Is Bernanke a liar?

Federal Reserve Bank Chairman Ben Bernanke has made some very famous calls only to change his opinion and stance afterwards. In 2005 Ben Bernanke said “home-price increases, largely reflect strong economic fundamentals.” This was shortly before the top and collapse in the US housing market that ensued. In 20007 Ben Bernanke also stated “…we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.” After the 2008 crisis initially caused by the subprime crisis he later said that no one could have forseen the impact of the subprime spillover. Imagine that, the head of the US Central Bank not knowing the actual exposure, risks and over-valuations of  lending products in the US banking system.

Bernanke also released a Fed report stating that high price of oil was the cause for the 2008 slowdown shortly after the crash. With the recent increase in the prices of oil, Bernanke changed his stance to recently say that the increasing price of oil has no impact on the economy. In 2006, Bernanke also stated “I have confidence, therefore, that however events play out in the short term, in the longer term the economy will grow at a healthy pace, raising living standards in the process. ” Again, a prediction wrong as the US living standards have dropped substantially with record poverty levels.

Bernanke has stated many times that the Fed’s dual purpose is to maintain price stability and keep unemployment low. But recently price inflation has been increasing (along with underlying commodities) while average wages have decreased (back to the living standards thing again) and actual unemployment has not improved. When a person of that power and level in government is paid to make such inaccurate predictions and moves, how is that possible? If we made such mistakes in our daily jobs we would probably not be around for very long.

With such missed calls, is Bernanke the PH.D really as bright as people perceive him to be or has he been placed at such a high position because the less bright someone is, the easier it is to control decisions from the outside (the powers that be of Wall Street)?  Who has benefited from his decisions while in power? What are his interests after he finishes his role as Federal Reserve Chairman? Will he follow his predecessor (Alan Greenspan) and hit the road to a role on Wall Street lined with the favours he’s handed out in his current decision making role? Does Bernanke constantly contradict himself or simply does he not want to tell the truth?


0 Responses to “Is Bernanke a liar?”

  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: