OK the #Bernacke is a Genius.

I don't like it either.

I've been ragging on the Bernacke, about QE2.


I was right about what they were doing,
but missed what was going on.


The Bernacke knew what had to be done,
saw the Republicans were trying to get into
a pissing match with the Democrats,
and would get NO quick resolution on the
deficit problem.


He fixed it.
mea culpa
mea culpa




During this recession/depression the
economy needed low interest rates
to provide liquidity and nutriment, lots
of cash, for economic growth.
Flood the Banks with money,
Fed Window lends to them at just
under 1%, unlimited borrowing.


Congress and President were not
going to get deficit fixed.
That would have kept interest rates
low. Lowered risk/lower yield.

So the Bernacke kept the interest rates
low by buying up US Treasury Bonds,
Debt, Federal Reserve is now bigger
holder of US Bonds than China.


If he bought the bonds they would not
have to raise interest rates higher in order
to other countries buy those T Bonds.


The Bernacke did what he knew the politicians
and elected officials would screw up.
He kept interest rates low during a Recession.
Federal Reserve is going to get hurt,
losses from these purchases,
but I thank you for helping during a
heavy economic decline with one
thing that really made a difference.
Kept Interest rates LOW.


mea Maxia culpa.






Gerald
Series 7 , 13
Anthropologist.