Oh, he'll make it. He can't be replaced at the whim of Congress nor the President... and he sold out (his soul and all American citizens).... to get the job. He WANTED to be the CHEESE and RELISHES in his position. Unless... you're not thinking somebody is going to see to it that he "meets with an unfortunate circumstance", are you?
May be of interest. In Saturdays' Fairfax press- Australia. http://business.theage.com.au/dont-beliece-the-big-bad-news-about-stagflation-20080613-2qa3.html
You know where cost push inflation exists? Everywhere except in the United States because so many other countries are pegged to the dollar. China really is like a state of the US because it imports our monetary policy This isnt some closed box system that the morons at the fed think it is./ The clowns at the the fed should ask themselves this. Is it going to be worth collapsing interest rates trying to save housing, but the knock off effects finally force places like China to let their currencies float and yields rise in the US? Because that wont help our banks of housing? If anything its probably worse.
They have to obey the law (at least on the surface) too. The Federal Reserve is theoretically "independent of the government"... they might ASK Bernanke to leave before the end of his term, but they can't replace him willy nilly. And if they did ask him to resign for a new lackey... what message would that send to the world? US Government was to be the sole determinant in the printing of money? The $USD already has enough trouble, thank you.
We should be reminded that US is the only country which can print US$ at no cost, all other countries have to work hard to earn US$. It would be really stupid that this monetary advantage over other countries is not fully utilized by US. Therefore, I don't believe that the US monetary policy is dictated by a single "stupid" person who happens to be the Fed chairman, nor do I believe the current US monetary policy is against the national interest of USA. Look, the US government debt is 9.3 trillions $, and the sub-prime cost to US is about 0.6 trillions (the total is 1.2 trillions, but half of that amount is paid by the foreigners). Adding 0.6 to 9.3 is not a big deal, so in principle US government can absorb this minor sub-prime loss without much difficulty. So, I speculate that the elite class in US have reached the consensus that US can conveniently use the "sub-prime crisis" as a convenient excuse to devaluate the US $ so that real value of US debt to the rest of world can be substantially reduced. Of course, US also needs to pay some price in the process, but much less. In fact, most will agree that the worldwide inflation caused by this "stupid" policy causes much more pains to other countries. Moreover, the US giant companies in Oil, Agriculture, Financial can benefit immensely during this process. When will this process end or reverse? I guess that is probably when substantial amount of wealth has been transfered to US from other countries in this process. Uncle Sam is a very shred business man, so don't call him stupid.
Your post is a classic example of "for a lie to be believed, there should be a bit of truth in it." You got the truth part, but entirely missed the lie.
I am glad to see that ET consensus has moved to my side of the boat. I have been criticizing Bernanke for well over a year, and I took plenty of abuse here for it. Of course, my complaint was not that he lowered rates but that he was too slow and timid in lowering them to address the housing crisis. Now he faces the worst of both worlds. Housing crashed anyway, taking the financial sector with it, but Bernanke's too little-too late policy now is biting us on the inflation end. Bernanke is apparently a great authority on the history of central banking and frequently quotes Walter Baghot. He is beginning to remind me of the Hal Holbrook character from Wall Street, who used to lecture amped-up Bud Foxx that the way to make money was to buy and hold good quality stocks. I fear that we have headed down a path that ends with a long recession, a dollar crisis and hard to predict political fallout. All because the fool ignored me.
None of his theories should have ever been taken seriously. We needed a regulator and a watch dog the last five years. Not an academic who seems to want to try out whatever he feels like. How has the fed managed to convince us that they are the wizard of oz and can bring prosperity with the right fed funds rate? Its ludicris to think the world is that simple