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View Diary: Why what Ben Bernanke said yesterday should make you angry (102 comments)

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  •  Well .... (0+ / 0-)
    What you just heard Ben Bernanke say was, we're not going to do anything until the situation gets worse.
    This should make you angry.
    The Fed has already gone to ridiculous extents to pump up the economy. It has probably gotten to the point where it realizes that it has no way out from the record low interest rates that it has brought about (with the help of QE).

    The FED wants inflation right now. It is not worried about the 2% target, it is scared shitless about DEFLATION.

    Simply put the FED is all but out of ammunition. It can do more QE, but the impact will likely just be to pump up asset prices and commodities (maybe).

    The real problem is a lack of demand ... because consumers and government are up their eyeballs in debt. The Fed can't solve this problem (although it did help create it). Only time and/or debt repudiation will work. The only other alternative is hyper inflation, which would help get rid of the debt too ... but you really don't want to go there ... and you would eventually go there if the Fed kept on using CTRL+P at every opportunity.

    Those who make peaceful revolution impossible will make violent revolution inevitable. - JFK

    by taonow on Fri Jun 08, 2012 at 01:22:38 PM PDT

    •  Actually the Fed can, but hasn't, charge banks for (0+ / 0-)

      their reserves- in effect having NEGATIVE interest rates. That way banks will be more or less forced to lend money. This is not popular enough that they're going to do it, but it is an untried arrow in the Fed's quiver.

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