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Old 12-07-2009, 08:49 PM   #25
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Join Date: Sep 2008
Location: Turtle Island
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Default Re: GOOD NEWS??? Bernanke says recession 'very likely over' LOL

Fedspeak Translation 12/7/2009

Monday, December 7. 2009
Posted by Karl Denninger

Ben Bernanke spewed forth: Chairman Ben S. Bernanke
At the Economic Club of Washington D.C., Washington D.C.
December 7, 2009
It is a pleasure to speak once again before the Economic Club of Washington. Having faced the most serious financial crisis and the worst recession since the Great Depression, our economy has made important progress during the past year. Although the economic stress faced by many families and businesses remains intense, with job openings scarce and credit still hard to come by, the financial system and the economy have moved back from the brink of collapse, economic growth has returned, and the signs of recovery have become more widespread.
We printed up $12 trillion in "freebie" credit, manipulated the MBS market (and in doing so have fomented and created an accounting fraud for all of those entities that hold said paper) and have purchased alleged "assets" at vastly over their actual value on purpose. This has allowed financial institutions to claim to be solvent when in fact they are bankrupt several times over.
Understandably, in a situation as complicated as this one, people have many questions about the current situation and the path forward. Accordingly, taking inspiration from the ubiquitous frequently-asked-questions lists, or FAQs, on Internet websites, in my remarks today I'd like to address four important FAQs about the economy and the Federal Reserve. They are:
1. Where is the economy headed?
2. What has the Federal Reserve been doing to support the economy and the financial system?
3. Will the Federal Reserve's actions lead to higher inflation down the road?
4. How can we avoid a similar crisis in the future?
Where Is the Economy Headed?
First, to understand where the economy might be headed, we should take a look at where it has been recently.1 A year ago, our economy--indeed, all of the world's major economies--were reeling from the effects of a devastating financial crisis.
We created this mess through malfeasance and misfeasance. In combination with other central banks around the world we pumped into the economy tremendous amounts of liquidity that should not have existed. This in turn created tremendous instability and asset bubbles throughout the economy, most particularly in housing.
Policymakers here and abroad had undertaken an extraordinary series of actions aimed at stabilizing the financial system and cushioning the economic impact of the crisis.
We cut off our Pinocchio nose. Repeatedly. The damn thing keeps wedging in the door when I try to go take a leak!
Critically, these policy interventions succeeded in averting a global financial meltdown that could have plunged the world into a second Great Depression. But although a global economic cataclysm was avoided, the crisis nevertheless had widespread and severe economic consequences, including deep recessions in most of the world's major economies. In the United States, the unemployment rate, which was as low as 4.4 percent in March 2007, currently stands at 10 percent.
We created it on purpose and through willful neglect, you ate it. Aren't we special?

Continues Extensively:

Dec. 7, 2009, 2:26 p.m.

Gold falls for second day as Bernanke sees low inflation risks

NEW YORK (MarketWatch) -- Gold futures fell Monday for a second session, pulling back from record highs, as comments from Federal Reserve Chairman Ben Bernanke that inflation will remain "subdued" reduced the metal's appeal as a hedge against rising prices.

"The Fed is committed to keeping inflation low and will be able to do so," Bernanke said to a group of economists in Washington. However, inflation "appears likely to remain subdued for some time."

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