Fed Chairman Ben Bernanke gives a rare interview to Scott Pelley in which he discusses pressing economic issues, including unemployment, the deficit and the Fed's controversial $600 billion U.S. Treasury Bill purchase.
Chris: He may be smart, most of them are, but the story the public gets is aimed to create an emotional response. Hate to be a cynic but having read a fair amount on the subject it is hard not to believe the whole economic armageddon was smoke and mirrors to save the banks and the security and bond holders. Read Killing the Host by Michael Hudson, also The Big Short by Michael Lewis for some of the gory details of the shenanigans the bankers pulled. Lewis goes easy on laying blame but the crisis chapter in Hudson's book more than makes up for it. Also suggest watching the documentary Princes of the Yen, there are some striking similarities what happened in Japan in the 1990's. Having a good understanding of how money in the economy is created, allocated and destroyed is also extremely useful for this topic and in general.
Real Unemployment rate is 22.4 percent on January 17, 2012 look it up on shadow stats...by the end of this year 2012, the US deficit will be over 17 trillion does anyone believe that?
While we all like to think that we know what's best for the country and the economy, at a more fundamental level we are all thankful when we can put food on the table. I believe the fed and Bernanke are doing their best to help us have jobs now and in the Long term
I give props to Bernanke for doing this interview. He looked like he was near having a heart attack! Did anyone see his lip quivering the whole time? I think his 600 billion bailout was genius, best move. BUT I'm really frowning at his response to the last question for part 1: "what do you think the reason for inequality in America?"...."education" ...This is completely not the case. If anything we have an OVER supply of credentials in our nation. This, combined with off shoring of jobs have wreaked havoc on the divide from top to bottom. Not to mention the big elephant in the room.....CEO pay
In 2010: 600 billion will potentially cause mass inflation In 2022: 3 trillion in QE is all transitory inflation. And will not have any long term effect
Agreed, Bernanke is actually doing his job very well in the eyes of scholars. People just dont understand the Fed because they believe in the gold standard. The Gold Standard was dropped because of many reasons, one because of deflation & the increase of wealth int he world & 2 because any country that is on the gold standard will affect other countries on the gold standard also. The rise of oil in my opinion is because China and India are in need of oil. Increase in Demand = Increase in price!
Ok, I just finished the interview... I hate to say it, Bernake was actually fairly honest. Which is surprising. He admits that the regulatory system was weak (not entirely his fault, mostly Hank Paulson, Alan Greenspan, and Larry Summers.) He also identifies the sub-prime lending problem and is sadly also correct about how if the Fed hadn't acted in the wake of the financial crises, the national unemployment rate could have reached up to 25%. His job is unpopular, but at least he's smart.
Fair point, many of Ron Paul supporters don't understand the argument for expansionary monetary policy. I respect Krugman, Bernanke, etc. I'm no PhD, but I am afraid QE3 is not fail proof by any means. We expect banks to lend out to an economy that has 250% private debt to gdp. I do think there will be short term gains in unemployment, but I think it's just a short term solution to a larger issue, we need deleveraging, not more spending. I do think Austrians are making more sense right now.
Chairman of the Federal Reserve: Benjamin Bernanke >- Annual Base Salary: $199,700 >- Maximum Job Length: 14-28 years >- Previous Job: Professor of Economics at Princeton HA_HAHA
Furthermore, in the long run, monetary policy has no impact on output. It's what is called "monetary neutrality". While high levels of inflation (see 1970s, or Zimbabwe for example) can negatively impact output in the long-run by introducing large quantities of uncertainty, the low level of inflation we have now (1.4%) is negligible. Prices may rise in the short-run, but in the long-run wages will adjust to these higher prices.
I understand the market operation process,but the main money supply representation the fed focus on is M1. We know M1 as the total money supply outstanding + deposits. M2 is M1 plus any CDs under 100k in value. They still order the treasury to print dollars when they need it,right? It sounds like you're saying the Fed doesn't order the printing of dollars anymore. I agree with you though, if I knew what Ben knew about the economy ,I would be rich already.I wish I knew more.
I don't blame Bernanke for the economy. His predecessor should take a hell of a lot of responsibility for keeping interest rates at all time lows for years.
