I was wrong about Bernanke. It's Greenscam

Discussion in 'Economics' started by The Kin2, Feb 14, 2008.

  1. I've been too harsh on Bernanke. It's Alan Green$cam that left an economic timebomb that was about to explode just as Bernanke took office. He is trying his best to defuse, and might even succeed. Remember the Fed has information that we do not. Had they not been so aggressive with their cutting and monetary stimulus, we probably would be talking about a depression right now instead of a recession.

    Just my two cents now that I have hindsight. Bernanke is only tring to contain and defuse Green$cam's mess before it collapse the global financial system. Dare I say he's doing a pretty good job. Inflation is a lesser evil than deflation at this point in time.
  2. You guys are a bunch of idiots. Deflation is a red herring!!

    There is no deflation or even a remote chance of deflation. During a deflation, the dollar would be strong, not weak. Commodities would not be going through the roof.

    When the Fed is pumping out tons of liquidity, how can there be a worry other than inflation in this environment?
  3. No deflation? What about homes? It may have been a shitty asset, nevertheless they are deflating. Many financial companies are insolvent at this point. The only hope is if the deflation of this assets stops.

    There is inflation at the other end with food, energy and everything else. So what I'm saying it's better to have this inflation and support the housing market than it would be to have deflation to maintain prices of food and energy.

    There is in the neighborhood of $5 trillion in bonds backed by real estate. Probably more. Now tell me what would happen if real estate continues to deflate and financial institutions continue to write down billions in bonds?
  4. Houses that were pumped up should be deflating. It was a bubble. It needs to be popped, not propped. That is one asset that became overinflated because of easy money policies, more easy money policies only causes inflation and makes the problem worse as its pushed out into the future.

    Lower housing prices are a long term positive, as less money is tied up in inflated real estate and there is more capital freed up for investment.