Benny made it perfectly clear in his Humphrey Hawkins testimony today that QE, in whatever forms and permutations, is here to stay at least for this year. And when the Fed expands its Balance Sheet, it is most certainly 'creating money,' although as I have said often enough 'printing' is a colloquial expression of the same sentiment.
Thank you very much for clarifying that for all the learned economists Ben. Your occasional honesty in Congressional testimony is a nice change of pace for a disgraced profession.
• Q: Are You printing money?
• Bernanke: Not literally.
• Bernanke: If the Fed were to tighten policy, the economy "would tank."
Ben tended to point a finger at the inept and ideologically purblind Congress for the obstacles to growth. And in addition to a hearty 'hear, hear,' I would certainly include the Obama Administration. The lack of genuine reform is appalling.
But what else can we expect from those stewards of bad governance caught up in a credibility trap which they helped to create.
Gold and silver were obviously hit with a bear raid in honor of Bernanke's testimony. What else would we expect from a thoroughly corrupted financial system? Intraday commentary on that here.
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