Regardless of what one thinks about the Federal Reserve, it is difficult to imagine a better chairman than Mr. Bernanke at this time in history. In a speech on Milton Friedman's 90th birthday, Bernanke said, "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
THERE IS NO INFLATION! * Pork is trading at 104 a pound, up 23% in the last year. * Beef is trading at 106 a pound, up 28% in the last year. * Cotton is trading at 130 per pound, up 78% in the last year. * Sugar is trading at 29 per pound, up 32% in the last year. * Coffee is trading at 205 per pound, up 40% in the last year.
it was the tariff that killed us. The gov was hoping the tariff would encourage us to buy american, but other countries retaliated by posting higher tariff on us. We couldn't sell out product to the rest of the world and there goes the great depression
Newt on Ben Bernanke “I’d fire him tomorrow. I think he’s been the most inflationary, dangerous and power-centered chairman of the Fed in the history of the Fed. I think his policies have deepened the depression, lengthened the problems, increased the cost of gasoline and been a disaster.”
It's ironic that a lot of you calling for an end to the Fed have no idea about the actual functions of the Fed, and much less of the immense complexity of the economy. Yes, we need a Federal Reserve. It was created to ensure financial stability. Perhaps you all should look at the number of financial crises we had BEFORE the implementation of a Federal Reserve and compare them to the number we've had today. Some of you are clueless. It's why ECO classes should be a requirement for all.
@LobFest Thanks for your post. You helped me to better understand how capital is created out of thin air, and NOT by actually printing currency. Best of luck to you, and Thank You !!
@rosiertodd The chairman was referring to inflation in recent years, not for the period of time you're referring to. Also, you're only looking at one side of the story, wages have also risen with the devalued dollar.
Even though this is obvious PR, I still will give him credit for doing this(an/any)interview. The nervousness that he shows i think is because of the camera, and not that he is a bad person. I dislike the Fed and the system that it represents....But, looking past all that, I do have a tinny bit more respect for Ben himself. well then I guess the video accomplished it s goal.
Oh yeah, cut the deficit. But please, just not this year. I've heard that for decades! You better change your paper dollars for real money (silver / gold).
THERE IN NO INFLATION! * Oil is at $89 a barrel, up 21% in the last year. * Gold is trading at $1,413, up 23% in the last year. * Silver is trading at $30, up 66% in the last year. * Copper is trading at 4 per pound, up 26% in the last year. * Corn is trading at 573 a bushel, up 49% in the last year. * Soybeans are trading at 1,300 a bushel, up 23% in the last year. * Wheat is trading at 779 a bushel, up 41% in the last year.
I certainly can't disagree with that statement. I also think that if people picked up a book on Economics they would also never see any national or global news the same again. Which form of education would be better?
Great to see so many dislikes, only shows so many people fail to understand what this guy is talking about. Well, it is not strange... So many people never saw the crisis coming in first place. Notice how concerned Bernanke gets when talking about "long durations of unemployment and decay of skills". Because wealth creation (e.x. getting people skilled to meet society's/earth's needs ) is so important over wealth manipulation(banking etc.). Although both systems are required.
Never saw the crises coming in the first place? You're a fucking idiot if you didn't see this coming! 0 percent overnight interest rates and you didn't SEE THIS COMING??? Here I guess Ron Paul must have been the only guy to see it coming than right??? Or any other libertarian for that sake! Fuckin idiot
He said they are not printing money, but just purchasing assets. How does one purchase something without money?? In reality they have printed 3.3 trillions of dollars to keep their toxic wheel turning and will keep printing money in the future until their debt bubble economy implodes.
A man who political historical heritage thru hegemony has seen a many a moon. Poignant distinctions on economized stability which has derived from faustion tradition is most enlightening.
So where you said it has risen 8.9% includes Food and Energy? That's a horrible amount of inflation. What is your point? How is Bernanke doing a good job if inflation has risen so much? What do you blame the rising prices on then?
Was talking about the reserve requirement which the fed sets in percentages. If I told you you had to keep 25% of your interest based deposits on hand and you didn't have that on hand you'd have to get more from the fed. The Fed sets that percentage (like 5% or something). So they set how much money banks need. As far as bubbles such as housing bubble they set that for short term and encourage lending. The Feds relaxed interest policy opened the door for risky lending, leading to the bubble.
Bernanke is a genius with QE stimulus programs. He knows the system is seriously messed up, so basically told investors to put their money in stocks because the FED wont allow the stock market bubble to burst. QE Infinity= Bull Market !! Bernanke is out of dodge at the end of January because he does not want to be responsible whenever the bubble does burst and we are in global depression.
So if it's not creating money that causes the problem, then why are prices still going up? Especially with the price of gasoline, the average of gas is almost at $4/gallon and it will continue to rise. :(
The Fed has failed to prevent any economic crisis since 1913? How would you know? You're only looking at economic crises and saying "hey the Fed failed to stop this one", which is a self-fulfilling analysis. The Fed doesn't promote inflation; it promotes price stability.
