Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Helicopter Ben Bernanke, Understanding the Chairman

Politics / Central Banks Jan 27, 2010 - 12:54 AM GMT

By: Dr_Jeff_Lewis

Politics

When it comes to precious metals investing, there is no entity as important as the Federal Reserve.  The Federal Reserve, which sets monetary policy and has a direct impact on the purchasing power of the greenback, has virtually complete control over inflation, deflation and the price of your metals.  In the coming weeks, Ben Bernanke, the current Fed chairman, will be up for reappointment by the Senate of the United States. 


Bernanke’s Reappointment

Bernanke's reappointment is virtually guaranteed, with enough lawmakers on either side of the aisle willing to give him a second term.  Many lawmakers, happy with his swift actions following the financial crisis, have said they will absolutely vote to reappoint him as head. 

However, other lawmakers are upset with the Fed’s dramatic quantitative easing programs, as well as the bank bailout bill and the stimulus package – all of which Bernanke supported.  Despite having his fair share of critics, those on Capitol Hill expect the vote to be close; however, none expect that Bernanke will have to find a new job.

His Great Depression Philosophy

Of all the big-government Keynesians who have chaired the Federal Reserve, none are as trigger-happy with monetary policy as Bernanke.  Before his initial appointment as chairman, Bernanke was recommended heavily as a student of the Great Depression.  Having spent years studying the economic implications and the role of government in extreme recessions or depressions, he believed that the Great Depression was largely the failure of government, later saying in his academic writings that the Federal Reserve and the US government did not do enough to calm the crisis. 

Of course, many economic viewpoints contrast this stance, with the Austrian School pointing out that government spending actually prolonged the crisis, although neither philosophy has been independently proven in academic circles.

Bernanke's Big Spending

For precious metals investors, there is no one better to have as Chairman of the Federal Reserve than Ben Bernanke.  His solutions for economic calamity are all straight from the Keynesian textbook: higher government spending and credit infusion via artificially low interest rates.  In fact, Bernanke even earned the title “Helicopter Ben” from critics who latched onto his quote regarding the printing press to reverse recessions.  He famously said, “The U.S. government has a technology, called a printing press, that allows it to produce as many U.S. dollars as it wishes at no cost.”

The Chairman's Importance

Only one Fed chairman in history has made it his premier task to fight inflation rather than create it: Paul Volcker.  As many people can remember, Volcker took the prime rate to a sky-high 19% to reduce inflation and encourage savings.  However, Fed Chairmen with the principles of Volcker are few and far between, as he was the only one to take inflation seriously when it came to his years as Fed Chairman. 

Ultimately, it is of little importance who becomes the Fed Chairman, as they all share the same ideology.  Of course, for precious metals investors, there is no one better for their wealth than Helicopter Ben.

By Dr. Jeff Lewis

Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules