Bernanke plays with economy

10 ways Ben Bernanke is endangering the US economy – Lincoln Ellis, Strategic Financial Group

1. Banks are still insolvent – he tells you they are not.
2. Continued suspension of FASB & other accounting gimmicks have allowed large financial institutions to sit around with loan portfolios that we believe would render 3 or 4 of the big 5 banks insolvent – that’s great for transparency for shareholder, eh?
3. Bernanke is concerned that without the steep yield curve the financial system runs the risk of shutting down.
4. He will keep monetary policy as loose as possible to keep the yield curve & recapitalize the banks.
5. The chairman doesn’t actually care if the banks lend or not, in fact, better if they don’t then he can claim that they need lower rates.
6. The only way banks lend is in yield curve flattens taking away their spread.
7. Passing off the USD weakness question to Tiny Tim was disingenuous and or further evidence of a lack of understanding of how yield differentials effect capital flows.
8. A weak dollar policy – as the one being currently pursued by the Fed is a dangerous game of global chicken and the EMs along with China might take us up on dumping $s.. Then what… we compete with China to manufacture items and create more $5 an hour jobs?
9. The Chairman was complicit in two early bubbles and bursts.
10. The hubris of his ability to control inflation was crushed when he passed it off on real demand coming from EMs, which simply suggests a normalized recovering economy which would mean he should normalize policy…