FED: Bernanke Confirms: “If We Were To Tighten Policy, The Economy Would Tank”

[Cap]

Bernanke Confirms: “If We Were To Tighten Policy, The Economy Would Tank”

I don't think the Fed can get interest rates up very much, because the economy is weak, inflation rates are low," Bernanke told the House Financial Services Committee.
"If we were to tighten policy, the economy would tank."

Source:
http://www.couriermail.com.au/busin...horizon-bernanke/story-fnihsevj-1226681221841

As Sonny and Cher would say:
"And the beat goes on"

Trouble is, they are going to beat our currency to death.

 

[Tod]

As of today I moved my retirement savings out of the stock market and bonds in anticipation of a major turndown sometime in the not-too-distant future (this fall?). Time will tell whether I am succumbing to fearmongering or just acknowledging reality.

https://www.google.com/finance?chdn...q=INDEXDJX:.DJI&ntsp=0&ei=VmTpUaDLG8eBrAGQ0gE

 

[Zippyjuan]

Moving out of bonds is certainly a good move. Any increase in interest rates lowers their values.

Any moves by the Fed would be gradual to avoid shocking the market and causing a crash. They won't suddenly stop buying securities but the plan is to eventually start buying fewer of them.

 

[Carson]

Translation is that their economy would tank. Ours would once again be able to come up for a breath of air.

 

[Carson]

As of today I moved my retirement savings out of the stock market and bonds in anticipation of a major turndown sometime in the not-too-distant future (this fall?). Time will tell whether I am succumbing to fearmongering or just acknowledging reality.

https://www.google.com/finance?chdn...q=INDEXDJX:.DJI&ntsp=0&ei=VmTpUaDLG8eBrAGQ0gE

Gold and silver seem oddly low right now.

Then I suppose your well aware.

 

[Jordan]

It certainly would now.

Bernanke is a smart man. He threatened higher rates, so higher rates came. Now he can continue easing without fears that rates are too low. Good move by the Fed, really.

 

[oyarde]

I do not believe they will cut the easing much, I wish they would , what are they going to do , move down to 50 billion ?

 

[Jordan]

I do not believe they will cut the easing much, I wish they would , what are they going to do , move down to 50 billion ?

My guess is any eventual end of QE comes with a cut to U.S. Treasury purchases, no change to MBS purchases.

 

[oyarde]

I am starting to think it is all BS, first they talked about an unemployment number, that number is not going to be seen in the next three years ( my guess ), I have no faith they intend to stop.

 

[oyarde]

Moving out of bonds is certainly a good move. Any increase in interest rates lowers their values.

Any moves by the Fed would be gradual to avoid shocking the market and causing a crash. They won't suddenly stop buying securities but the plan is to eventually start buying fewer of them.

What Zip says about the bonds are true , but , you should not leave everything exposed to the risk of a huge correction on the markets.Having some bonds , not too bad, they are not going to make alot, but they are not going to lose like some things if there is another crash. What he should do is explain , as an example alternatives , like utilities.

 

[Michigan11]

This economy is nothing more than the old Russian Bear economy of the old days. These bastards squeezed us all into an insane aslilume. It's sad but it's true.

 

[hazek]

Moving out of bonds is certainly a good move. Any increase in interest rates lowers their values.

Any moves by the Fed would be gradual to avoid shocking the market and causing a crash. They won't suddenly stop buying securities but the plan is to eventually start buying fewer of them.

Well as long as there is that plan..


No one is disputing they may have this plan, what everyone is saying is that it is a horrible plan which they wont even be able to carry out because there are no other buyers that can pick up if the FED starts cutting back which would mean higher interest rates, which would mean more sellers which would mean the bubble would pop.

They are in a catch 22, and there's no way out. Admit it.