“Ben Bernanke? Oh yeah, that bearded Jewish Guy. What’s He Do?” or The Stage That Is Economic Policy
[heading]”Ben Bernanke? Oh yeah, that bearded Jewish Guy. What’s He Do?” or The Stage That Is Economic Policy[/heading]
Ben Bernanke spoke today. If you don’t know who Ben Bernanke is, he is the Fed Chairman. What’s that? That’s what Alan Greenspan was before him. Yeah, we’ll get a new one soon.
When Benny & his jets (colloquial reference to his money-printing habits) speaks, the market listens.
What does it mean when the market listens?
It means that everyone gathers around television cameras and pundit typewriters and yells or types really loud and eventually certain screams and typing become louder (EVEN ALL CAPS). And then the robots take over.
It was also the 13th upday of 15 for the S&P 500.
Aside from the yelling and hammering at keyboards which ultimately led to a wild day in the markets, a Bloomberg column called for Obama to elect a banker to the Federal Reserve board, for we need a ‘”post-crisis” candidate who can reassert the Fed’s independence and move away from the unusual policies of the last six years.”
Roger Lowenstein, who is writing a book on the origins of the Federal Reserve system, recommends that a banker runs the Federal Reserve. “…A traditional banker who would remind the nation that issuing loans can be a noble calling.”
In sober terms, puts it:
“The punch brewed by Bernanke consists of trillions of dollars in banking reserves that private banks now hold as credits. As these reserves are converted into loans, the economy will heat up and the Fed’s new chief will need to dampen the merrymaking.
Rather than look for a consultant, an academic or a regulator, Obama should nominate a chairman with an institutional grasp of the banking system. The next Fed chief should be a banker.”
It seems the Fed policy is similar to how a psychiatrist treats a depressant: numb the feelings on both side of the fence. A new school is born: American Academic Economic Realism.
The only thing stable today was…Bitcoin.
Bitcoin has found support at $125, and today merely seemed to be joined by gold and silver. Just weeks ago Bitcoin jumped in price, continuing the support it gained after the diversification during the spring price run-up. You see, from left to right, both gold and silver gained in terms of BTC. At approximately 11:20am PST, as Bernanke’s speech ended, the price went from .17 BTC per silver ounce to approx. 1.18 per BTC per silver ounce.
Gold, at the same time, ran from 10.3 BTC per gold ounce to shy of 10.8 BTC per gold ounce.