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Bernanke Can’t Read A Chart

by Jeff Nielson, Bullion Bulls Canada:

In doing some recent surfing of the mainstream media’s “news”, a Bloomberg headline immediately caught my eye: Einhorn Finds Dinner Chat With Bernanke ‘Frightening’

As the world’s most-outspoken critic of that monetary charlatan; it was intriguing to see what this market icon found “frightening” about B.S. Bernanke – with such a long list to choose from. My curiosity was rewarded, most-particularly with the following excerpts.

Einhorn had been critical of Bernanke’s willingness to leave interest rates near zero [at zero] for more than five years. The hedge-fund manager has said that the benefits of low rates diminish over time until they are more harmful than helpful…

Here’s the chart upon which Einhorn’s observations are based:

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2 comments to Bernanke Can’t Read A Chart

  • Ed_B

    “The hedge-fund manager has said that the benefits of low rates diminish over time until they are more harmful than helpful…”

    Well, no kidding. Some of us have been saying for years that the benefit to the economy due to the reduction in interest rates is subject to the law of diminishing returns, both for percentage and for duration. When a business is looking at a new venture and calculating its cost, there comes a point where the cost of borrowing money ceases to be relevant to the discussion. IMO, the Fed has cut rates too deeply and then compounded that error by holding them there for far too long. Worse yet, the Fed is now in a position where they are unable to admit this, or any other, error so continue to make it. IMO, interest rates should never be cut below 2.5-3% and when cut to this level should not be maintained there for more than about 24 months. Bernanke has a lot of chutzpah telling Einhorn that he is wrong when it is crystal clear from the included charts that it is not Einhorn but Bernanke who is wrong.

    “What the chart above shows is that not only were Bernanke’s monetary “policies” (i.e. crimes) becoming steadily less and less effective, but they had (long ago) already become the least effective (i.e. most harmful) monetary policies ever pursued by a Fed chairman.”

    I don’t know whether it is something like this or the manner in which the dimwits in DC fawn all over the Fed chiefs when they are clearly not doing an adequate job, let alone a good job. Are our political “leaders” so economically challenged that they believe anything uttered by the Fed chief? Apparently so and THAT is truly disturbing. Considering this, it is no wonder that the US economy sucks and that we are in terrible financial condition with no solutions in sight.

  • J

    The Federal Reserve is working as it was intended to… Most of the members of congress & government understand that. There are a lot of people who actually think that it was conceived to help the US economy… That is why they endlessly puzzle over the inconsistencies of its policies.

    Biggest Scam in History – The Federal Reserve System
    http://alittletruth.hubpages.com/hub/Federal-Reserve-System-Biggest-Scam-in-History

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