Speaking to the Joint Economic Committee, Bernanke is laying out the issues facing the US economy and is weighing in on fiscal policy. He also touched upon inflation rates, both the recent elevated level and the moderation in commodity prices now being seen. He went over the recent OT and believes that the drop in longer term interest rates should “help make broader financial conditions more supportive of economic growth than they would otherwise have been.” He touched on also the plan to reinvest again in the MBS market. In sum, Bernanke said for the umpteenth time that they are “prepared to take further action as appropriate to promote a stronger economic recovery in a context of price stability.” He had this caveat though, “Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the US economy.” He then laid responsibility onto fiscal policy. Bottom line, outside of actual money printing where outright currency debasement will lift the asset prices of everything but US$’s, the Bernanke/Greenspan PUT is dying in front of our eyes and I say good riddance. It’s wrought too much damage already


The End of the Bernanke Put? (September 22nd, 2011)

Category: MacroNotes

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3 Responses to “Bernanke speaks, Greenspan/Bernanke put is dying”

  1. wally says:

    In a near-zero rate environment the ‘put’ was always an illusion. Slowly, slowly we come to see who was right and who was wrong about modern economic reality.

  2. Francois says:

    “Monetary policy can be a powerful tool, but it is not a panacea for the problems currently faced by the US economy.”

    Translation: “Ladies & Gentlemen of Congress, it is past due time that you stop screwing around and start acting like adults and do your goddamn job!”

  3. theexpertisin says:

    Am I the only one who noticed Ben was (more than usual) halting in his speech during the session, and generally appeared less confident than usual?

    Maybe the Chairman knows we are sliding into extremely perilous waters with no available life preservers.