He took office on 1st February 2006.
When he took office the target was 4.5%; he increased them up to 5.25% with the intetion of inverting the yield curve sufficiently in order to create the Crash (see below The Puzzle of the Dyamic of a Crash.) on 29th June 2006. On 17th August 2006 he stopped to increase the rates. It is very difficult or almost impossible to time the Crash so Ben 'Systemic Risk' Bernanke increased the rates till he was sure he had reached his goal. So he has learned that his objective was reached between 29th June 2006 and 17th August 2006.
This is only part of my case against Ben 'Systemic Risk' Bernanke.
The fact that Prof. Paul Robin Krugman, Nobel Prize of economy and Professor Nouriel Roubini alias 'Dr. Doom' support his nomination in January makes me wonder about their motives.
When the Bubble Bursts we will be in a Keynes' Liquidity Trap and in a Deep Depression.
"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency.
By a continuing process of inflation, governments can confiscate,
secretly and unobserved, an important part of the wealth of their
citizens.
...
Lenin was certainly right. There is no subtler, no surer means of
overturning the existing basis of society than to debauch the currency.
The process engages all the hidden forces of economic law on the side of destruction,
and does it in a manner which not one man in a million is able to diagnose."
John Maynard Keynes, 1st Baron Keynes of Tilton
The Economic Consequences of the Peace.
pp. 235-248.
1919
No monetary or fiscal policy will pull the World out of The Deep Depression.
Di Zeit: "Can the right monetary and fiscal policy keep the US out of a recession?"
Alan Greenspan: "Probably not. Global forces can now override most
anything that monetary and fiscal policy can do. Long-term real
interest rates have significantly more impact on the core of economic
activity than the individual actions of nations. Central banks have
increasingly lost their capacity to influence the longer end of the
market.
Two to three decades, ago central banks were dominant throughout the maturity schedule.
Thus, the more important question is the direction of long-term real interest rates."
Chairman Alan Greenspan
The Great Irony of Success.
ZEIT online, 30tn January 2008
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