Wall Street's Love Affair with Ben Bernanke »

A careful reading of Federal Reserve chairman Ben Bernanke's op-ed in Tuesday's Wall Street Journal, shows that Bernanke thinks the economy is in a deflationary spiral that will last for some time. Ben Bernanke: "The depth and breadth of the global recession has required a highly accommodative monetary policy. Since the onset of the financial crisis nearly two years ago, the Federal Reserve has reduced the interest-rate target for overnight lending between banks (the federal-funds rate) nearly to zero. We have also greatly expanded the size of the Fed?s balance sheet through purchases of longer-term securities and through targeted lending programs aimed at restarting the flow of credit....My colleagues and I believe that accommodative policies will likely be warranted for an extended period." No talk of recovery here; just a continuation of the same radical policies that were adopted after the collapse of Lehman Bros. The only sign of improvement has been in the stock market, where Bernanke's liquidity injections have jolted equities back to life. The S& P 500 is up 40% since March. Conditions in the broader economy have continued to deteriorate as unemployment rises, the states find it harder to balance their budgets, and the real estate bubble (commercial and residential) continues to unwind. The Fed's policies are Bernanke's way of saying, "The states are not the country. The banks are the country." The public seems slow to grasp this message.

Read Full Story at globalresearch.ca »

149 Views Share Story 0 Comments Report