Bernanke- The Economy is Weak
“I don’t think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low, if we were to tighten policy, the economy would tank.” Ben Bernanke testifying at the House Financial Services Committee last week.
With those words Ben Bernanke confirmed what we have been saying for months on the Smaulgld blog-the Fed can not exit from its quantitative easing (QE) program because to do so would cause the economy to collapse (we never used the word “tank”).
Last week Ben admitted it. So all this talk of taper, as we have been saying, is just talk. For awhile he had us going, or at least he had the recovery addicts going. Rising interest rates were ok, they said, as they were a sign of an improving/recovering economy. Wrong. Interest rates were rising not because the economy was improving but because the Fed was threatening to stop QE.
Last week Bernanke removed that threat.
Looks like Ben Bernanke is going to follow the Maestro’s easy money policies with an epic encore of accommodative monetary policy.
You can hear the report from Bloomberg here
Gold and silver should respond nicely to this QE4EVA admission.
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