What he says makes sense. When the economy is bad the Fed is suppose to lower interest rate so the Businesses and Consumers can get low interest loans to increase consumption and investment spending. An increase in Consumption and Investment spending = increase in GDP. This shifts the Aggregated demand curve to the right, thus increaseing Real GDP. Those of you that disagree with me, take some economics courses in college, it does make sense.
At 6 minutes, Ben says he isn't printing money but somehow QE2 will keep interest rates down. Is this a Bill Clinton moment ("I did not...with that woman")? I understand that the Treasury actually applies ink to paper when it comes to "printing" bills but I think it is a bit of misdirection to say that these types of money creating operations will have no impact on the money supply. If there is one thing we have learned from the Financial Crisis...credit creation matters.
It's the classic misunderstanding of "Supply & Demand". Flooding the market with paper money isn't going to increase the "demand", it only gives more money to people to by the same amount of goods. As long as there are people there will always be demands. If you want to reach a higher demand, then you need to increase your supply which is done through expanding production. If you look at America right now, it's the opposite, everything is being cut. If you think this guy makes sense you're nuts
Deflation leads to lower prices, which leads to lower wages, which leads to decreasing level of employment, output and income. Both Inflation & Deflation are bad, but deflation is hard to recover from. Thats why during the Great Depression, it was so hard to recover from it because Gold Standard held down the money supply. The reason why we recovered from the Great Reccession was fairly quick compared to the Depression was because the Fed can control interest rates and money supply.
The Fed prints dollars. Those printed dollars, the physical money, the paper ones are only a marginal amount of the money in circulation. How about every single bank that loans people money (creating credit out of nothing on the spot)?
@jaguarclaw That is THE question !! I do not have all the political and/or economic suave that others here do. However, let me use this scenario : You hire a painter to paint your bedroom. Upon completion, the job looks like crap. Even though you cannot paint worth a lick, (which is why you called a "pro") you can still recognize the crappy job you got. My point, although not as politically/economically suave as others, I can see Bernanke is NOT painting a pretty picture.
@xac33 .. I purchased gold/silver 2 years ago.. I am in the process of selling it right now.. before the 20 million expected home foreclosers kill the prices again.. I agree w/you but I also think that this depression is at least 75% on consumerism.. How could it have even happened if no one took the loans..? (especially the MILLIONS!! that never saved, spent every single penny earned & available on credit..)
As you say it's an "overall" estimation of inflation. So how can you exclude energy and food in this "overall" estimation? You can't. So OVERALL looking at inflation there is a CLEAR increase. Majorly. Also, just fyi, the United States this year is making more domestic energy than it has ever made. We now only import roughly 36% versus 65% in 2005.
fed lowering interst rate, can you explain to me WHY the fed had to lower interest rates in the first place? they did it for good reason. but unfortunately that's their only weapon, and the idiot private sector used that opportunity to speculate instead of using it on better means. Private sector need to take responsibility on their behavior.
But Reagan also signed one of the largest tax increase because he knew the national debt was becoming a problem. In my eyes thats what separates Reagan from many Republicans. Many Republicans believe that its tax cut all the way, but tax cut is only a temporary policy, permanent tax cut = large budget deficit. Clinton raised taxes but that also didnt slow the economy (mostly because of the dotcom bubble). I agree the wealthy should get no tax cut, but i do believe they should have a lower rate.
it was said in this report that some of the beneficiaries of the bailout money included JP Morgan Goldman Sachs Foreign Central banks. If they needed the money why were their stocks prices some of the highest in the stock market. The central bank of this country should not be engaged in the bailouts of private companies and other central banks, case closed
Before deregulation of safety net laws in 1985 under the reagan administration, economics were't nearly as complicated as they are now. The concept of Collateral Debt Obligations comprised of Mortgage, Car Insurance, and Health Insurance information never existed. The concept of selling this information known as CDOs for profit to other financial corps and grading it with investment ratings ranging from CCC-AAA never existed either The increase in complexity has lead to the corruption we see now
Redistribution of wealth (raise taxes on the rich and borrow a great deal of cash), investing in infrastructure and war spending got us out of the Great Depression.
dont you think that Bernanke is creating a disastor of inflation? i suggest you take a look at Alan Meltzer and what he has to say about the fed before you point fingers at those who are ignorant.
Okay, and so why is the value of the dollar going down then? Pretty soon, it's going to be useless and our country will collapse. This is why we need a gold standard to come back.
if falling prices is the problem then Walmart must be the enemy. can't have it both ways. our prices are inflated with your interest/income tax paychecks, Ben. they need to come down.
