zondag 2 juli 2017

Remembering Ben Bernanke As Fed Chairman

Alan Greenspan was born in 1926, and lived through the Great Depression, so when he became alarmed in 2005, it must have been because he recognized all the signs of impending disaster from his childhood. Ben S. Bernanke was born in 1953 and grew up during the 1950s, when America had already defeated the Great Depression and defeated the Nazis, and no goal was out of reach. He was in college in the 1970s when high inflation was the major problem, so naturally inflation was his greatest concern as Fed Chairman. As I described in my 2005 article, "Ben S. Bernanke: The man without agony", Bernanke was a complete contrast to Greenspan. Bernanke didn't believe in bubbles. He believed that the 1930s Great Depression was CAUSED by the Fed, which could have poured some money into the economy and prevented the Great Depression completely.
Ben Bernanke's story is not yet completely over. In 2008, during the financial crisis, his policy was to "print" as much money as he thought necessary, and pour it into the banking system. He did that, and central banks around the world followed him and did the same. That's why global debt has reached $217 trillion in the first quarter of this year, and that's 327% of gross domestic product for the whole world. The current Fed chairman Janet Yellen says that the Fed has this all figured out. If some segment of the world economy starts crashing, threatening a chain reaction that will cause a catastrophic global financial crisis, Yellen and the other central bankers will just print money and stop the chain reaction. So we have "nothing to worry about"....