In case you missed it, Ben Bernanke appeared on TV to answer questions from the Senate Banking Committee. Specifically, he defended the on-going asset purchases of $85 Billion/month the Federal Reserve is making in order to “support our recovery.” He reassured the general public that the benefits outweigh the potential risks.
This Bloomberg article does a great job of presenting each risk – including those highlighted on Funancials such as creating inflation and forming asset-bubbles.
If you’re a regular reader, you’re used to my gloomy outlook – so it should make you all giddy to see the man in charge of our economy say positive things. He says that “inflation is subdued” and there is little risk of asset-bubbles. In short, it looks like we’re well on our way to a full recovery.
Take It With A Grain Of Salt
On October 27, 2005, Mr. Bernanke told a congressional panel that there is no housing bubble. “The increase in home prices largely reflect strong economic fundamentals,” he said.
Yep- we should listen to that guy.