@chiriquiTV "Old Gringo" First, I thank you for not attacking me with harsh words. I'm not the brightest bulb in the box, but I'm not the dimmest either. Your point is well taken. I guess the vids of the printing presses pouring out sheets of currency were merely an "example" of how capital is created out of thin air. More at Reserve creation, adding 0's to their accounts is one way it's done. ( ty LobFest you helped me understand this one). You are right, the future doesn't look too well.....
Wow, you can tell he is scared out of his mind. And it's not because he nervous on camera. He makes public appearances and speeches all the time and he very comfortable with that. He thinks the U.S. economy and the Fed is screwed and he knows he's just buying time.
at 12:01 he relaxes a bit because he's finally speaking a bit of truth. but the situation he describes is still coming, he's just trying to delay it as long as possible and hope that some economic miracle saves them
Why are your eyes so cold, why do I get this chill down my spine when I see you talking. Why are your words so certain, why do I get a pain when you are asserting. Why are you not telling us the truth and what are you hiding? Why are your eyes so cold, why do I get this chill down my spine when I see you talking.
"The last duty of a central banker is to tell the public the truth." Alan Blinder, Vice Chairman of the Federal Reserve, on PBS's Nightly Business Report in 1994. You have to understand that the often empty words of Central Bankers serve as a contrary indicator , so plan accordingly.
How is it that an individual investor like myself, and a handful of other people were able to see the recession coming, but the Chairman of The Federal Reserve wasn't able to see it? If you really want to see a true representation of why the economy failed, watch the PBS Frontline's "The Warning".
GDP can be manipulated, all the fed doing right now is QE, so pretty much we are spending borrowed money, so it creates an illusion that our economy is recovering
Horrible reporting, I haven't seen this many softball questions since a Larry King interview. Why not have Jim Grant or Peter Schiff at least counter this nonsense?
Bernake's explanation for why we're not investing in small businesses? "We have to balance the risk." Right, because when banks leverage themselves often times up to 42:1 with figures in the BILLIONS (!!) in investments on faulty mortgage debts, that's capitalism just as the founding fathers would have wanted. But investing in small businesses with maybe a 5 figure debt? That's just too risky...
a case in point on this comment section is that the angry and unintelligent responses most likely came from the people that are uneducated. we need to be more educated so we can make better decisions for ourselves and for others.
the u.s. couldn't get out of depression was because hoover and roosevelt's interventionoist policies into our economy. The depression ended when the war ended, massive spending cuts, tax cuts and of course helped by the destruction of japan and europe's economy. that's the whole point behind gold standard, money is suppose to be rare, not as a mean to inflate for political purposes
He's not an trained public speaker, but he sounds very studied, as though he knows exactly what he's doing. Note though that he spoke exactly the same way when he denied that there would be any bubble burst or economic collapse in the years before it happened. Check out the "Bernanke is wrong 2006 2007 2008" video. That's what scares me.
"We're not printing money, we're just buying treasuries"!? The Fed prints money to buy treasuries - that's how they make purchases!
I don't think that the new chairman is qualified like Bernanke.
How do you feel like Jerome did?
Ben Bernanke is a smart man, people shit on him, but he did the best he could and helped us recover quickly
you're an idiot
someone shat down your neck and tightened a rubber band around your neck when they were done
I think they just removed the rubber band.
Derek Crumplesnatch nice you fucking nazi
Chris: He may be smart, most of them are, but the story the public gets is aimed to create an emotional response. Hate to be a cynic but having read a fair amount on the subject it is hard not to believe the whole economic armageddon was smoke and mirrors to save the banks and the security and bond holders. Read Killing the Host by Michael Hudson, also The Big Short by Michael Lewis for some of the gory details of the shenanigans the bankers pulled. Lewis goes easy on laying blame but the crisis chapter in Hudson's book more than makes up for it. Also suggest watching the documentary Princes of the Yen, there are some striking similarities what happened in Japan in the 1990's. Having a good understanding of how money in the economy is created, allocated and destroyed is also extremely useful for this topic and in general.
Real Unemployment rate is 22.4 percent on January 17, 2012 look it up on shadow stats...by the end of this year 2012, the US deficit will be over 17 trillion does anyone believe that?
How do you feel now?
To satisfy the world's sanitation and food requirements would cost only US$13 billion- what the U.S. and Europe spend on perfume each year.
Not Bernanke
And now, what's the FED's exit strategy? No wonder Big Ben's skipping town in 2014, the FED's backed into a corner and he knows it.
