Sunday, October 23, 2011

Ben Bernanke Oct 19, 2011 Speech - BIS - Important

Ben Bernanke – Confirming that Central Bankers Should All Be In Jail

Bank of International Settlements October 19, 2011 Central Bank Speech by Ben S Bernanke: “The effects of the Great Recession on central bank doctrine and practice.”

Below is an excerpt from a nine page speech which should knock off your socks. Bernanke concludes that financial stability was not the primary role of the central bank. Canada is now looking to expand the role of our Central Bank. For the reader’s benefit, Canada’s Central Bank is owned by Canadians. Our Finance Minister beneficially owns one share on behalf of all Canadians. In other words, Canada’s monetary policy is not governed by “private” central bankers. With Harper in charge this change could take place at any time.

The Harper government wants to expand the role of Canada’s Central Bank. That role, beyond monetary policy, would also include employment policy. When you assess the U.S. unemployment statistics and the state of the U.S. economy you would conclude that the Federal Reserve has failed miserably - 18% unemployment and another 15% of the population on Food Stamps. When you factor retired seniors, children, students, and inmates; only one in three Americans actually works - 200,000,000 people in the U.S. do not work!

To top it all off, Bernanke states that the Federal Reserve does not have a numerical inflation target. Dear readers, inflation statistics are being deflated to mask the real economic indicators. In most cases, food and oil price increases have been omitted when reporting true inflation statistics.

What does Bernanke refer to when he speaks of “asset prices”? Would that be gold or silver? That is my belief, and that is why Gold and Silver will eventually skyrocket in price.

When you read the entire speech you will ultimately determine that Central Bankers are full of themselves and full of shit. The full text of the speech can be viewed at:

The Federal Reserve is accountable to the Congress for two objectives – maximum employment and price stability, on an equal footing – and it does not have a formal, numerical inflation target.

…in the decades prior to the crisis, monetary policy had come to be viewed as the principal function of central banks; their role in preserving financial stability was not ignored, but it was downplayed to some extent. The financial crisis has changed all that. Policies to enhance financial stability and monetary policy are now seen as co-equal responsibilities of central banks.

In practice, the distinction between macroeconomic and financial stability objectives will always be blurred to some extent, given the powerful interactions between financial and economic conditions. For example, monetary policy actions that improve the economic outlook also tend to improve the conditions of financial firms; likewise, actions to support the normal functioning of financial institutions and markets can help achieve the central bank’s monetary policy objectives by improving credit flows and enhancing monetary policy transmission. Still, the debate about whether it is possible to dedicate specific policy tools to the macroeconomic and financial stability objectives is a useful one that raises some important practical questions. A leading example is the question of whether monetary policy should “lean against” movements in asset prices or credit aggregates in an effort to promote financial stability. In my view, the issue is not whether central bankers should ignore possible financial imbalances – they should not – but, rather, what “the right tool for the job” is to respond to such imbalances.”

Thank you,
Joseph Pede

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