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Has Bernanke Had An Epiphany?

Fed chairman Ben Bernanke told Congress today that he's worried about massive federal budget deficits:

June 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said large U.S. budget deficits threaten financial stability and the government can't continue indefinitely to borrow at the current rate to finance the shortfall.

"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth," Bernanke said in testimony to lawmakers today. "Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance."

Whence this sudden concern about fiscal responsibility (on the day after the president leaves the country)? Might it be that the Fed chairman is a little light headed after last week's $100 billion dollar borrowing and the subsequent spike in rates? Not likely. Bernanke has seen this coming for months. Assuming that he still presumes even a pretense of the independence that politicians like to claim the Fed possesses it may be that the Chairman wants to get on record now about the looming train wreck. How else to explain this sudden epiphany of fiscal responsibility?

It's only a matter of time before some of the responsible parties (read:Democrats or The Fed) start crab walking on the spending insanity and attempted bond market manipulation that consumed Washington from January through May. Today's preliminary unemployment numbers make it hard to argue that economic growth will reach the necessary levels required to reduce the deficit by next year.



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Comments (7)

WOW! Someone on Team Barry... (Below threshold)
GarandFan:

WOW! Someone on Team Barry is WORRIED about the spending. Well Bennie, IT'S A LITTLE FUCKING LATE NOW, ISN'T IT!!!!

Bernanke is a dolt and shou... (Below threshold)
iwogisdead:

Bernanke is a dolt and should have absolutely no credibility after the "banking system will collapse within hours" charade last fall.
The deficit won't be reduced by anything. Hyperinflation, here we come.

Come on, somebody come clea... (Below threshold)
DaveD:

Come on, somebody come clean with me, is the United States on Candid Camera or something? This whole Obama thing is like one big joke on us, right? Really, his whole adminstration is just loaded from top to bottom with idiots.

The Obama administration ha... (Below threshold)

The Obama administration has to start adopting this "Debt=Bad" rhetoric. It's what they're planning on using to ram through the next MASSIVE round of tax hikes.

"We don't want to raise taxes, but we have no choice. We have to start paying off all this debt that George Bush left us."

The silence you'd then hear would be the MSM not reminding him that he was responsible for most of that debt.

Well, supposedly Bernanke i... (Below threshold)
LaMedusa:

Well, supposedly Bernanke is working more closely with the Treasury than any other Fed chair since WWII. The White House would have to at least quietly approve of him making this statement, probably to appease investors worries about over-inflation down the line. Say it now, but maybe forget about it later.

"Yay, Ben! He's on our side!"

I don't get it. Surely he k... (Below threshold)
Hal:

I don't get it. Surely he knew that this would be the result of all that money they've been printing at record speed and all that borrowing from themselves they've been doing. It's not rocket science.

Take a look at the gold graph on the widget http://www.learcapital.com/exactprice and it's obvious for a while now that investors have recognized that FED's practices are leading to a killing of the dollar and into major inflation. Gold is on the rise. People turn to it to protect their money with paper money is in crisis. And crisis is where I'm afraid we are finding ourselves.

Its on purpose.... (Below threshold)
914:

Its on purpose.




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