Exit strat was to print more money! 80% of current USD has been printed in 2 years
While we all like to think that we know what's best for the country and the economy, at a more fundamental level we are all thankful when we can put food on the table. I believe the fed and Bernanke are doing their best to help us have jobs now and in the Long term
I give props to Bernanke for doing this interview. He looked like he was near having a heart attack! Did anyone see his lip quivering the whole time? I think his 600 billion bailout was genius, best move. BUT I'm really frowning at his response to the last question for part 1: "what do you think the reason for inequality in America?"...."education" ...This is completely not the case. If anything we have an OVER supply of credentials in our nation. This, combined with off shoring of jobs have wreaked havoc on the divide from top to bottom. Not to mention the big elephant in the room.....CEO pay
what did you think was the reason for inequality in America? If you ever read this..
In 2010: 600 billion will potentially cause mass inflation
In 2022: 3 trillion in QE is all transitory inflation. And will not have any long term effect
Agreed, Bernanke is actually doing his job very well in the eyes of scholars. People just dont understand the Fed because they believe in the gold standard. The Gold Standard was dropped because of many reasons, one because of deflation & the increase of wealth int he world & 2 because any country that is on the gold standard will affect other countries on the gold standard also. The rise of oil in my opinion is because China and India are in need of oil. Increase in Demand = Increase in price!
Ok, I just finished the interview... I hate to say it, Bernake was actually fairly honest. Which is surprising. He admits that the regulatory system was weak (not entirely his fault, mostly Hank Paulson, Alan Greenspan, and Larry Summers.) He also identifies the sub-prime lending problem and is sadly also correct about how if the Fed hadn't acted in the wake of the financial crises, the national unemployment rate could have reached up to 25%. His job is unpopular, but at least he's smart.
Fair point, many of Ron Paul supporters don't understand the argument for expansionary monetary policy. I respect Krugman, Bernanke, etc. I'm no PhD, but I am afraid QE3 is not fail proof by any means. We expect banks to lend out to an economy that has 250% private debt to gdp. I do think there will be short term gains in unemployment, but I think it's just a short term solution to a larger issue, we need deleveraging, not more spending. I do think Austrians are making more sense right now.
cut the federal spendings! the econemy havent been worse since the 30's yet the fed spends more money than ever
There IS no recovery.
Welcome to QE
guys. Ben Bernanke saves the U.S. from going into complete meltdown. Please stop insulting him!
@delta9999
That is not an issue at all.. It's called quantitative easing and vital to our recovery.
i see the burnanke is finally telling the truth. i applaud him /s
People need to stop crucifying Bernanke. He's done a pretty good job preventing a fincancial meltdown.
Chairman of the Federal Reserve: Benjamin Bernanke
>- Annual Base Salary: $199,700
>- Maximum Job Length: 14-28 years
>- Previous Job: Professor of Economics at Princeton
HA_HAHA
Furthermore, in the long run, monetary policy has no impact on output. It's what is called "monetary neutrality". While high levels of inflation (see 1970s, or Zimbabwe for example) can negatively impact output in the long-run by introducing large quantities of uncertainty, the low level of inflation we have now (1.4%) is negligible. Prices may rise in the short-run, but in the long-run wages will adjust to these higher prices.
I understand the market operation process,but the main money supply representation the fed focus on is M1. We know M1 as the total money supply outstanding + deposits. M2 is M1 plus any CDs under 100k in value. They still order the treasury to print dollars when they need it,right? It sounds like you're saying the Fed doesn't order the printing of dollars anymore. I agree with you though, if I knew what Ben knew about the economy ,I would be rich already.I wish I knew more.
I don't blame Bernanke for the economy. His predecessor should take a hell of a lot of responsibility for keeping interest rates at all time lows for years.
Factually correct, you can't fight people who are into sensationalism. It's the pathway of least resistance to stay ignorant.
Thank You
QE3 lost me 41.181% over 4 years in dollar value, but my 2oz silver nugget well over doubled over that time...Hmmmm
i don't care what they say, ben bernanke is a good guy
The recession is over and we are now in a depression.
Regardless of what one thinks about the Federal Reserve, it is difficult to imagine a better chairman than Mr. Bernanke at this time in history.
In a speech on Milton Friedman's 90th birthday, Bernanke said, "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."
Any minute I thought he would burst into tears.
THERE IS NO INFLATION!
* Pork is trading at 104 a pound, up 23% in the last year.
* Beef is trading at 106 a pound, up 28% in the last year.
* Cotton is trading at 130 per pound, up 78% in the last year.
* Sugar is trading at 29 per pound, up 32% in the last year.
