Volcker:Bernanke is a fool, condemned to repeat history

[MohdSalleh]

By KELLY OLSEN
The Associated Press
Friday, November 5, 2010; 2:58 AM

SEOUL, South Korea -- Former Federal Reserve Chairman Paul Volcker says the U.S. central bank's plan to buy hundreds of billions of dollars in government bonds probably won't do much to boost the economic recovery.

Volcker served as Fed chief from 1979 until 1987 under presidents Jimmy Carter and Ronald Reagan and is currently chairman of President Barack Obama's Economic Recovery Advisory Board. He also warned that the U.S. won't find its way out of the economic doldrums through over-stimulation.

"The thought that you can create a prosperous economy by inflating is an illusion, in my judgment," he told reporters after his speech. "And we should never forget that. I thought we'd learned that lesson and I hope we continue to learn that lesson."

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/05/AR2010110500211.html

 

[Kassz007]

So your thread title should read:

MohdSalleh: Bernanke is a fool, condemned to repeat history

Right?

 

[Larson]

Volcker is a plain-spoken practical economist. US could use a few more of his sort, instead of the clowns in charge currently.

 

[sprstpd]

My vote (if I had one) is for Volcker as the next Fed head.

 

[mahadiga]

Will low interest rates create new jobs in the economy?

 

[denner]

Quote from mahadiga:

Will low interest rates create new jobs in the economy?

No, they haven't yet and all they do is rob savers to save the asses of banks who turn around and goose the spread at the same leverage as before.

A debt ridden, on his ass consumer in an economy that has morphed into a borrow and spend, leverage my house to the hilt no longer generates enough end user demand to warrant further expansion.

Not to mention that the actual cost to hire a full time US worker is prohibitively high compared to other emerging economies.

 

[intradaybill]

Why to you think a man who caused the first major one-day stock crash has any credibility at all?

What is his counter-proposal to what Bernanke is doing?

I keep hearing criticism but no alternative viable proposals. Especially form people here who have no touch with economics.

Proposals people, proposlas, otherwise shut up...

 

[m22au]

Quote from intradaybill:

Why to you think a man who caused the first major one-day stock crash has any credibility at all?

What is his counter-proposal to what Bernanke is doing?

I keep hearing criticism but no alternative viable proposals. Especially form people here who have no touch with economics.

Proposals people, proposlas, otherwise shut up...

I watched a good interview on Bloomberg earlier today. The interviewee was Bill Fleckenstein and he was asked a similar question.

He likened it to asking someone with a hangover what they would do to cure it. The simple answer is "not to get into the situation in the first place".

Fleckenstein has a view similar to me: banking system bailout was unfortunate but important, however QE2 is ridiculous.

 

[pupu]

What's the problem fellas?

Isn't printing trillions of $$ out of thing air =generating thousands of jobs for our fellow Americans.
Look 150k new jobs!

weeeeeeeeeeeeeeeeeeeeeeeeeee

Ben for President in 2012!

Cheese for everyone!

 

[endsongs]

People seem to forget that the unemployment rate increased by around 50% when Volcker did the rate hikes. There are no freebies in economics.