Wednesday, August 08, 2012

BEN BERNANKE: REAPPOINTMENT

The decision to reappoint Ben Bernanke as the Chairman, Federal Reserve, will further escalate sloppiness, says Gyanendra Kumar Kashyap

The world could well witness renewed programs of Fed purchases of Treasury Bonds and mortgage backed debt – implying that the Fed will continue to print money (and drop the same from helicopters) to fund the ever widening federal deficit. As a matter of fact, commercial banks are already buying treasuries with purchases aggregating $114.6 billion ytd (year to date). Debbie Johnson, Chief Economist, Yardeni Research Inc, remarks to B&E, “Banks are earning a great spread between their cost of funds and the return on securities. Of course, they are betting the Fed will keep the federal funds rate close to zero for a long time. Now that Bernanke has been reappointed as Fed Chairman by President Obama, it is probably a good bet.”

Nevertheless, Barack is not alone in his support for Ben. Apart from a few Senators, respected experts like Nouriel Roubini, Economics Professor at the Stern School of Business, while endorsing Bernanke’s re-appointment to B&E, believes that his positive is “the experience gained through the handling of these unprecedented circumstances!” The cheers on the Wall Street (the DJIA surged by 80 points) are indicative of Ben’s iconic following amongst high street subsidy mongers. Well, we did hear this one flying over the cuckoo’s nest how, despite personally wanting Summers, Obama was forced to reappoint Ben one year in advance due to Bernanke’s closeness to the Clinton club and the white brigade... Racist rumours, did we hear you say? Tell that to Barack, you Uncle Toms...


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