Spend more.
Yeah! That has a proven track record. This was done previously by ... ah! Ah! Ah! Don’t tell me I’ll remember.
Hey how bout them Martians, did you see the saucer last night? Came to pick somebody up, I guess. Any thoughts?
(Dem/Lib ploy to change the subject. See how good it worked.)
All sides are troubling.
Is there a non-troubling side? I mean, I’m sure he likes dogs and ice cream and stuff, but the man prints dollars like toilet paper.
There are two ways that credit can be liquidated. The first can be by inflation, by increasing the amount of money and credit in existence, so that the value or purchasing power of each unit of money is thereby diminished. A debt of $ 500, which originally would have bought one ounce of gold, is paid off with $ 500 inflated dollars with a purchasing power of 1/100 of the original, of which $ 500 inflated dollars will buy only 1/100th of an ounce of gold. Or the “second way massive debt can be liquidated is through bankruptcy. That is to say, default. A man lent a hundred dollars. The debtor goes broke and says to the man simply, ‘I’m sorry - I can’t pay you back - I don’t have any money’. ... [This] means deflation; that is bankruptcy and depression.”
- Paraphrased and quoted from C. V. Myers, THE COMING DEFLATION
"Reply WalterW
You are right to sense ambivolence. There are so many variables in the global economic and political mix, and cross variables by time sequence, that you cannot take a frozen position.
What is good policy at one moment, can be bad policy months later.
My view essentialy is that fiscal excess is going to bankrupt the OECD club of countries. However, I also think emergency stimulus was necessary in the meltdown over the winter. That was an extremely dangerous moment.
The task now is to right the ship very slowly by lowering debt levesl as a share of GDP over a 25 year period. This has to be paced. Too fast and we tip back into crisis (which makes the fiscal picture even worse), too slow and never get out of this.
The error after LTCM in 1998, and then after the dotcom bust, was to retain stimulus too long. It was a grave error to keep Fed rates at 2pc until June 2004 when the economy was alreay growing fast.
The concern now -- one raised by Bill White -- is that this intertemporal train-wreck has now gone so far that we can no longer keep the game going with lower rates and more stimulus. If so, we are at a watershed moment.
What do we do? I'm darned if I know.
The political forces will dictate the outcome. Society will change the rules. Bond holders may be exproriated. Exchange controls may be imposed. Debts may be monetized. Who knows. This is idle conjecture.
Bill White had a great quote when we spoke. He said there are two main risks:
1) central bank policy "works": we get out of this recession and start another asset boom, perpetuating the cycle of ever greater addiction to artificial stimulus.
2) They fail. The recovery aborts. We realize that we have already hit the end of the road with this strategy. Then we face a globalized Japan for fifteen years or so, or worse.
Which of these two will occur? I am still mulling it over.
ambrose evans-pritchard
on August 26, 2009
at 11:54 AM"
yitbos
What does Helicopter Ben do for recreation?
I realize that Ben and his buddies went to the Tetons for fun and fix’n the economy. Is there another dimension to Ben?
What does Helicopter Ben do for recreation?
I realize that Ben and his buddies went to the Tetons for fun and fix’n the economy. Is there another dimension to Ben?
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