{"id":50547,"date":"2020-01-15T08:21:17","date_gmt":"2020-01-15T13:21:17","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50547"},"modified":"2020-01-15T08:21:20","modified_gmt":"2020-01-15T13:21:20","slug":"last-hurrah-for-central-bankers","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50547","title":{"rendered":"\u201cLast Hurrah\u201d for Central Bankers"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/dweaay7e22a7h.cloudfront.net\/wp-content_3\/uploads\/2020\/01\/%E2%80%9CLast-Hurrah%E2%80%9D-for-Central-Bankers-650x360.jpg\" alt=\"\u201cLast Hurrah\u201d for Central Bankers\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/dailyreckoning.com\/last-hurrah-for-central-bankers\/\">\u201cLast Hurrah\u201d for Central Bankers<\/a><\/h3>\n\n\n\n<p>We\u2019ve all seen zombie movies where the good guys shoot the zombies but the zombies just keep coming because\u2026 they\u2019re zombies!<\/p>\n\n\n\n<p>Market observers can\u2019t be blamed for feeling the same way about former Fed Chair Ben Bernanke.<\/p>\n\n\n\n<p>Bernanke was Fed chair from 2006\u20132014 before handing over the gavel to Janet Yellen. After his term, Bernanke did not return to academia (he had been a professor at Princeton) but became affiliated with the center-left Brookings Institution in Washington, D.C.<\/p>\n\n\n\n<p>Bernanke is proof that Washington has a strange pull on people. They come from all over, but most of them never leave. It gets more like Imperial Rome every day.<\/p>\n\n\n\n<p>But just when we thought that Bernanke might be buried in the D.C. swamp, never to be heard from again\u2026 like a zombie, he\u2019s baaack!<\/p>\n\n\n\n<p>Bernanke gave a high-profile address to the American Economic Association at a meeting in San Diego on Jan. 4. In his address, Bernanke said the Fed has plenty of tools to fight a new recession.<\/p>\n\n\n\n<p>He included quantitative easing (QE), negative interest rates and forward guidance among the tools in the toolkit. He estimates that combined, they\u2019re equal to three percentage points of additional rate cuts. But that\u2019s nonsense.<\/p>\n\n\n\n<p>Here\u2019s the actual record\u2026<\/p>\n\n\n\n<p>That QE2 and QE3 did not stimulate the economy at all; this has been the weakest economic expansion in U.S. history. All QE did was create asset bubbles in stocks, bonds and real estate that have yet to deflate (if we\u2019re lucky) or crash (if we\u2019re not).<\/p>\n\n\n\n<p>Meanwhile, negative interest rates do not encourage people to spend as Bernanke expects. Instead, people save more to make up for what the bank is confiscating as \u201cnegative\u201d interest. That hurts growth and pushes the Fed even further away from its inflation target.<\/p>\n\n\n\n<p>What about \u201cforward guidance?\u201d<\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u201cLast Hurrah\u201d for Central Bankers We\u2019ve all seen zombie movies where the good guys shoot the zombies but the zombies just keep coming because\u2026 they\u2019re zombies! Market observers can\u2019t be blamed for feeling the same way about former Fed Chair Ben Bernanke. Bernanke was Fed chair from 2006\u20132014 before handing over the gavel to Janet [&hellip;]<\/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":[68,124,11023,431,661,1264],"class_list":["post-50547","post","type-post","status-publish","format-standard","hentry","category-economics","tag-ben-bernanke","tag-central-banks","tag-daily-reckoning","tag-interest-rates","tag-qe","tag-recession"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50547","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=50547"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50547\/revisions"}],"predecessor-version":[{"id":50548,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50547\/revisions\/50548"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}