Bernanke Calls ‘Printing Money’ a ‘Myth’; Says QE3 a Possibility
- Posted on December 6, 2010 at 7:48am by
Jonathon M. Seidl
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WASHINGTON (The Blaze/AP) — Federal Reserve Chairman Ben Bernanke is stepping up his defense of the Fed’s $600 billion Treasury bond-purchase plan, saying the economy is still struggling to become “self-sustaining” without government help, and committing to buying more bonds if should the current purchases not produce the intended effect.
In a taped interview with CBS’ “60 Minutes” that aired Sunday night, Bernanke also argued that Congress shouldn’t cut spending or boost taxes given how fragile the economy remains.
The Fed chairman said he thinks another recession is unlikely. But he warned that the economy could suffer a slowdown if persistently high unemployment dampens consumer spending.
The interview is part of a broad counteroffensive Bernanke has been waging against critics of the bond purchase plan the Fed announced Nov. 3. The purchases are intended to lower long-term interest rates, lift stock prices and encourage more spending to boost the economy.
Critics, from Republicans in Congress to some officials within the Fed, say they fear the Fed’s intervention could spur inflation and speculative buying on Wall Street while doing little to aid the economy.
On other issues in the “60 Minutes” interview, Bernanke:
— Argued that unemployment would have been far higher — “something like it was in the Depression, 25 percent” — had the Fed not provided extraordinary aid to Wall Street firms, banks and other companies to ease a credit crisis.
— Said it could take four or five more years for unemployment, now at 9.8 percent, to fall to a historically normal 5 percent or 6 percent.
— Reiterated that the Fed is prepared to buy even more than $600 billion in Treasury bonds over the next eight months, should it decide the economy needs the fuel of even lower interest rates.
— Argued that the risk of inflation is overblown. Bernanke said he’s “100 percent” confident the Fed will be able to ward off inflation, when the time is right, by raising interest rates and unwinding its stimulative programs.
— Called the risk of deflation — a prolonged drop in prices, wages and the values of homes and stocks — “pretty low.” He said the likelihood would have been greater if the Fed weren’t maintaining super-low interest rates.
— Urged Congress to improve the nation’s tax code “by closing loopholes and lowering rates” for individuals and companies. He said doing so would create greater incentives for people to invest.
Critics who fear the Fed is raising the risk of inflation have complained that its bond purchases mean the Fed is, in effect, printing more money. In the interview, Bernanke called that a “myth.” He insisted the Fed isn‘t printing money when it buys Treasurys and said the program won’t expand the amount of money in circulation in a “significant way.”
The interview is already causing unrest in the market. On Monday, the dollar neared a two week low against the Yen as fears of inflation continue to rise:
Bernanke’s apperance Sunday night is part of a public-relations blitz he’s mounted since the Fed announced the program Nov. 3. In private and public appearances, Bernanke has sought to explain and defend the program to ordinary Americans, investors and lawmakers on Capitol Hill.
His efforts have included an Op-Ed article in The Washington Post and discussions with students in Jacksonville, Fla., economists in Jekyll Island, Ga., business people in Columbus, Ohio, central bankers in Europe and members of the Senate Banking Committee.
Criticism has come from both home and abroad. Officials in China, Germany, Brazil and other countries have argued that the Fed’s plan is a scheme to give U.S. exporters a competitive edge by keeping the value of the dollar weak. A weak dollar makes U.S. goods cheaper abroad and foreign goods more expensive in the U.S.
It’s rare for a sitting Fed chairman to grant an interview, whether for broadcast or print. But this was Bernanke’s second appearance on “60 Minutes.” His first was in March 2009. At the time, he was facing anger over Wall Street bailouts and rising anxiety about the economy.
In the interview that aired Sunday, Bernanke pointed out that the economy is growing at an annual pace of around 2.5 percent — far too slow to reduce unemployment. For a self-sustaining recovery, consumers and businesses would need to spend more, so the economy could grow faster.
Bernanke has said he hopes the Fed’s bond-buying program will help lift stock prices. In part, that’s because lower yields on bonds would cause some people to shift money into stocks and also because lower corporate bond rates will spur business investment.
Higher stock prices would boost the wealth and confidence of individuals and businesses. Spending would rise, lifting incomes, profits and economic growth. Bernanke has referred to this as a “virtuous cycle.”
Asked whether the recovery is self-sustaining, Bernanke responded: “It may not be. It’s very close to the border.”
Given the economy’s still-weak growth, he said: “We’re not very far from the level where the economy is not self-sustaining.”
The Associated Press contributed to this report.
