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Bernanke: No Plans to End Money-Printing Policies in the Near Future

Feb. 27, 2013 10:06am Becket Adams

Ben Bernanke Delivers Semiannual Monetary Report To Congress

WASHINGTON, DC – OCTOBER 04: Federal Reserve Chairman Ben Bernanke testifies before the U.S. Congress Joint Economic Committee in the Dirksen Senate Office Building on Capitol Hill October 4, 2011 in Washington, DC. Bernanke told the joint committee that Congress should not cut spending significantly while it will impair economic recovery. (Photo by Chip Somodevilla/Getty Images)

Ben Bernanke in a report to Congress on Tuesday said the Federal Reserve’s low-interest-rate policies and monthly multibillion-dollar bond purchases will continue to until the economy improves and unemployment is under control.

Or as noted economist Jim Rickards put it:

#Bernanke on #QE: The floggings will continue until morale improves.

— Jim Rickards (@JamesGRickards) February 26, 2013

Delivering the Fed’s semiannual monetary report to Congress, Bernanke sought to minimize concerns that the central bank’s easy-money policies might cause runaway inflation later or dangerous bubbles in assets like stocks. He sought to reassure sometimes-skeptical senators that the Fed is monitoring potential threats and can defuse them before they hurt the economy.

Several Fed policymakers said at their most recent meeting that the Fed might have to scale back its bond purchases because of the risks, TheBlaze reported last week. Those comments, contained in minutes released last week, fanned speculation that the Fed might soon allow long-term borrowing rates to rise.

But Bernanke gave no signal that the Fed might shift away from its easy-money policies. He said its aggressive, open-ended program to buy $85 billion a month in Treasurys and mortgage bonds had kept borrowing costs low. And that, in turn, has helped strengthen sectors such as housing and autos, he said.

In short, he made clear the Fed has no plans to scale back its pace of bond purchases.

Addressing concerns that the bond purchases, which have pushed the Fed’s balance sheet to a record high above $3 trillion, could trigger high inflation, Bernanke said:

Inflation is currently subdued and inflation expectations appear well-anchored. We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery and more-rapid job creation.

He said that over the past six months, the economy has grown moderately but unevenly. Bernanke said the pause in growth seen in the final three months of 2012 “does not appear to be a stalling-out of the recovery.”

Getty Images.

When asked whether the Fed’s bond buying could push its balance sheet to $4 trillion, he said that it has no target for how much in bonds it plans to buy. Remember: It’s open-ended (we don’t call it “QE4-Ever” for nothing).

He noted that the Fed’s balance sheet is less than that of the Bank of Japan, which has battled for more than two decades to strengthen the sluggish Japanese economy. Because that’s comforting.

–

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The Associated Press contributed to this report.

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Comments (45)

elosogrande
Posted on February 27, 2013 at 2:21pm
Inflation “well anchored”? Has this buffoon looked at the escalating prices for food and clothing? Does he send a helper to pump gas for him? Is he too stupid to know that OPEC raises prices in concert with the amount of currency he prints?

These fools are so out of touch with what goes on in America that they ought to just move to their favorite socialist country and stop screwing America. Any politician in America who doesn’t know prices are going up, while incomes are either stagnant or going down, should be thrown out of office.
They are too stupid to be part of our government.

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- JRook
  Posted on February 27, 2013 at 5:20pm
  Really then perhaps you can explain to me why US oil companies are exporting oil and gasoline and why the Keystone pipeline oil is also scheduled for export. And of course why the US oil companies allowed gasoline reserves to drop precipitously over the past few months causing the current rise in gasoline prices. If you don’t think gasoline prices which fluctuate 10-15 cents in the same city are not being manipulated now you really not paying attention.
  
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AUsername
Posted on February 27, 2013 at 1:14pm
This is why historically bankers were attacked by people and exiled out of their countries was because they destroyed the countries economy and standard of living for people.

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- The_Jerk
  Posted on February 27, 2013 at 1:22pm
  The Fed is our enemy. As is, Soros. Soros is, and has been, far more dangerous to America than bin Laden ever was.
  
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- The_Jerk
  Posted on February 27, 2013 at 1:22pm
  Economic terrorists.
  
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AbrahamsSheepdog
Posted on February 27, 2013 at 1:05pm
Has he been to walmart or the pump lately? Jeez you can’t afford to leave town, everyone is broke. Yup it looks great. We are getting screwed so bad.

