Bernanke Signals Fed Is Ready to Prop Up Economy

[mike r]

Source: New York Times

The Federal Reserve chairman, Ben S. Bernanke, said Friday that the Fed was determined to prevent the economy from slipping into a cycle of falling prices, even as he emphasized that he believed growth would continue in the second half of the year, “albeit at a relatively modest pace.”

To help sustain the economy, Mr. Bernanke said that the central bank was ready to resume its large purchases of longer-term debts if the economy worsens, a move that would add to the Fed’s already substantial holdings.

“We have come a long way, but there is still some way to travel,” Mr. Bernanke said. “I believe that additional purchases of longer-term securities, should the F.O.M.C. choose to take them, would be effective in further easing financial conditions,” Mr. Bernanke wrote in his prepared remarks for a Fed policy symposium here. He was referring to the Federal Open Market Committee, the panel that sets interest rates, which Mr. Bernanke leads; some members have expressed unease about the Fed’s pursuing any further monetary accommodation.

While Mr. Bernanke emphasized that deflation was “not a significant risk for the United States at this time,” he said “the F.O.M.C. will strongly resist deviations from price stability in the downward direction.” It was his most robust statement to date that the Fed would do its part to avoid a Japanese-style deflation from taking hold.

Read more: http://www.nytimes.com/2010/08/28/business/economy/28fed.html

[marmar]

1. Sounds like Helicopter Ben's bag of tricks is just about empty.

nt

[msongs]

2. no deflation around so cal that I can see nt

[CountAllVotes]

3. none here either in northern Calif.

in fact, I noted that the Motel 6 as posting a price of $69.95 a night - the highest price I've ever seen on it! :wtf:

Other prices are the same, others more, especially food. Gasoline holding at $3.35 a gallon STILL. :grr:

:kick:

[Psephos]

13. Gasoline 2.60/gal here in Michigan last night.

Milk 1.89/gal.

Rent - lol, you don't want to hear that number.

I miss Cali, but I don't miss what it costs to live there.

[MilesColtrane]

4. Growth of 1.6% is not enough to reduce unemployment.

In fact people will continue to lose their jobs unless GDP expands at a rate of at least 2.5%.

If Bernanke is talking about the Fed doing everything it can to sustain present levels, he's talking about a sustaining a continued recession.

[lib2DaBone]

5. China's GDP is running 11%.... let's all move to China...

.. because this is where things are headed.

Our corrupt CONgress could care less about the USA...

[harun]

6. They care about the top 3% of the USA.

[Gecko6400]

7. OK, so where does

the "central bank" get the money to purchase this long term debt? I can think of only one way, print it!

[NCarolinawoman]

14. and/or dip into the Social Security trust fund ........again.

x(

[Hosnon]

8. Apparently something called biflation will make his job much harder.

Some areas of the economy are experiencing inflation - others, deflation.

Good luck figuring out how to balance this...Bernanke might earn his paycheck in the next few years.

[truedelphi]

12. Biflation?

I don't necessarily disagree, but what a weird world this is.

We are now in a period of recovery and "biflation."

Biflation sounds like something that happens to someone who eats both the refried pinto beans and the pork rinds.

[Romulox]

9. Bernanke pledges more bankster bailouts...

:puke:

[TheWatcher]

10. "Come With Me, And You'll Be, In A World Of Pure Imagination....."

Pathetic Propaganda complete with Orwellian Buzzwords Like "Robust"

No one with a functioning Brain Stem believes this crap anymore, at least I hope they don't.

Unfortunately, there are too many American who have self-lobotomized themselves and will clutch onto this like manna from heaven.

Here's the translation for Non-Zombies:

"We are fully prepared to continue to recklessly monetize debt and Toxic Assets, as well as back-stop, bail-out, and fellate the Criminals who assisted us here at the Fed in causing this methodical crumbling and collapse of our economic and financial systems, and we can assure and guarantee that we will continue to fabricate and manipulate data as well as the Stock Markets, and Infinitely Print our way to illusory prosperity, delaying the inevitable and lining the pockets of the Banksters, Wall Street, and Wealthy and Corporate Elite, while the rest of you eat cake.

Congress is also expected to roll over and give us any "Thank God It Passed!!!!!!!11111111111" Legislation as well, in case it is needed to sustain FrankenPonzi.

In short, we're delaying the inevitable again. Because it doesn't matter how many of you die, as long as WE live."

That about sums it up.

[PassingFair]

11. Soothes investors like a lullaby....

WTF?