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Comments (94)
spreadcommonsensenot pc
Posted on December 6, 2010 at 9:37am1913 was the end of America——– the 100yr plan
Report Post »TXPilot
Posted on December 6, 2010 at 9:32amBottom line, is that your dollar is going to collapse folks. Other countries like China know this, so they are getting out of the dollar, just as you should be. The nightmare scenario is coming true and people like Bernanke are making sure it does, so be prepared to take care of yourself and your family. Get as much of your worth out of the dollar and into precious metals, commodoties, or at least food and other items you use everyday, or you will soon watch a large percentage of your assets evaporate. I admit that I was skeptical when Glenn was telling us how high the prices could go on everything we want/need, but based on what the government and the Fed continue to do, I am now a believer. The house may not be on fire yet, but most of us can smell the smoke, and thanks to our traitors in Washington, the fire dept. isn’t coming.
And once the deliberate destruction of our economy is complete, I’m seriously wondering how it will ever come back, due to the fact that our manufacturing base has been decimated, uncountable jobs have been sent overseas, our schools have been turning out uneducated drones for years, and we have been reduced to a “consumer society”,relying on poorly made, imported crap from overseas. It’s sad to watch the country you love being slowly and deliberately strangled to death.
Report Post »rdk
Posted on December 6, 2010 at 10:20amAnd how do you know that you are correct?
Report Post »charliego
Posted on December 6, 2010 at 10:56am@RDK (txpilot)
Report Post »HOW about—–history????
sbenard
Posted on December 6, 2010 at 9:22amI think Bernanke’s middle name is Marie Antoinette. Hey France, can we borrow a few guillotines sometime? Okay, I’ll settle for an impeachment of the Fed Chair!
The reason he wants us to SPEND more and tax less is so that there is ever more debt for him to monetize for the benefit of the banks that are members of the central banking cartel. There 18 banks, which the Fed refers to as “primary dealers”, who are ironically that same banks as the “too-big-to-fail” banks that we were all forced to bail out. And did you know that the majority of them aren’t even American banks?
Report Post »FANGS
Posted on December 6, 2010 at 9:16amI am an employer. No employee’s left. No work. This is just another Union pension bailout. My small business hasn’t gotten one cent of any funds since 08. All Three of my workers are in forclosure. The Idiots who are making these decisions, are Insane. Clinically Insane . America, will have to put them down. Once the first rounds are fired Everyone in the Country will open up.
Report Post »TheRightMan
Posted on December 6, 2010 at 9:02amThis was an interesting article. I always figured that they were diluting the value of the dollar to:
a. spite China
b. sell more goods internationally
The Fed is doing this to also make loans cheaper for the borrower on a national basis.
This is a bit risky though. First of all, the US is a services based economy. If international economies are not growing or are not at ‘first world’ levels, the need for services that we render are borderline worthless. Most international service needs are handled by churches, non-profits, and other NGO’s.
Manufacturing is a diminishing part of the economy as we become more efficient at it (or as it becomes more cost effective to import). This strategy of the Fed to promote this is dubious. It can only be profitable for manufacturers or businesses that provide services who are already very large and have good relationships with the government.
Secondly, it is true that loans become cheaper for borrowers, but only for those who can pay them back. They want to provoke people to borrow, but if people are not making an income, people will not borrow. It is also only cost effective for very large banks to make a very high volume of loans, the smaller loan people have to resort to extra fees or not making loans at all – they may not be able to compete.
Report Post »TonyDarrington
Posted on December 6, 2010 at 8:59amWe are in an economic war with China. China intentionally pegs its currency below the value of the Dollar. This makes trade strong in their favor. Chairman Mao has to create 25 million jobs per year to keep up with population growth. He does this by stealing manufacturing jobs from us. We buy the junk, and our money supply flows to China like a river.
Report Post »The Bernacke is deflating the dollar in an attempt to crush the Chinese economy and stop this practice. When the dollar declines, Mao has to decrease the value of Chinese currency to keep the balance of trade in his favor. Eventually, he will not be able to make enough money at trade. A decline in the American economy helps this because we can not afford the junk they are making. In both cases, the Chinese economy suffers more than ours. Eventually we will be weaned of the useless plastic junk they sell us, and it will be more economically viable to bring manufacturing back here, reviving US manufacturing.
Or, the Bernacke is wrong, and we will spiral into horrible hyperinflation and the world will collapse into one world government. In that case he will go down as the other man who ruined America.
We can stop buying useless plastic junk from China today and help this problem immensely.
chicago76
Posted on December 7, 2010 at 7:15pmHe is playing Russian Roulette with China. Who will die first?