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CulperGang
Posted on February 27, 2013 at 12:09pm
God open the eyes of the right people and give them ****** to put Bernanke in cuffs . After a trial put him to death. Nations go hungry because of this manipulator. THERE IS NO NEED FOR THAT!!
All of these trillioners are as such becuase they TOOK it from everyone else through the manipulations of the likes of Bernanke. One family does not need to be a trillioner while another only has $1 buck. That is pure evil. Bernanke needs to be put to death along with his enablers AFTER a TRIAL. The world has to see the face of evil, first, to justfy their execution.
read the book Battle Hymn by John Scurro.

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- The_Jerk
  Posted on February 27, 2013 at 12:47pm
  The Jewish money mob is taking us down. Better wake up. It may already be too late. Bernanke is the most powerful man on the planet, at this time. Once they shift more of our wealth to Asia, that may change. They are killing our children’s inheritance.
  
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- AUsername
  Posted on February 27, 2013 at 1:03pm
  our number one goal should be the end the fed and the central banking system.
  
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CulperGang
Posted on February 27, 2013 at 11:53am
Bernanke belongs on the end of a rope. HE is pilfering and robbing the Amercian people for the Federal Reserve which is NOT an American institution. It is a private foreign bank. His enablers the Senators/Congress person all of whom are either CFR/TriLateralCommiss are all traitors and the enemy within. Brenanke is here to rob you. Iran was right to hang the “bankers.” They are robbing the country blind for the Rotchilds/WarB/Lazars/Morgan/Rockereller AND the CyA is their Praetorian guard killing anyone standing in the way of their looting nations around the world.
https://www.youtube.com/watch?v=OoQWxL2Hs78 hattip:

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thegreatcarnac
Posted on February 27, 2013 at 11:50am
Of course he hasn’t been nearly through with printing money; the country is not cmpletely ssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssss

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Outlaw_Josey_Wales
Posted on February 27, 2013 at 11:02am
This is what is going to happen when interest rates goes up.

At the end of fiscal year 2001
National debt was $5.77 trillion
Average interest 6.06 %
interest paid $359 billion

At the end of fiscal year 2012
National was $16.06 trillion
Average interest 2.48%
interest paid $359 billion

Notice from fiscal year 2001 to 2012
the debt increased 258%
average interest went down 57.4%
Interest paid IS THE SAME $359 billion

Today $16.432 trillion @ 6.06% interest = $995 billion annual interest payment.
6.25% interest is the 30 year average
1981 average interest was 12.3% “note some t-bills were @21.5% interest”
$16.432 trillion @ 12.3% = $2.02 trillion annual interest payment

In 1981 treasuries notes interest rates were at 21.5%, an all time high because of 11.83% inflation. The 11.83% inflation was caused by the FED increasing the money supply by 13%. During this great recession, the FED has increased the money supply by 200% – 300%. We very well could have run away inflation over 100% per year. Ben Bernanke has been wrong several time during the housing crisis, If he’s wrong on inflation, it’s good to be very bad for the whole world! We are going to be in big trouble when interest rates goes up.

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- The_Jerk
  Posted on February 27, 2013 at 12:56pm
  Most insightful post in a long time.
  
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- drs1969
  Posted on February 27, 2013 at 3:04pm
  I don’t see rates ever going up. The ‘Too Big to Fail’ banks are broke and Bernanke is bailing them out by buying their garbage. If he stops, they can’t loan and prices fall, deflation. At the same time, he’s buying Treasuries to suppress rates. He’s the one who told Japan to the same thing years ago. If a market is never allowed to find it’s ‘clearing price’, then there won’t be a recovery. That’s why Japan has been a zombie for 20+ years, to prop up the thieving banks. Our prices may go to the moon, but this crook will suppress rates all the way. If he stops, rates will soar, banks and prices will collapse, and markets will find their true level. They will keep this theft up until the banks clear all of their junk loans or the dollar collapses.
  End the FED!
  
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- Outlaw_Josey_Wales
  Posted on February 27, 2013 at 3:44pm
  @DRS1969
  
  Here are the similarities between Japan’s long recession and the United States up coming long recession.
  
