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Ben Bernanke is a dubious choice to be
named "Person of the Year" by Time magazine. While Time's
Managing Editor Richard Stengel credits him with recognizing early and
reacting appropriately to the ongoing financial crisis, in reality, he was
wrong time and again with both his predictions and his remedies. Just
remember these gems:
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On July 1, 2005, Bernanke stated without
hesitation that we were not experiencing a housing bubble: "I think what
is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit."
-
November 2005, on derivatives:
"With respect to their safety, derivatives, for the most part, are
traded among very sophisticated financial institutions and individuals who
have considerable incentive to understand them and to use them
properly." And "the Federal Reserve's responsibility is to make
sure that the institutions it regulates have good systems and good procedures
for ensuring that their derivatives portfolios are well managed and do not
create excessive risk in their institutions."
-
February 15, 2006: "Housing markets
are cooling a bit. Our expectation is that the decline in activity or the
slowing in activity will be moderate, that house prices will probably
continue to rise."
-
February 2008: "I expect there will
be some failures of smaller banks" (Bear Stearns collapsed a couple of
weeks later).
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But then again, I guess in regards to
his nomination we are talking about achievements in 2009. That was the year
Bernanke said, "Currently, we don't think [the unemployment rate] will
get to 10 percent."
This is the same chairman of the Federal
Reserve who told us that Fannie and Freddie were "adequately
capitalized" and "in no danger of failing."
Unfortunately, he has not just been
wrong about housing, unemployment, banking, and derivatives -- his policies
have directly contributed to all of the problems we now face.
High unemployment and the weak dollar
threaten to further undermine our economy, yet his policy is to just keep
borrowing. The massive debt his policies have foisted on the American
taxpayer is weakening the U.S.'s position as global economic leader and
hurting already tenuous relations with foreign governments. Bernanke has
supported the policies of Greenspan and our current and previous
administrations - the very policies that got us into this mess. He has
supported the leveraging of the American economy to rescue companies long
past saving and the borrowing of billions from foreign governments to line
the pockets of corrupt investment bankers.
I could recommend a few alternative
names for runner-up, if Time's criteria are really as dubious as they
appear:
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Lloyd Blankfein
from Goldman Sachs for robbing taxpayers legally
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Rick Wagoner of GM for taking the
world's largest car maker to bankruptcy in a quarter-century
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Tim Geithner
for ensuring that all of our bankers prospered during the worst financial
crisis since the '30s
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Tiger Woods for providing the nation
with great dinner conversations and helping to spur tabloid sales.
Bernanke is insistent on using inflation
to make our personal debts seem small, all the while setting the country up
for a much larger disaster long term. Bernanke is borrowing from Peter to pay
Paul... and robbing taxpayers to pay Peter.
As you may have noticed, the government will
not save you from the reverberations of a declining U.S. economy.
You’ll have to take matters into your own hands… and no one is
better at pointing the way than the editors of The Casey Report. No matter
how dire the economic trend, double- or triple-digit gains within 12 to 24
months are easy if you discover the right opportunities to profit. Find out more by clicking here.
Olivier Garret
Caseyresearch.com
Read
all the other articles written by Olivier Garret
Olivier Garret is CEO of
Casey Research, LLC., one of the nation’s oldest and most respected
organizations dedicated to providing independent investors with unbiased
research on opportunities to earn extraordinary profits by being just ahead
of the crowd.
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