Report Post »printdesignchicago.com
Posted on December 6, 2010 at 8:59amif interest rates go much lower, they’ll sit at ZERO.
situation at critical mass…. implosion imminent
Report Post »BQI
Posted on December 6, 2010 at 8:35amThat’s right Ben, just keep printing. When you run out of paper we can use our Monopoly money, no one will know the difference.
New article and video “Gangsta Govment” The Obama Administration @ http://www.blackquillandink.com
Report Post »charliego
Posted on December 6, 2010 at 9:36amFOLKS BQI is a very educational site, I recommend it for numerous points of comprehension toward events and conditions. Recently they added Charles Payne to offer his assessment/commentary in economic conditions. I haven’t seen any of his articles yet, but the site is still worthy of your time in other avenues. Many videos-articles of interesting and valuable education-information.
Report Post »Windigo
Posted on December 6, 2010 at 8:30amDId you see his lip and nose twitching while he was talking?.
Report Post »dizzyinthedark
Posted on December 6, 2010 at 8:29amThought QE2 was going to work too?! Now we are to believe #3 is going to work?! How stupid or thirsty do they think we are?!
Report Post »Freedom1984
Posted on December 6, 2010 at 8:26amANOTHER recession? Aren’t we still working to fix the RECESSION WE ARE IN NOW? It’s fools like this jerk that will place America into a depression…so that his commie friends can try out another “New Deal” and expand government even more.
In fact I bet they are hoping Americans are so uneducated…that they will listen to this crap and NOT FIGHT BACK. We will take our country back… it’s only a matter of time, faith and honesty………
Report Post »Tyson
Posted on December 6, 2010 at 8:25amYeah right no inflation worries, Ben, Have you actually gone to the grocery store of late? What a turd merchant!
Report Post »jedi.kep
Posted on December 6, 2010 at 8:19amAnyone who believes this bozo can join him in the clown car that’s still in the ditch. What a lying, inept buffoon.
Report Post »tower7femacamp
Posted on December 6, 2010 at 8:18amThey don’t print money, they print Debt.
Report Post »byehlik
Posted on December 6, 2010 at 8:18amPay no attention to the man behind the curtain…..Have we heard this before? What a crock, end the FED!
Report Post »BradWX
Posted on December 6, 2010 at 8:17amWeimar Germany here we come!!!!!
Report Post »Marcobob69
Posted on December 6, 2010 at 9:35amI totally agree!
Report Post »hempstead1944
Posted on December 6, 2010 at 8:11amAs long as the chief money changer remains in the temple there will be no resolution to our economic morass…….
Report Post »SgtB
Posted on December 6, 2010 at 8:07amWhat the article’s headline should read like is…
Struggling economy starting to finally pull its head above water after federal government turns off the hoses, so the hoses will be turned on again if the private sector continues to make progress.
Report Post »Captain Courrageous
Posted on December 6, 2010 at 8:06amBen Bernake is a LIAR!!!
END THE FED NOW!
Report Post »POPPIJIM
Posted on December 6, 2010 at 8:05am100% positive they can ward off inflation? Wow! What power!
http://www.businessinsider.com/bernanke-100-confident-2010-12
Report Post »tmkphx1962
Posted on December 6, 2010 at 8:03amHIstory has proven that this does not work. Yet the administration is doing it anyway. Read The Forgotten Man. It is very scary to see that Obama has taken FDR’s playbook and is running with it. This plan of Bernanke’s is going to kill out country.
Report Post »Insipid
Posted on December 6, 2010 at 8:00amHe is so full of crap, his eyes are brown.
Report Post »Conserving Ink
Posted on December 6, 2010 at 7:59amThere is no way Bernanke is just ignorant of the facts, this is a purposeful lie. Not only that, but he can not be telling this lie on his own. This lie is an agreed upon lie with many parties because there is no countering voice within the Administration. If they did not know for a fact that this action was harmful to the United States there would be no reason to lie. The Obama Administration is knowingly conspiring against the people of the United States to do them harm. There can be no other interpretation.
Report Post »_____________________________________________________________________________
http://conserving-ink.blogspot.com/2010/12/government-we-didnt-elect.html
ronmorgen
Posted on December 6, 2010 at 8:42amAgreed, they know they will lose the election, and must accelerate a financial collapse before 2012. The dollar has taken a dive in November. Each $600,000,000,000 stimulous reduces it’s value by 20%.
Report Post »HKS
Posted on December 6, 2010 at 7:56amWell, the other two worked so well. Why not?