  Japan long recession was caused by their World War II baby boomers. Japan’s baby boom was from 1930 to 1940. When people reach the age of about 45, their spending slows while their savings increases. Japan’s baby boomers had an average age of 48 years old in 1989. That same year the Japanese stock market NIKKEI was at 38,000 then crashed. Today the NIKKEI is around 11,000 to 12,000. Japan had several stimulus spending bills none of them worked. There National debt was 25% of GDP in 1989 today it’s over 200% of GDP. Japan could default on its national debt in the next 5 years.
  
  United States baby boom was from 1946 to 1964 with an average age of 48 years old in 2008, the same year the great recession started. Continuous spending and stimulus bills didn’t fix the Japanese economy. Stimulus spending is not going to fix the U.S. economy either. The U.S national debt is at 105% of GDP, with out of control deficit spending. Looks like the U.S. will default on its debt within the next 10 years.
  
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The-Monk
Posted on February 27, 2013 at 10:57am
No plans to end what he swore in Congress he would never do…. ???

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Shamrock241
Posted on February 27, 2013 at 10:48am
About 4 month’s before the election Bernanke said he would be stepping down as head of the FED at the end of the year, i guess he thought Romney was going to win. I guess since his partner in crime won the election there’s no need to step down.

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Vision Harry
Posted on February 27, 2013 at 10:47am
Wow , Thanks for the insider info Ben. I’m just going to start writing checks from my checking account and depositing them in my checking account until I’m a millionaire. I, can’t wait to tell my wife, we’re going to be rich! Or maybe I should just surprise her by putting those millions in government backed securities.

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hauschild
Posted on February 27, 2013 at 10:43am
Another Stay of Execution for the market.

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- Outlaw_Josey_Wales
  Posted on February 27, 2013 at 11:35am
  Basically what happens when Ben Bernanke prints money, it wrecks the dollar and causes inflation. With a weaker dollar the stock market goes up, the buying power of money in bond funds goes down. Ben Bernanke is stealing money from bond holders and giving to the stock holders, hoping the stock holders will spend the money to stimulate the economy.
  
  Also Ben Bernanke wants inflation! The average middle class citizen lost about 40% of their wealth when housing prices crashed. Ben is trying to inflate housing prices with his money printing. He is trying to create the wealth effect, home prices go up, people feel wealthier, and they spend money to stimulate the economy.
  
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- drs1969
  Posted on February 27, 2013 at 3:13pm
  RE: OJW
  House prices are now being ‘propped up’ by the banks holding foreclosures off the market and he is paying them to do it! Housing has more to fall to find it’s real market price. The bubble was created by easy loans that are no longer available. All Bernanke’s inflation is doing is taking discretionary cash out of folk’s pockets and at the same time making it harder for first time home buyers to purchase. Just the opposite of what should happen! Rigged markets.
  
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matamoros
Posted on February 27, 2013 at 10:38am
These guys are really not that stupid. They know it’s all going to hit the fan, they already have accepted that, they just need to kick the can a little further down the road, just enough past o’bozo’s reign, so that the new elected president can take the blame, when it all comes crashing down.

Between now and then, do as much as you can to prepare for what’s coming.

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- CulperGang
  Posted on February 27, 2013 at 12:00pm
  Benranke is engineering the collapse. He is engineering removing your wealth and starving you out.
  The Federal Reserve Board members are the Rotch/RockerF/Morgan et al: Bankers PRIVATE. The are looting you. If he is not locked up you will be starving in a huge depression. THAT IS Bernankes end game taking your money and the wealth of the nation out.
  
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- matamoros
  Posted on February 27, 2013 at 12:37pm
  @ CulperGang
  
  Yes. He may be looting my wealth, and yours, but no sir, My family and I will not be starving. We are prepared. We work on the 5 F’s a little every month (Fresh water, Food, Facilities, First Aid, Firearms), and I’m not talking about just stocking up on stuff, but building and maintaining renewable resources in each of these categories.
  
  Get with it man!!! You got 4 more years to get ready.
  
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Dougral Supports Israel
Posted on February 27, 2013 at 10:34am
Tell us the real reason for it Ben, that the Fed is now the biggest buyer of US bonds because the worthless paper cannot be sold on the open market at the interest rates the government wishes (can afford) to pay. Tell us the truth that the US government would be in immediate crisis and perhaps insolvent if it had to play by the rules of the financial markets.

It’s obvious that here isn’t enough free money to supply the US government so it has to be created. Brace for impact.