* Coffee is trading at 205 per pound, up 40% in the last year.
it was the tariff that killed us. The gov was hoping the tariff would encourage us to buy american, but other countries retaliated by posting higher tariff on us. We couldn't sell out product to the rest of the world and there goes the great depression
Newt on Ben Bernanke “I’d fire him tomorrow. I think he’s been the most inflationary, dangerous and power-centered chairman of the Fed in the history of the Fed. I think his policies have deepened the depression, lengthened the problems, increased the cost of gasoline and been a disaster.”
Bernanke is one of few good policy makers in the U.S.
thank mr bernke
@chiriquiTV I'm with that plan. Where do I cast my vote.
It's ironic that a lot of you calling for an end to the Fed have no idea about the actual functions of the Fed, and much less of the immense complexity of the economy. Yes, we need a Federal Reserve. It was created to ensure financial stability. Perhaps you all should look at the number of financial crises we had BEFORE the implementation of a Federal Reserve and compare them to the number we've had today. Some of you are clueless. It's why ECO classes should be a requirement for all.
@LobFest Thanks for your post. You helped me to better understand how capital is created out of thin air, and NOT by actually printing currency. Best of luck to you, and Thank You !!
@rosiertodd
The chairman was referring to inflation in recent years, not for the period of time you're referring to. Also, you're only looking at one side of the story, wages have also risen with the devalued dollar.
Even though this is obvious PR, I still will give him credit for doing this(an/any)interview. The nervousness that he shows i think is because of the camera, and not that he is a bad person.
I dislike the Fed and the system that it represents....But, looking past all that, I do have a tinny bit more respect for Ben himself.
well then I guess the video accomplished it s goal.
Oh yeah, cut the deficit. But please, just not this year.
I've heard that for decades!
You better change your paper dollars for real money (silver / gold).
THERE IN NO INFLATION!
* Oil is at $89 a barrel, up 21% in the last year.
* Gold is trading at $1,413, up 23% in the last year.
* Silver is trading at $30, up 66% in the last year.
* Copper is trading at 4 per pound, up 26% in the last year.
* Corn is trading at 573 a bushel, up 49% in the last year.
* Soybeans are trading at 1,300 a bushel, up 23% in the last year.
* Wheat is trading at 779 a bushel, up 41% in the last year.
I certainly can't disagree with that statement. I also think that if people picked up a book on Economics they would also never see any national or global news the same again. Which form of education would be better?
Great to see so many dislikes, only shows so many people fail to understand what this guy is talking about. Well, it is not strange... So many people never saw the crisis coming in first place.
Notice how concerned Bernanke gets when talking about "long durations of unemployment and decay of skills". Because wealth creation (e.x. getting people skilled to meet society's/earth's needs ) is so important over wealth manipulation(banking etc.). Although both systems are required.
Never saw the crises coming in the first place? You're a fucking idiot if you didn't see this coming! 0 percent overnight interest rates and you didn't SEE THIS COMING??? Here I guess Ron Paul must have been the only guy to see it coming than right??? Or any other libertarian for that sake! Fuckin idiot
He said they are not printing money, but just purchasing assets. How does one purchase something without money?? In reality they have printed 3.3 trillions of dollars to keep their toxic wheel turning and will keep printing money in the future until their debt bubble economy implodes.
A man who political historical heritage thru hegemony has seen a many a moon. Poignant distinctions on economized stability which has derived from faustion tradition is most enlightening.
So where you said it has risen 8.9% includes Food and Energy? That's a horrible amount of inflation. What is your point? How is Bernanke doing a good job if inflation has risen so much? What do you blame the rising prices on then?
Was talking about the reserve requirement which the fed sets in percentages. If I told you you had to keep 25% of your interest based deposits on hand and you didn't have that on hand you'd have to get more from the fed. The Fed sets that percentage (like 5% or something). So they set how much money banks need. As far as bubbles such as housing bubble they set that for short term and encourage lending. The Feds relaxed interest policy opened the door for risky lending, leading to the bubble.
Bernanke is a genius with QE stimulus programs. He knows the system is seriously messed up, so basically told investors to put their money in stocks because the FED wont allow the stock market bubble to burst. QE Infinity= Bull Market !!
Bernanke is out of dodge at the end of January because he does not want to be responsible whenever the bubble does burst and we are in global depression.
Jerome loves QE also
So if it's not creating money that causes the problem, then why are prices still going up? Especially with the price of gasoline, the average of gas is almost at $4/gallon and it will continue to rise. :(
inflation very low ,yeah right whos going to believe that
Just like now
The Fed has failed to prevent any economic crisis since 1913? How would you know? You're only looking at economic crises and saying "hey the Fed failed to stop this one", which is a self-fulfilling analysis. The Fed doesn't promote inflation; it promotes price stability.
