Stay calm, Bernanke urges markets
Ben Bernanke urged investors yesterday to relax in the wake of a global stock market meltdown that erased more than $1-trillion of gains, insisting that the US economy remains sound. The US Federal Reserve Board chief insisted that nothing material has changed in the two weeks since he issued a clean bill of health for the US economy. Like many economists, the US Federal Reserve Board chief is convinced the economy is on track for a soft landing - marked by tame inflation, low unemployment and slower growth. But in the aftermath of Tuesday's global stock market meltdown, investors are casting a more skeptical eye on some of the nagging problems that until now seemed little more than a nuisance to the overall economy. There's the housing slump, mounting defaults in the subprime mortgage market, sluggish business spending, the travails of the Detroit Three auto makers and a possible slowdown in China. Testifying before a congressional committee yesterday, Bernanke said the Fed is closely monitoring financial markets. But he concluded there wasn't any obvious trigger for the selloff. “Taking all the new data into account, there is really no material change in our expectations for the US economy since I last reported to Congress a couple weeks ago,” Bernanke assured members of the House of Representatives' budget committee. Bernanke also told lawmakers that there's no evidence that problems in the market for subprime mortgages - higher-rate mortgages aimed at high-risk borrowers - are spreading to other areas of the lending industry. And unlike his predecessor, Alan Greenspan, who warned Monday that the US might be headed for recession later this year, Bernanke is optimistic about the rest of the year. “There is a reasonable possibility that we'll see some strengthening of the economy some time during the middle of the year,” he told the committee.
(Globe and Mail 070301)
Of course Bernanke isn't going to tell the truth. The power elites that have his balls in a vice aren't going to let the status quo go down anyday soon, as much as they have control over things. The Federal Reserve is so removed from reality anyways, since it is concerned with the fiat currency financial system, which is adept at creating wealth out of thin air. I believe the housing downturn and the subprime mortgage fiasco still have a long way to go down before things stabilize yet.