Report Post »raiderglenn
Posted on December 6, 2010 at 7:52ambull crap! on everything he said…
Report Post »Nightstalker
Posted on December 6, 2010 at 8:01amThis guy should be in prison!
Report Post »starman70
Posted on December 6, 2010 at 8:06amWhen you print money based on nothing, the money you print becomes worth less than nothing. Apparently, Bernake has never learned the lessons fo the Weimar Republic after WW1. The answer is to curtail government spending (Fat Chance) and keep the government from prostituting America to the Chinese.
Report Post »@leftfighter
Posted on December 6, 2010 at 8:17amEnd the Fed. End the Fed. End the freaking Fed! NOW!
http://endthefedusa.ning.com/
Report Post »tower7femacamp
Posted on December 6, 2010 at 8:18amsure Ben anything you say
Report Post »http://www.scionofzion.com/federalreserve.htm
@leftfighter
Posted on December 6, 2010 at 8:22am@ RaiderGlenn:
One thing he said isn’t bullcrap.
All three of us would agree, I think, that the risk of deflation is pretty low, given the repeated shots of Keynesian-Weimar bliss they keep pulling.
Oh, the chance of DEFLATION is pretty low, but inflation? Now back to your regularly scheduled bull crap.
Report Post »Nostraquedeo
Posted on December 6, 2010 at 8:25amThis is all about Baby boomers.
Report Post »mikem1969
Posted on December 6, 2010 at 8:29amEvery single memeber of congress, the white house and the fed should have to take REAL ECONOMIC COURSES (not progressive economics) AND GET A DEGREE IN ECONOMICS. These morons can’t add 2+2=4, they think its 5, 6, 7, or 8. They are seeking to destroy us quicker and make the US completely fail before we get to the 2012 election and vote these morons out.
Report Post »tobywil2
Posted on December 6, 2010 at 8:36amINFLATION – STEALTH TAXATION:
The tyrants (Wannabe Peers) would have you believe that taxes are only increased when the legislature increases taxes. These tyrants use the confusion over the relationship between wealth and the medium of exchange (money) to perpetuate this myth. Actually, the tax on the economy rises whenever the government s increases spending. Tax laws just determine how the liability is distributed. If the taxes fail to cover expenses, the value of the dollar decreases and anyone who owns money pays the tax in the form of loss of purchasing power. Money, (paper money) has no intrinsic value. The dollar’s value is determined by the quantity of wealth the market is willing to exchange for the dollar. The dollar’s value eventually will be determined by the nation’s wealth divided by the dollars and credit in circulation.
Inflation is not a recent phenomenon. During the 19th Century the inflation rate in the United States was 12% for the entire Century. In 1800, $0.89 had the purchasing power of $1.00 in 1900, a change of about 12% in 100 years. From 1900 to 2007 the inflation rate was about 25 to 1, a change of 2500% in 107 years. A Google search lists over 20 pages of “inflation calculators” three of the most popular inflation calculators list the inflation rate of between 24.6 and27.71 from 1900 and 2007. In other words, $1.00 in 1900 was worth around $25.00 in 2007.
What happened? In the late 1800’s and early 1900’s four factors emerged that caused inflation to increase. These are:
• Creation of the “Fourth Branch of Government” the Bureaucracy
• Enacting and enforcing the Sherman Antitrust Act.
• Creation of the Federal Reserve
• Enacting the income tax
• Wars
How did these factors cause such erosion in the value of the dollar? Chapter 9 of “21st Century Common Sense” explains in simple terms how these factors produced inflation of the dollar and aided the “Wannabe Peers” in usurping our freedom. The book “Money Mischief” by Milton Friedman provides a complete history of inflation, the causes and the consequences for those who require more proof. http://commonsense21c.com/
Report Post »Planada Conservative
Posted on December 6, 2010 at 8:38amCheck this out. It’s hilarious…
Report Post »http://www.youtube.com/watch?v=PTUY16CkS-k
Sinista Mace
Posted on December 6, 2010 at 8:38amIt’s becoming apparent that the majority of people like Bernanke and those surrounding him, the NY Fed, the Treasury, the President, a large number of members of Congress, and a large number of members of Senate, are criminally corrupt.
They all are saboteurs and deserve treason charges.
They should all be in jail and executed for treason way before Julian Assange, that’s for sure.
This clown gave over a trillion dollars to foreign banks, and God knows who else.
No wonder they’re so afraid of Ron and Rand Paul.
Christie/Paul for President 2012.
