http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm I thought this was a very interesting speech giving insights into Ben's philosophy.
Iam no economics professor, but heres my take on the whole situation. This entire time Ive been thinking Bernake is an Ahole for keeping interest rates so low and contributing to what feels like sky high inflation especially for food and energy. But I just realized the real Aholes are Bush The congress and Greenspan. Us has so much debt that if there is anykind of deflation we are screwed. It means the trillions of dollors we owe the chinese and just about everyone in the world would be worth more. We cant afford to pay the debt as it stands now. Imagine having to pay for the massive debt if there is deflation. There in lies the problem for Bernake and rest of the People in us. we are soo in debt if there is no inflation we cannot payoff the massive debt. With inflation our dollors are worthless Oil goes to $150 and the money goes to lunatics in middle east and Soviet union which is bieng run by reincarnation of stalin(putin). Also the freak in Venezuela is benefiting from this If Bernake raises the interest rates and there is deflation, then China would own half our nation. Whats a HOmey to do in situation like this? At least sheeple in US are slowly spending less and borrowing less. But the morons in congress still contunue to spend and borrow like there is no tomorrow. I feel the real problem is the congress and the president who are so incompetent and corrupt. But Bernake is going to be the scape goat for all our problems and we will continue with the same old ways that got us in this mess in the first place
The Fed will NOT be cutting rates to zero. At least not in the foreseeable future. This is a goldbug's desperate measure of promoting gold to $2000.
I've seen this Schiller guy on Larry Kudlow's show, he's a shifty fellow who is basking in the sunlight of a little fame. Given that he is in academia he's a probable socialist.
Up until the last 25 years, that's what they did. NOW.... the Powers feel they need to prevent any kind of decline in stocks or RE.... variety of reasons, but all greedy and sinister.
I think an occasional "recession" is actually healthy. What's the alternative? Things go up forever? We all know how those end.
Of course recessions are healthy... cleans out excesses. But Gummint today is more concerned about getting re-elected than anything else... and no politician wants to run for re-election during any kind of economic downturn... makes them too easy a target for the other party. So, now we have "money pump until we implode"... I'm thinking 30-50 years.