Bernanke Plays Dumb

A few words on the the proceedings in the Bernanke confirmation going on today.

Just heard one of the senators say, “you are the definition of a moral hazard…you are creating zombie banks…repeating the mistakes of Japan in the 90′s.”

The senators are all, on both sides of the isle, asking the major question of the moment that Bernanke refuses to answer.  That question being, aren’t you just reflating assets and pushing the pain off down the road, or creating a hyper inflationary environment?

Bernanke refuses to answer this question saying, “I don’t see any misalignment in asset prices.”  Of course he doesn’t, because asset prices aren’t misaligned with the dollar, they are exactly where they should be.  He refuses though to admit that the only way to pull the world off the ledge it was dangling over last year was to reflate everything.  Why doesn’t he just come out and say it, just admit that there was no other option to keep this game going, and they did what they needed to do.

Bernanke saved us people, you may like him or hate him, but there is no way around the fact that he saved this country, and probably the entire world economy, for the time being.  Yes, they could have nationalized the banks and allowed the market to clear, but that would have been far more painful in the short term.  Frankly, I believe that is what they should have done, get the pain over with, start fresh, but being where we are now, it’s hard to say that would have been the right course of action, we may have had large level social unrest.

These senators are complete bafoons not realizing what Bernanke did for us.  Similarly, I want to throw a rock at the television every time one of them rails on him and the treasury for giving the banks money to make profits.  Of course they gave the banks money to make large profits, it was the only way to repair their balance sheets!  what the fuck don’t they understand about this, it’s a very simple equation!

Bernanke will keep playing dumb on the asset reflation scheme, the senators will keep bitching about the banks making money, and we will continue to move towards 1990′s Japan.

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