Report Post »snowleopard3200 {mix art}
Posted on December 6, 2010 at 9:18am@The Blazers;
This guy makes Baghdad Bob look positively genius level in spin – even when the tanks were rolling by a few blocks away. Having his tail brought to justice for fraud, conspiracy of theft (future generations), and whatever else could be done would be nice; and then if found guilty – and surviving a Obama pardon, then sentenced to the maximum time allowed by law.
Report Post »guyperram
Posted on December 6, 2010 at 9:25amThey have built a huge structure of cards. Almost all countries are using an unbacked paper currency. They are in the process of termination. Beck is correct, the are quickly proceeding into the end game. If we are lucky, there are months left, not years.
Report Post »Protect yourself, lay in a long term supply of food. If hyper-inflation was the only thing we had to worry about, that would be bad. They are after so much more.. the whole game!
The useful idiots are merely keeping the idiots in check that choose to not see what is obvious. Read you history, outside of the size- nothing is new!
When Weimar Germany returned to the gold standard the exchange rate was approx 150,000,000 marks to 1.5 pfenning’s!!
They will establish a new- gold backed- currency, after the establishment of the One World Gov’t and Currency.
Marcobob69
Posted on December 6, 2010 at 9:33amPlease, Congress while you still have power enough, Please….AUDIT THE FED AND THROW THIS BUM IN PRISON, WHERE HE BELONGS. He is doing his damnedest to BANKRUPT THIS COUNTRY, ALONG WITH THE REST OF THE PROGRESSIVES!!!!!!
Report Post »Polwatcher
Posted on December 6, 2010 at 10:14amWe have a lying crook running the Fed.
Report Post »oldoldtimer
Posted on December 6, 2010 at 10:40amBUY IT WITH WHAT? Money that does not exist? So simple ;$1,000,000; you are all now millionaires. How I just wrote it. For every dollar the Fed creates to loan generates $100 in revenue stream. Think about it. Inflation since 1913 2500%. Inflation 1787 to 1913,0% Purchasing power of the dollar was relatively the same 1787 to 1913. 1913 to present it takes $25 to buy the same you could buy for $1 in 1913. Slowly over the years the Fed has inflated the money to control it all world wide. How many foreign banks does the Fed own? No one knows because the fed has never been audited. They controll our money yet we can not see how they do it. What fools we are. Would you allow some one this much control over your personal funds without an audit? Only if you are a stupid fool. AUDIT THE FED.
Report Post »danglnbagsatea
Posted on December 6, 2010 at 10:51amDid anyone notice how freakn nervous this man was? His upper lip was quivering out of control!! That is a nervous man right there!
Report Post »FormerLib
Posted on December 6, 2010 at 11:01amSince Bernanke has a 100% failure rate on every prediction he’s made, and pretty much lies out his ass, I’m going to go ahead and assume the government is printing money like crazy.
Report Post »Adam Coble
Posted on December 6, 2010 at 11:55amTobywill2 you are rite on. We need to get a hold of our government first. then with the backing of them we can go after the fed.
Report Post »People it will not be easy on us. But it is necessary for this nation to be solid again.
tower7femacamp
Posted on December 6, 2010 at 7:42pmtreasury screws up the new $100 bill
Report Post »http://finance.yahoo.com/news/The-Fed-Has-a-110-Billion-cnbc-1062012685.html
that 120 million would fund school lunches for a year.
oldoldtimer
Posted on December 6, 2010 at 9:10pmHe is telling the truth. Not one bill was printed. It was all an electronic transaction created out of thin air by typeing a number on a keyboard. That is how the Fed creates money, just type a number on a keyboard and hit send. No matter it never existed. They will still collect interest on it. How would you like to be able to create money out of thin air and then charge interest on it. Dream of the Gods.
Report Post »TheBMT
Posted on December 6, 2010 at 9:59pm@leftfighter
End the fed! End the fed!
Report Post »TOSKIMAN
Posted on December 6, 2010 at 10:35pmI could run my business like the gov’t, if I had a printing press in my basement.
Report Post »Soon we’ll be wiping our butts with dollars and paying with Charmin at the counter.
sportyk
Posted on December 6, 2010 at 10:56pm“economists in Jekyll Island” Jekyll Island!!!!!!! Now that is rich!!!!!!!! LOL!!!!!!!!!!!! Since he speaks out of both sides of his mouth! That is irony at it’s best!
Report Post »George Washington
Posted on December 8, 2010 at 1:52amNot quite. He said that he would digitize the money. That is worse than printing it. Doing what he plans on doing should collapse the Dollar in no time flat. The all will know what I already know. The U.S. Dollar is already worthless.
Report Post »