What he says makes sense. When the economy is bad the Fed is suppose to lower interest rate so the Businesses and Consumers can get low interest loans to increase consumption and investment spending. An increase in Consumption and Investment spending = increase in GDP. This shifts the Aggregated demand curve to the right, thus increaseing Real GDP. Those of you that disagree with me, take some economics courses in college, it does make sense.
At 6 minutes, Ben says he isn't printing money but somehow QE2 will keep interest rates down. Is this a Bill Clinton moment ("I did not...with that woman")? I understand that the Treasury actually applies ink to paper when it comes to "printing" bills but I think it is a bit of misdirection to say that these types of money creating operations will have no impact on the money supply. If there is one thing we have learned from the Financial Crisis...credit creation matters.
It's the classic misunderstanding of "Supply & Demand". Flooding the market with paper money isn't going to increase the "demand", it only gives more money to people to by the same amount of goods. As long as there are people there will always be demands. If you want to reach a higher demand, then you need to increase your supply which is done through expanding production. If you look at America right now, it's the opposite, everything is being cut. If you think this guy makes sense you're nuts
I hate how people bash Bernanke.....
We're not printing money, just buying treasuries with our "reserves"... right.
Deflation leads to lower prices, which leads to lower wages, which leads to decreasing level of employment, output and income. Both Inflation & Deflation are bad, but deflation is hard to recover from. Thats why during the Great Depression, it was so hard to recover from it because Gold Standard held down the money supply. The reason why we recovered from the Great Reccession was fairly quick compared to the Depression was because the Fed can control interest rates and money supply.
The Fed prints dollars. Those printed dollars, the physical money, the paper ones are only a marginal amount of the money in circulation.
How about every single bank that loans people money (creating credit out of nothing on the spot)?
Thank you, I am sick and tired of uniformed people from both the left and the right make outrageous claims about the Fed
What outrageous claims?
@jaguarclaw That is THE question !! I do not have all the political and/or economic suave that others here do. However, let me use this scenario : You hire a painter to paint your bedroom. Upon completion, the job looks like crap. Even though you cannot paint worth a lick, (which is why you called a "pro") you can still recognize the crappy job you got. My point, although not as politically/economically suave as others, I can see Bernanke is NOT painting a pretty picture.
@xac33 .. I purchased gold/silver 2 years ago.. I am in the process of selling it right now.. before the 20 million expected home foreclosers kill the prices again.. I agree w/you but I also think that this depression is at least 75% on consumerism.. How could it have even happened if no one took the loans..? (especially the MILLIONS!! that never saved, spent every single penny earned & available on credit..)
Most powerful man in the world.
Why does Bernanke's voice quiver?
As you say it's an "overall" estimation of inflation. So how can you exclude energy and food in this "overall" estimation? You can't. So OVERALL looking at inflation there is a CLEAR increase. Majorly. Also, just fyi, the United States this year is making more domestic energy than it has ever made. We now only import roughly 36% versus 65% in 2005.
"We can raise interest rates in 15 mins!!" Wow!
Thoughts on the economy now?
I can raise interest rates in 5 minutes!
fed lowering interst rate, can you explain to me WHY the fed had to lower interest rates in the first place? they did it for good reason.
but unfortunately that's their only weapon, and the idiot private sector used that opportunity to speculate instead of using it on better means. Private sector need to take responsibility on their behavior.
He sounds nervous
This was in 2010. Look at gas now. He said inflation wouldn't happen, yet we are paying $4.20 for gas and milk. PRICES ARE RISING. NICE LIES BERNANKE!
But Reagan also signed one of the largest tax increase because he knew the national debt was becoming a problem. In my eyes thats what separates Reagan from many Republicans. Many Republicans believe that its tax cut all the way, but tax cut is only a temporary policy, permanent tax cut = large budget deficit. Clinton raised taxes but that also didnt slow the economy (mostly because of the dotcom bubble). I agree the wealthy should get no tax cut, but i do believe they should have a lower rate.
it was said in this report that some of the beneficiaries of the bailout money included JP Morgan Goldman Sachs Foreign Central banks. If they needed the money why were their stocks prices some of the highest in the stock market. The central bank of this country should not be engaged in the bailouts of private companies and other central banks, case closed
Before deregulation of safety net laws in 1985 under the reagan administration, economics were't nearly as complicated as they are now. The concept of Collateral Debt Obligations comprised of Mortgage, Car Insurance, and Health Insurance information never existed. The concept of selling this information known as CDOs for profit to other financial corps and grading it with investment ratings ranging from CCC-AAA never existed either The increase in complexity has lead to the corruption we see now
Redistribution of wealth (raise taxes on the rich and borrow a great deal of cash), investing in infrastructure and war spending got us out of the Great Depression.
dont you think that Bernanke is creating a disastor of inflation? i suggest you take a look at Alan Meltzer and what he has to say about the fed before you point fingers at those who are ignorant.
