Was hiding the M3 Bernanke's brilliant idea? This move has accelerated the inevitable downfall of the fiat dollar.
Is Bernanke an 'amateur'? Evan Pickworth Fri, 09 Jun 2006 After the radical plunge in world markets, leading commodities expert Jim Rogers made the remark in this week's Barron's that Fed governor Ben Bernanke was an 'amateur'. It seems the press internationally is blaming Bernanke for the problems, which this week saw South Africa lose over six percent (the worst single day's fall since the IT bust), Brazil lose 3.5 percent, China 5.3 percent and Japan almost two percent. Much of the weakness set in after Bernanke gave mixed remarks about the US economy, with most investors expecting rates to rise. 'Bernanke has no knowledge of markets' Rogers said in Barron's: "[Ben Bernanke] is an amateur with no knowledge of markets whose academic work revolved around how nations could avoid depressions by printing money." Rogers believes the excess liquidity is placing pressure on Dow stocks and the dollar, but that the commodities boom is going to be bigger than the last one, lasting until at least 2014. "Add to that [American consumption] 1.3 billion Chinese and 1.1 billion Indians â all walled off from the global economy during the last commodities boom â joining the global scrum for natural resources... it's delusional to deny that competition for commodities will continue to heat up as a result of China's pell-mell rush from a peasant economy to economic giant," he said. The Fed lifted rates a 16th consecutive time at its May 10 monetary policy meeting, leaving the federal funds rate at five percent. The policy statement issued at the time was a disappointment to investors because it didn't hint at a pause in rate tightening. And this week Bernanke said core inflation had reached a level that, if sustained, would be at or above the upper end of the range that many economists, including himself, would consider consistent with price stability. Since then the Nasdaq has fallen seven percent, the Dow nearly six percent and the S&P is down close to five percent. All eyes will therefore be on the Fed this month for another potential rise. Traders boosted bets the Fed will lift rates at a 17th straight policy meeting when officials gather on June 28 and 29. Interest-rate futures show traders are pricing in an 80 percent chance the Fed will lift rates to 5.25 percent, up from 48 percent on June 2. I-Net Bridge
BUTTON IT, BEN FED STUMBLES ADD TO GLOBAL MARKET MELTDOWN By PAUL THARP -------------------------------------------------------------------------------- ZIP IT UP! Fed boss Ben Bernanke is learning the hard way that silence - when it comes to the state of the economy - is golden. Email Archives Print Reprint Feeds Newsletters June 14, 2006 -- As world markets spiral toward a crash landing, Wall Street is hoping new Federal Reserve boss Ben Bernanke keeps his mouth shut. Skittish investors worried about rising interest rates around the globe yesterday as stock prices collapsed in many of the world's capitals and gold plunged in its biggest one-day drop in 26 years. Tokyo's stock market triggered the global rout overnight as shares plunged there in the biggest point drop since 9/11. U.S. blue chips followed by losing all their gains this year, while investors in crude oil fled to escape a possible collapse of crude's long-running bull market. The Dow Jones industrial average fell 86.44 points to 10,706.14, while the S&P 500 dipped 12.71 to 1,223.69. The Nasdaq composite index dropped 18.85 to 2,072.47, its eighth-straight losing session, the longest such streak in 12 years. Many market watchers believe Bernanke has dropped the ball in his five months at the economy's helm as Fed chief - and that his talk on inflation, and the rate hikes he plans to contain it, have rattled investors. "Bernanke started with some tough talk, but he got mealy-mouthed and then real dovish to keep everyone in the game," said Bill King, market strategist at M. Ramsey & King Securities. Other Fed bankers didn't help matters, King said. "They were out there every day making speeches in a public-relations campaign to say 'Inflation is contained,' " he said. "All of them should just keep their mouths shut. And Bernanke? 'Just shut up!' " But they all got rock-star status and just loved it too much to stop, King said. "Now it's blowing up in their face because they were shills instead of quietly running policy," said King, echoing other analysts' frustrations. Their comments came as global markets were being knocked around. "There's a massive liquidation in just about everything - oil, stocks, gold, copper," said Peter Beutel, energy analyst at Cameron Hanover. Oil tumbled here 2 percent to $68.56 a barrel - which is more than triple its price of $19.73 a barrel in January 2002. "We're at the foothills of another energy recession," Beutel said. "Every time we've tripled energy prices, we get a major recession." Analysts said they are certain Bernanke will hike rates again this summer. "This mixture of potentially higher interest rates and an economic slowdown could lead to the next recession," said Herb Kurlan, president of Vtrader Pro. New government data yesterday said inflation is rising faster than the government predicted, due to broadly rising costs blamed on surging energy. The Producers Price Index rose 0.3 percent last month, much steeper than forecast. What's more, energy costs have drained an extra $203 billion a year out of consumer pockets since 2003 for vehicles and heating homes - or an additional $525 million more each day than they spent three years ago. paul.tharp@nypost.com