It's important to see that Jobs are just proxies for monetary velocity. Govt. can create and destroy jobs at will: either create new regulations that the private sector needs to manage/address or create new govt. FTEs.(border fences, aircraft carriers, space shuttles, roads, analysts, etc.) I read recently that ~10-15% of the US workforce works directly or indirectly for the US govt, which shocked me. I don't think Ben is overreaching - things are appearing much more well-planned, IMO, then last year at this time. Keep in mind the Fed is unlikely to ever be desperate because they can will things in a certain direction, but it takes time and adjustments to get the system there. The Fed being successful doesn't mean everyone owns a home or has a corvette in the driveway. The Fed's success is measured by whether people want to live in this country, raise families here, start businesses, [want to]work jobs and spend their time and energy existing within these borders. Darwin takes care of the rest.
Based on the moves in the past few months, I feel strongly the Fed has already to resolved to take _some_ type of action to remove the dollars down the road: their first volley was the UST bond purchases. I'm encouraged because the Fed is throwing things out there that are very attractive and, with little resistance, the economy is going to eat-up the extra money in the system. I liken it to an animal following a trail of breadcrumbs to a trap. Too bad Cheney isn't still in office.... )) The reason I'm more confident in the Fed then I was is due to the plan I see them executing. Ben is not a genius but he's sharper than people give him credit for.(I feel that way now after I see what he's trying to do) Also, don't expect them to show all their cards: if you and I knew what they know the FOMC wouldn't exist. There's always the chance they won't remove the liquidity, but to keep the ebb-and-flow seasons(Kondratieff ) going they will do something to remove some of the liquidity.
I consider myself very fortunate that I am quite liquid, and never played the long side with anything more than 25% of the house's money, because I took many chips off the table long ago. The longer I wait, the more my money buys. I will be honest and put it out there that I have never been more uncertain as to whether we'll see USD strengthening or weakening in the years to follow, however, despite the new, short-term downward pressure since the FOMC talking points yesterday. I find this incredibly interesting: http://market-ticker.denninger.net/archives/879-Bernanke-Inserts-Gun-In-Mouth.html
I think what gets lost sometimes is that the Fed does what it does in the context of the fiscal policies chosen by the elected Congress. If it were the other way 'round - if fiscal policy was a function of what the Fed wanted to do - there would be more room for criticism. But then you're essentially talking about appointed, unelected individuals setting economic policies, which doesn't fit with the democratic model.
Agreed - however right now I think treasury is so clueless that they are sitting back and letting the FOMC try to save their collective asses. Congress's financial IQ I put 3 std. deviations below that of treasury, so their committees are all but useless.(but provide good sound-bites for an outraged populous!) 12 months ago I though Ben and Co. were clueless douches. I have to admit what they are trying to do now is pretty damn slick...
I really am not being sarcastic, but why? Everything Bernanke has said so far has turned out to be wrong. He's been making claims that haven't materialized. He's been wrong far more than he's been correct. In fact, I don't know of a single claim he has made that has actually materialized yet. If I had the time (right now), I'd link all the clearly wrong predictions about what Fed policy would accomplish that he's made for years now. Why does Bernanke have any credibility, let alone a lot of it, in your view?
Krazy Karl. you make some good points. History has shown the fed is always behind the curve, ALWAYS. Perhaps Bens plans works. It is still going to take a long long time before investor confidence is restored. I pray everything works out. And I believe it will over time. Time is what will heal the economy.