{"id":21032,"date":"2016-06-07T19:34:20","date_gmt":"2016-06-08T00:34:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=21032"},"modified":"2016-06-07T19:34:20","modified_gmt":"2016-06-08T00:34:20","slug":"bernanke-blew-it-big-time-he-should-have-raised-rates-three-years-ago","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=21032","title":{"rendered":"Bernanke Blew It Big-Time: He Should Have Raised Rates Three Years Ago"},"content":{"rendered":"

Bernanke Blew It Big-Time: He Should Have Raised Rates Three Years Ago<\/a><\/h3>\n

Bernanke blew it big-time, letting the “recovery” run seven years without any significant increase in rates.<\/i><\/p>\n

It is now painfully obvious that Ben Bernanke blew it big-time by not raising rates three years ago when the economy and markets enjoyed tailwinds.<\/b>\u00a0The former Federal Reserve chairperson, who has claimed the mantle of\u00a0savior of the global economy<\/i>, foolishly kept rates at zero until tailwinds turned to headwinds, at which point he handed Janet Yellen the unenviable task of raising rates as the headwinds are strengthening.<\/p>\n

Ben Bernanke is not the\u00a0savior<\/i>\u00a0who rescued the global economy; he is the clueless fool who plunged a poisoned knife in its back.<\/b>\u00a0After weathering the spot of bother in Euroland in 2011-2012, the global economy had multiple tailwinds in 2013–tailwinds that enabled Bernanke and the Fed to raise rates in a series of measured steps.<\/p>\n

Tailwind #1: the Fed’s binge-buying of assets (QE3) was still ramping up in 2013:<\/p>\n

<\/p>\n

Tailwind #2: the yield curve spread had bounced off its 2012 low:<\/p>\n

<\/p>\n

Tailwind #3: market speculative positions and sentiment were solidly positive:<\/p>\n

<\/p>\n

Tailwind #4: China’s economy and appreciation of the yuan had not yet weakened:<\/p>\n

<\/p>\n

In April 2013, the market’s “recovery” had already been running for four years.<\/b>\u00a0By mid-2013, the S&P 500 had soared from 667 in March 2009 to 1,600, exceeding its previous all-time highs around 1,574–a gain of 930 points or 140% off the 2009 lows.<\/p>\n

What else did The Bernank want in mid-2013–an infinite line of credit with the Central Bank of Mars?<\/b>\u00a0He had literally every tailwind a central banker could want to support higher interest rates–especially rates that could have clicked higher by tiny .25% increments.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Bernanke Blew It Big-Time: He Should Have Raised Rates Three Years Ago Bernanke blew it big-time, letting the “recovery” run seven years without any significant increase in rates. It is now painfully obvious that Ben Bernanke blew it big-time by not raising rates three years ago when the economy and markets enjoyed tailwinds.\u00a0The former Federal […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[68,303,366,431,670,3650],"class_list":["post-21032","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ben-bernanke","tag-fed","tag-global-economy","tag-interest-rates","tag-recovery","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21032"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21032\/revisions"}],"predecessor-version":[{"id":21033,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/21032\/revisions\/21033"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}