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31 July, 2009

Bernanke: This may be worse than Great Depression

For one of the first times in the organization's nearly century-long existence, the sitting Fed chairman Ben Bernanke sat this past weekend to answer questions on the record from the citizens of the United States.

Highlights:
"'A lot of things happened, a lot came together, [and] created probably the worst financial crisis, certainly since the Great Depression and possibly even including the Great Depression,' Bernanke said at the start of a town-hall meeting in Kansas City.

Asked when 'this [recession] is going to end,' Bernanke said growth would return in the second half of 2009, likely at a 1% pace. The unemployment rate won't peak until next year, he said.

The Fed has put the 'pedal to the metal' to try to get the economy growing at a faster pace.

Maybe because his earlier answers were on the scary side, Bernanke then tried to be a cheerleader, saying that the U.S. economy 'couldn't be held down' and would eventually return to a strong growth pace."


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1 comment:

  1. In my Tract The Age of Turbulence: Plea for a New World Economic Order, I explain the nature and causes of economic depressions.

    A new, bigger Crash will come causing a real depression.

    Preparing for the Crash, The Age of Turbulence. Proposes a way to profit from The Crash.

    Using the yield curve as a predictor that strategy covers Treasuries, Corporate Bonds, Minerals (Oil, Precious Metals and Base Metals.) and Stocks.

    Its aim is to profit from both the Asset Price Bubble and Irrational Exuberance and The Crash and Economic Depression that will ensue.

    A turbulence in fluid dynamic is a chaotic state of a liquid or a gas. It Owns Most of the Proprieties of The Liquidity Trap, Origin of The Crash.


    It tries to accomplish Alan Greenspan Mission Impossible:


    "That is mission impossible. Indeed, the international financial community has made numerous efforts in recent years to establish such oversight, but none prevented or ameliorated the crisis that began last summer.

    Much as we might wish otherwise, policy makers cannot reliably anticipate financial or economic shocks or the consequences of economic imbalances.

    Financial crises are characterised by discontinuous breaks in market pricing the timing of which by definition must be unanticipated - if people see them coming, then the markets arbitrage them away."

    ....

    The clear evidence of underpricing of risk did not prod private sector risk management to tighten the reins.

    In retrospect, it appears that the most market-savvy managers, although conscious that they were taking extraordinary risks, succumbed to the concern that unless they continued to "get up and dance", as ex-Citigroup CEO Chuck Prince memorably put it, they would irretrievably lose market share.

    Instead, they gambled that they could keep adding to their risky positions and still sell them out before the deluge. Most were wrong."


    Alan Greenspan
    The Age of Turbulence: Adventures in a New World [Economic Order?].


    I propose a plausible alternative solution to the depression: I designed a System to get out of Credit Based Free Market Economy and transfer to Credit Free, Free Market Economy:

    ¥€$ Enter Your €5 in The Cra$h R€gi$t€r.


    I.10.82
    "People of the same trade seldom meet together, even for merriment and diversion,
    but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

    It is impossible indeed to prevent such meetings, by any law which either could be executed,
    or would be consistent with liberty and justice.

    But though the law cannot hinder people of the same trade from sometimes assembling together,
    it ought to do nothing to facilitate such assemblies; much less to render them necessary.


    I.10.83
    A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies. It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.

    I.10.84
    A regulation which enables those of the same trade to tax themselves in order to provide for their poor,
    their sick, their widows and orphans, by giving them a common interest to manage,
    renders such assemblies necessary."


    Adam Smith
    June 5th, 1723 – July 17tn, 1790
    An Inquiry Into the Nature and Causes of the Wealth of Nations.
    Inequalities Occasioned by the Policy of Europe.
    March 9th, 1776


    Buy Now The Tract That Will Be Published September 17th, 2009.

    ReplyDelete

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