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Showing posts with the label Ben Bernanke

An unprecedented move by the FED

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In an unprecedented move, the Federal Reserve tied monetary policy to a specific social metric, an unemployment rate of 6.5%. Given stubbornly high unemployment levels, this new monetary policy target is entirely appropriate. Looks like its working.

Mr. Bernanke appears to be willing to risk his reputation as an inflation fighter in order to lower the unemployment rate. I think the Bernanke Gambit is good news for the unemployed and good news for the country as a whole.

Bernanke signaled that bondholders would no longer dominate monetary policy considerations. This is for their own good, since they will benefit, over the long term, from a fairer and more stable economy.

The majority of American citizens are bond sellers, not bondholders. In a downturn, government spending, required in order to get the economy out of a recession, is financed through the creation, by fiat, of new money. The resulting increase in the quantity of money gives rise to inflation, assuming the quantity of goods …

Bernanke on the Hill

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Chairman of the Fed Benjamin Bernanke testified before the House Financial Services Committee today. In his prepared remarks he hewed closely to his July 17th testimony before the Senate Banking Committee.
A surprising number of questions focused on the LIBOR scandal. One question in particular seemed to go to the heart of the matter. A Committee member read a transcript of a conversation between a Barclay's trader and a staff member at the Federal Reserve Bank of NY. The transcript seemed to show the trader acknowledging his complicity in the commission of fraud. The Congressman then read the definition of fraud to the Chairman. This matched what the transcript revealed.

The Committee member then asked the Chairman if he thought this combination was enough to justify a charge of fraud against Barclays. The Chairman was, predictably, reluctant to agree.

Fiscal cliffs, twists and sequesters are irrelevant in the face of this type of clearly defined unethical behavior. 

It is this typ…

Humphrey Hawkins Hearing on Monetary Policy(Jui Kai Li)

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On July 21st , Federal Reserve Chairman Ben Bernanke testifies before the Full committee of the House Financial Services Committee for his semiannual Humphrey Hawkins Hearing on Monetary Policy.

Mr. Bernanke’s testimony is summarized as follows and copy of the written statement is available on the committee’s web site at:
http://www.house.gov/apps/list/hearing/financialsvcs_dem/fchr_072109.shtml


Mr. Bernanke’s early responses to the Wall Street Journal (wsj) were cited by Barney Frank (D., Mass.), the Committee’s chairman as his opening statement. Mr. Bernanke’s quotes on the WSJ also became some of the lawmakers concerns.

Expansion of GAO audit
According to the WSJ’s article “Bernanke Heads to Congress Battling Calls to Tame the Fed”, Mr. Bernanke strongly opposed the proposal to audit the Fed, calling it "self-defeating and dangerous." He said that the risk is that if investors see the Fed facing new political oversight, they will doubt its ability to take unpopular steps to fi…