The following two Youtube Clips are from a few years ago, way before the market cracked.
Peter Schiff predicting a deep recession.
Ben Bernanke Catastrophically Wrong.
How in the world does Bernanke still have his job? Totally not understanding what the issue was. He basically states that housing is strong because labor markets are strong. Well labor market growth was supported by housing! Most of the job growth was from housing! Simply amazing! He also denies housing bubbles by saying mortgage rates are low? Well isn't that a function of Fed Policy?
If you watch the entire Bernanke clip, you will realize what type of institutional carelessness that was running rampant during the housing boom. Bernanke and the Fed itself created the liquidity bubble that fed Wall Streets appetite for securitization. It was all good speculation within a capitalist model, and that model was very profitable. In Bernanke's world, excess lending is good lending. That low mortgage rates are self evidently beneficial to society.
This guy has no clue or concept of equilibrium price levels on interest rates. So bubbles will always surprise him. There is a huge gap in Bernanke's conceptual thinking.
At the end of the day always believe the opposite of what government officials tell you.
Thanks for this. Bernanke is clueless. Thats why its called the dismal science.
ReplyDelete