The Bernanke Doctrine

[Gold Standard]

One of the things that economists talk about over a camp fire is the mystery of deflation.

Ben Bernanke shattered many myths in his passed speeches about how deflation could be combated.

However, my ultimate question is- considering this 'Bernanke Doctrine' has been implemented, has it worked? For those who don't have it (the 6 step doctrine to combat deflation) off of the top of your heads, it is as follows:

1)Maintaining liquidity through printing if necessary.

2) Increasing m1 and m2 through such processes.

3) Buying enormous amounts of foreign currency.

4) Cutting Rates.

5) Establishing ownership stakes in industries through the cyclical process of buying government debt.

6)Depreciating the dollar.

So, I'd like to get ET's perspective on whether or not it has helped (or hurt) stabilizing deflationary patterns in the current crisis.

Chris

 

[harkm]

I am a little confused about number 3. Where did Bernanke say anything about buying foreign currency? He has mentioned that he could buy foreign bonds but didn't want to influence the forex market.

 

[Gold Standard]

Quote from harkm:

I am a little confused about number 3. Where did Bernanke say anything about buying foreign currency? He has mentioned that he could buy foreign bonds but didn't want to influence the forex market.

You're absolutely right. For some reason my brain felt like typing currency...it is debt.

Sorry for the confusion.

 

[lrm21]

its a joke. Bernanke and the rest of these pinheaded pukes refuse to acknowledge the real problem.

There is no wealth.. There are no assets. They keep trying to add more zeros..but 0x0=0

Fiat money is only a promise...If the government can't guarantee the promise what good is it.. the world is slowly awakening to the reality..
55 Trillion debt..we are adding a trillion every 60 to 90 days.. its lunacy.


Rather then let bad companies fail. we have now spread the risk and destroyed healthy companies.. We are punishing the winners..we are penalizing the honest american..

We have zombiefied the entire U.S. financial system..we managed to do to ourselves what every enemy and terrorist has been trying to do for the last 100 years. Obliterate the American financial system along with full faith and credit of America.

Well..kudos all you fucking deadbeats...all of you who want more government..free "name your favorite entitlement"...you are now getting free servings of fuck you on a regular basis..

Sit back and enjoy that smell..its the smell of burning dollars..our currency wil be good for firewood.

 

[jueco2005]

To be an effective FED chairman Mr Bernanke needs to study Bubbleconomics volume 2 when Greenspan finish it.

 

[libertad]

What should the real focus be ?

Rebuilding "true wealth"....

Thus the question is ...."What would quickly rebuild "true wealth" ?

The fast creation of small business....

.........................................................................

Once upon a time 1,000,000 people and 100 companies got to choose between two countries ....

Country A offered....

a) 10% Consumption tax only

b) no individual taxes

c) no corporate taxes

d) no IRS

e) the main rule being the government cannot
creep past the 10% take by issuing debt

Country B offered....

1) progressive taxes

Individuals paid 10 to 38% via the IRS

Corporations paid up to 28% taxes via the IRS

2) Government can create debt....
.................................................................

Which country will be chosen by the 1,000,000
people and 100 companies....?

Which country will have a bigger economy and a bigger tax take ?

...........................................................

The Bernake Doctrine is to stick the losses on others who did not do the losing.....via debt, printing money , etc....

Continually spreading the losses around does not create wealth....

Creating the proper tax structure will most quickly create wealth....

...............................................................

The Bernanke view is flawed....

It does not matter where/when this guy went to school....

 

[Eliot Hosewater]

Quote from harkm:

I am a little confused about number 3. Where did Bernanke say anything about buying foreign currency? He has mentioned that he could buy foreign bonds but didn't want to influence the forex market.

Didn't he set up currency swap worth hundreds of billions of dollars?