by Stephen Gandel, senior editor June 12, 2013: 9:47 AM ET "FORTUNE -- U.S. banks now have $1 trillion at the Federal Reserve. It's far more than they have ever had before, and it could be a big problem. And it's a new one. Before the financial crisis, the amount of cash banks kept idle at the Fed rarely topped $25 billion, which in terms of a multi-trillion dollar banking system is peanuts. But shortly after the start of the financial crisis, as a move to help the banks and save the economy (or perhaps the other way around), the Fed began paying interest on money banks deposited at the Fed." http://finance.fortune.cnn.com/2013/06/12/federal-reserve-bank-deposits/
i take heat for saying things but a few years ago the market was going to be finished forever and now skies the limit. the underlining problems were never fixed and the fed is carrying everybody on its back now. the fed likes to think printing money fixes things and it does but it also makes an even bigger future problem.
I believe the lessons learned from the Greenspan Fed will sink in and that the Fed will be able to unwind without to much havoc when the time comes. But only time will tell. If mistakes are made, I believe they will be new mistakes. Whereas, like Greenspan, the current Fed Chairman must have once believed in Equilibrium Theory and the self-interest of bankers to correct an untenable situation on their own. I don't see how Bernanke can believe that anymore. I don't see him leaving the punch bowl out as long as Greenspan did. Bernanke is a very bright guy. I think he is quite capable of learning on the job, and he's been on the job many years now, including his time on the Greenspan Fed. Why would he repeat the obvious mistakes of the Greenspan Fed? He wouldn't of course. If Bernanke is wrong, than it's likely all the other Central Bankers who are following his lead, or trying to, are also going to be wrong. What gives me confidence is Soros, who thinks the Fed policy now is the correct one. Soros was strongly opposed to the Bank bailout done as it was. He wanted to, in his words, 'put the money where the hole was' and replenish the banks' equity rather than using Tarp money to take toxic assets off the bank's books. He told Paulson not to do what he did. Paulson did it anyway, but should have listened to Soros. There is no brighter, more capable financial mind alive to day than George Soros.
1) The current bubble is that Big Governments solution is to try and re-inflate the last bubble. 2) There is no next bubble...... when this one pops..... it will make the Great Depression look like a very mild recession.
its odd you seem to act as if bernanke is a regulator as opposed to and employee of the shareholders who own the regional reserve banks which have all the stock in the Federal Reserve Bank. Bernanke is a paid spokesmodel for them. Like Greenspan. That is all. The Fed Board are like participants in a a banking "reality" show which is all scripted by the producers of the show... the owners of the bank. George Soros in all likely hood either works for the same bankers or is now one them by his connections through SoGen. (which got an huge bailout when the fed arranged to have AIG make good its debts to GS and SoGen. ) If you do not think the Federal Reserve is a private bank... google it. They pretty much said so when they said they do not have to respond to Freedom of Information Act requests. The also explain on their website... that the regional fed banks own the Federal Reserve.... and that there are share holder owners of the regional fed banks.