Okay, and so why is the value of the dollar going down then? Pretty soon, it's going to be useless and our country will collapse. This is why we need a gold standard to come back.
never seen anyone this nervous damn thats intense
if falling prices is the problem then Walmart must be the enemy. can't have it both ways. our prices are inflated with your interest/income tax paychecks, Ben. they need to come down.
@CrimsonEmpire Finally somebody who actually understands economics.
When you out right LIE, you become nervous, he is a criminal
don't blame bernanke; he's just doing his job. Blame the institution.
Am I the only one who gets the feeling that Ben doesn't know what the f**k he's doing?
END THE FED!
YEA
@chiriquiTV "Old Gringo" First, I thank you for not attacking me with harsh words. I'm not the brightest bulb in the box, but I'm not the dimmest either. Your point is well taken. I guess the vids of the printing presses pouring out sheets of currency were merely an "example" of how capital is created out of thin air. More at Reserve creation, adding 0's to their accounts is one way it's done. ( ty LobFest you helped me understand this one). You are right, the future doesn't look too well.....
Wow, you can tell he is scared out of his mind. And it's not because he nervous on camera. He makes public appearances and speeches all the time and he very comfortable with that. He thinks the U.S. economy and the Fed is screwed and he knows he's just buying time.
at 12:01 he relaxes a bit because he's finally speaking a bit of truth. but the situation he describes is still coming, he's just trying to delay it as long as possible and hope that some economic miracle saves them
Why are your eyes so cold, why do I get this chill down my spine when I see you talking. Why are your words so certain, why do I get a pain when you are asserting.
Why are you not telling us the truth and what are you hiding?
Why are your eyes so cold, why do I get this chill down my spine when I see you talking.
100% confident. Good luck!
"The last duty of a central banker is to tell the public the truth."
Alan Blinder, Vice Chairman of the Federal Reserve, on PBS's Nightly Business Report in 1994.
You have to understand that the often empty words of Central Bankers serve as a contrary indicator , so plan accordingly.
How is it that an individual investor like myself, and a handful of other people were able to see the recession coming, but the Chairman of The Federal Reserve wasn't able to see it?
If you really want to see a true representation of why the economy failed, watch the PBS Frontline's "The Warning".
GDP can be manipulated, all the fed doing right now is QE, so pretty much we are spending borrowed money, so it creates an illusion that our economy is recovering
Why are we surprised? Ron Paul spoke about this, all they did was delay the depression.
Horrible reporting, I haven't seen this many softball questions since a Larry King interview. Why not have Jim Grant or Peter Schiff at least counter this nonsense?
Bernake's explanation for why we're not investing in small businesses? "We have to balance the risk." Right, because when banks leverage themselves often times up to 42:1 with figures in the BILLIONS (!!) in investments on faulty mortgage debts, that's capitalism just as the founding fathers would have wanted. But investing in small businesses with maybe a 5 figure debt? That's just too risky...
Why does this guy still have a job?
people get fired for a lot less than ruining a country's economy
Printing money is a myth now? LOL! That's what quantitative easing is. Printing money out of thin air backed by nothing. This country is fucked!
deflation is a good things, price will be a lot of cheaper, it will fuel recovery
a case in point on this comment section is that the angry and unintelligent responses most likely came from the people that are uneducated. we need to be more educated so we can make better decisions for ourselves and for others.
the u.s. couldn't get out of depression was because hoover and roosevelt's interventionoist policies into our economy. The depression ended when the war ended, massive spending cuts, tax cuts and of course helped by the destruction of japan and europe's economy. that's the whole point behind gold standard, money is suppose to be rare, not as a mean to inflate for political purposes
did he really say the fed "doesn't print money"???
Ben Bernanke is shaking in his boots. He looks like he wants to cry.
He's not an trained public speaker, but he sounds very studied, as though he knows exactly what he's doing. Note though that he spoke exactly the same way when he denied that there would be any bubble burst or economic collapse in the years before it happened. Check out the "Bernanke is wrong 2006 2007 2008" video. That's what scares me.