Thursday, November 4, 2010

Why Ben Bernanke Break Law?

Federal Reserve chairman, Ben Bernanke, may have broken the law by talking about what the Fed did and why to write about their actions in a Washington Post (NYSE: WPO) opinion piece, published today.
In the article, Bernanke will discuss why the politicians could not stand idly by while the economy moved at a pace anemic. He spoke of the previous round of quantitative easing that had already made, to the tune of $ 1.7 billion, and the way they stopped the economic free fall and began the road to growth.
What is especially worrying is Bernanke is watching stock prices instead of the real economy. Read these lines:
"Stock prices rose and interest rates fell in the long term as investors began to anticipate the latest action. Easier financial conditions for economic growth. For example, lower mortgage rates make housing more affordable and allow that more homeowners to refinance. Lower corporate bond rates will encourage investment. And most stock prices increase consumer wealth and help build confidence, which can also stimulate spending. "
It's a little upset that Bernanke is watching stock prices compared to the manufacturing data, data services, and other economic data, not what the Dow and the S & P did yesterday.

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