Re: Does Ben Bernanke really believe that the Fed helps?

ThreeTrees — Sat, 27 Nov 2010 21:34:46 GMT

Consider the economic equation worshippped by politicians: .

Quantitative easing has an affect on Inv(estment), G(overnment Spending) and eX(ports) and i(mports). It aids investment by supporting the balance sheets of banks so that they may continue to lend, it enables government spending by placing a demand floor under bonds, and it aids exports and hampers imports by devaluing the currency. It relies on the "trickle down" effect in order to bolster consumption which, so far, has proven elusive.

In other words, you bet your ass Bernanke thinks it helps. Or rather, he lays awake at night wondering why trillions of dollars in synthetic "aggregate demand" aren't pulling the economy up. Or rather, and this is the view I ascribe to, he knows the Fed cannot achieve its stated mandates so his unstated goal is to print up the difference on the banking sector's balance sheets so it can begin to lend off of a capital base unencumbered by counterparty liability. Keep in mind that under a fractional reserve banking system as mature as the one that exists today C, Inv, G, eX and i are ALL supported in large (most) part by leverage and any reduction in that leverage necessarily means deflation and depression. Bernanke and the status quo he represents believes this simply cannot be allowed to transpire.

Re: Does Ben Bernanke really believe that the Fed helps?

Clayton — Sat, 27 Nov 2010 21:02:32 GMT

Does Don Corleone's bookkeeper think he's helping the neighborhood?

Clayton -

Does Ben Bernanke really believe that the Fed helps?

No2statism — Sat, 27 Nov 2010 20:35:55 GMT

I know it's impossible to read minds, but I was wondering if any evidence existed that would give us a better picture as to whether he's out to hurt the general citizenry or if he's just ignorant of the fact that central/ized banking is destructive.

I know this is kind of silly topic, but I wanted some opinions from fellow Austrians. Maybe I'll learn some things with good evidence.

General

Re: Does Ben Bernanke really believe that the Fed helps?

Re: Does Ben Bernanke really believe that the Fed helps?

Does Ben Bernanke really believe that the Fed helps?