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- hauschild
  Posted on February 27, 2013 at 10:44am
  The problem is, not matter who is in control, you’ll never get that answer because who wants to admit that type of problem and then be forced to deal with it?
  
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- UNALIEN
  Posted on February 27, 2013 at 10:53am
  HAUSCHILD
  
  exactly, this is a systemic imperative, even if the Republicans wanted to, they can’t fix it..
  
  the time has long past that is could be dealt with,, the real debt, liabilities and unfunded obligations is 200-220 trillion when interest rates rise that skyrockets,,,
  
  there is no way out without some form a default
  
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Cavallo
Posted on February 27, 2013 at 10:32am
The printing is pretty much the only thing propping any of this up. When it stops… thats when the real fun begins.

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- drs1969
  Posted on February 27, 2013 at 3:18pm
  Yes, the cost of living falls. All of us who have been savers will be much richer, while the free loaders will be begging in the streets, like Mexico in the 80′s. The beggars used to try to reach in my pockets down in Tiquana back then. Mexico is our future.
  
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UNALIEN
Posted on February 27, 2013 at 10:29am
the purpose of the FED is to create cognitive dissonance…

debt expansion or money printing can never stop… we are in a ponzi death spiral,,, if they stop it collapses

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SquidVetOhio
Posted on February 27, 2013 at 10:28am
“Inflation is currently subdued and inflation expectations appear well-anchored.”

Oh yea, they don’t include food and gasoline/electricity in when measuring inflation. Because we NEVER buy those two things…

This man is destroying our country.

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SpankDaMonkey
Posted on February 27, 2013 at 10:23am
.
Ben, I have the solution!!!! If you would just print a Million Dollars for each of us, we’ll do our best to help the economy…..

300million Americans X $1,000,000 = $300,000,000,000,000.00 Yep that should do it. Problem Solved….

Why do I have to think of everything?……This Monkey needs a break……..

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woodyee
Posted on February 27, 2013 at 10:16am
“Inflation is currently subdued and inflation expectations appear well-anchored.”

They shoot horses, don’t they?

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- Fubared
  Posted on February 27, 2013 at 10:49am
  Speaking of shooting horses…GOP thinking of ceding mo power to 0?
  http://www.politico.com/story/2013/02/senate-gop-ponders-shifting-power-to-obama-88149.html?hp=l1
  
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Darmok and Jalad at Tanagra
Posted on February 27, 2013 at 10:15am
I understand why he is thinking that, we pay a flat rate for the printer and supplies, so, we actually make money by printing more money. And Bernake knows that sooner or later the ink will be worth more than the dollar, so the more we have, the better the dollar’s value will be held up.

So, I think I am making as much sense as this idiot, do you get the sarcastic point I am making.

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- Snowleopard {gallery of cat folks}
  Posted on February 27, 2013 at 10:19am
  absolutely and you explain the uttermost stupidity and failure of policies of Obama and the administration and they are out of control, out of ideas, and growing ever more desperate.
  
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moreteaplease
Posted on February 27, 2013 at 10:15am
What a session of bs from Bernie this was.

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Gonzo
Posted on February 27, 2013 at 10:15am
“the Fed is monitoring potential threats and can defuse them before they hurt the economy.”
You know, like we did with the housing bubble.

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- drs1969
  Posted on February 27, 2013 at 3:23pm
  Exactly, this fool was telling Congress that there wasn’t any problem right at top of the market!
  
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tozzo
Posted on February 27, 2013 at 10:14am
We will keep printing money until we can not print it fast enough to keep up with the inflationary spiral of the cost of the ink & paper to continue. Thank You.

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COFemale
Posted on February 27, 2013 at 10:13am
Hey Bernanke, while you are printing that 1 million for you, would you kindly print me just 200000 tax free. I need to pay off my house and have a bit let over for the monies that Obama took out of my savings because I am having trouble finding a full time job.

You can tell who are the devils children.

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tozzo
Posted on February 27, 2013 at 10:10am
We will keep printing money until we cannot print it fast enough to buy the ink to keep going!

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IndyGuy
Posted on February 27, 2013 at 10:07am
Way past time to eliminate the FED…

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- Fubared
  Posted on February 27, 2013 at 10:36am
  The damage has been done, but yes, time to end the FED. Look at some of the comments on this Durden piece. We are so screwed.
  
  http://www.zerohedge.com/news/2013-02-27/bernanke-testimony-day-two-webcast-time-house-committee
  
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